IFA Value

bostonerimus

Why do you want an investment bond? Do you need the insurance aspect? In my experience it's often better not to combine products as it leads to complications and extra costs. If you are looking to invest in a tax advantaged way, are you using pensions, SIPPs, ISAs etc and even general accounts managed to minimise tax. Are you looking for a hands off investment because you don't want to manage your money yourself?

fred246

We must have uncovered a dodgy IFA. Now that really must be uncommon.

83dons

Thanks for the responses. I can provide further details by PM if required as not going into all the details on here.

JoeCrystal

83dons wrote: »

Thanks for the responses. I can provide further details by PM if required as not going into all the details on here.

Then you would not be able to take full advantage of this forum's help and supports. Did you get any proper reports done? I remember when I used an IFA for both occasions for setting up the pension scheme / transferring a pension, I had quite an in-depth report sent to me explaining the reasoning behind the choice.

dunstonh

Why do you want an investment bond? Do you need the insurance aspect? In my experience it's often better not to combine products as it leads to complications and extra costs.

In the UK, investment bonds are a tax wrapper. There are no extra costs. You can hold UT/OEICs in them in the same way as SIPP/ISA. Used to be a popular tax wrapper but the ISA going up to £20k and the dividend allowance/CGT allowance nil rate bands virtually killed investment bonds off. Nowadays,you only really see them for higher/highest rate taxpayers with very large amounts or where trusts are required.

I can provide further details by PM if required as not going into all the details on here.

You dont have to go into detail but simple answers should suffice. Why not ISA? Why not unwrapped holdings? Why not pension tax wrapper?

bostonerimus

dunstonh wrote: »

In the UK, investment bonds are a tax wrapper. There are no extra costs. You can hold UT/OEICs in them in the same way as SIPP/ISA. Used to be a popular tax wrapper but the ISA going up to £20k and the dividend allowance/CGT allowance nil rate bands virtually killed investment bonds off. Nowadays,you only really see them for higher/highest rate taxpayers with very large amounts or where trusts are required.

It's the same in the US. They are sold as tax wrappers when other tax advantaged schemes are probably more appropriate. The insurance aspect is often used as sales pitch - an added extra feature that you don't get with otehr investments. They only become useful for the very rich an/or in some estate planning schemes, but financial advisers/insurance companies still try to sell them to unsuspecting people.

dunstonh

The insurance aspect is often used as sales pitch - an added extra feature that you don't get with otehr investments.

You wouldnt barely mention it in the UK as its typically 0.1% of fund value. Just enough to qualify it under the life assurance rules.

enthusiasticsaver

Why do a lot of IFAs seem to recommend Prudential products?

dunstonh

enthusiasticsaver wrote: »

Why do a lot of IFAs seem to recommend Prudential products?

I wouldnt say a lot if you go by the overall level of what IFAs place vs what goes to Prufund. We just seem to get a lot of comments here. Maybe google brings the threads up and people post for that reason.

However, those that do it do so because its easy. If you have a low knowledge consumer who really is showing no interest in the investments, then the Prufund is an easy option. At the end of the day, those sorts of people are not going to be unhappy with it. However, there are some advisers out there where Prufund is the answer to everything and everyone and it really shouldnt be that way.

bostonerimus

If the OP is right and the ongoing Pru fee is in the range of 1.5% and presumably there's at least a 0.5% IFA annual fee too so that's a total of around 2%, which is a big hole to dig yourself out of.