Shepherds Friendly MVR Warning

leodis23

Just a heads up for anyone with money invested in Shepherds Friendly - they're currently charging a 20% fee on any ISA withdrawals or transfers.

There's a page on their site that covers off what they're doing, however the page itself it marked as noindex for Google (ensuring you don't find it unless you try and withdraw), and they've not communicated out about the MVR on any of their social media profiles, and that page isn't accessible from any internal links on their COVID-19 pages (that I can see anyway).

Here's the masked URL (I can't add links yet) - shepherdsfriendly.co.uk/uncategorized/investment-update-covid-19

Alexland

Opaque arbitrary MVRs is why we have always avoided friendly society products. I would rather just see a reduction that's more directly as a result of the asset allocation performance. 20% is a bit steep for what are presumably mixed asset investments as some pure stock market tracker funds have dropped by the same. Maybe they are trying to discourage outflows. Either way it seems you get all the downsides of a 100% equities investment with upsides comparable to a tame mixed asset fund.

drphila

leodis23 said:

Just a heads up for anyone with money invested in Shepherds Friendly - they're currently charging a 20% fee on any ISA withdrawals or transfers.

There's a page on their site that covers off what they're doing, however the page itself it marked as noindex for Google (ensuring you don't find it unless you try and withdraw), and they've not communicated out about the MVR on any of their social media profiles, and that page isn't accessible from any internal links on their COVID-19 pages (that I can see anyway).

Here's the masked URL (I can't add links yet) - shepherdsfriendly.co.uk/uncategorized/investment-update-covid-19

Thanks for that. Fortunately the no-indexing didn't work and it does show in Google searches! (Btw, how do you identify that a page has been no-indexed?)

I bought into their Bonus Plan purely for their cashback (£215 via topcashback for 6 monthly x £100 payments - the min. is 3 x £100 but I hadn't had the cashback then and didn't want it declined.).

Fortunately I can just wait for the market to pick up and the MVR be lifted. Be interesting to see whether they'll pay the bonus this year. (I think they did in the 2008 crash)

DesG

https://shepherdsfriendly.co.uk/uncategorized/investment-update-covid-19

Jay_MacBee

Putting the MVR of 20% aside for a moment, which btw is still in place at end of August 2020...,there is still a generous Quidco cashback offer of +£220 for 12x monthly £100 payments (TCB is currently £185). Recently the Shepherds Friendly ISA annual performance bonus has been 3%, after paying fees, but this has been a funny old year so my simple sums assume:

• no ISA performance bonus, does not even cover fees
• I withdraw/transfer after 12 months with the 20% MVR still in place
• I have to pay 3% ISA setup fees and 1.5% AMC (not sure if the AMC applies if I Ieave after 12 months): 

Cashback: + £220
1st Year Fees - £56 (3% ISA setup & 1.5% ongoing AMC on £1200 invested)
MVR: - £120 (20% on £1200 invested)
Performance Bonus net: £0 ?

That is still + £44 (net) or 3.67% return. Still better than a Cash ISA?

Jay_MacBee

Don't try and do maths in your head.. Erm 20% of £1200 is £240, doh! giving - £76 (net) or -6.33% .... not better than a Cash ISA!

leodis23

The "bonus" on my £1,000 balance for the previous calendar year was just over £4... and that was pre-corona, so dread to think how insultingly low their bonuses will be this year.

As much as I could do with the money right now (buying a house), I'm just leaving it until they remove the MVR. I spoke to their customer service and they say they'll alert people who've asked to be alerted when it's removed, but doubt it'll be this side of April 2021.

Shankers

Jay_MacBee said:

Putting the MVR of 20% aside for a moment, which btw is still in place at end of August 2020...,there is still a generous Quidco cashback offer of +£220 for 12x monthly £100 payments (TCB is currently £185). Recently the Shepherds Friendly ISA annual performance bonus has been 3%, after paying fees, but this has been a funny old year so my simple sums assume:

• no ISA performance bonus, does not even cover fees
• I withdraw/transfer after 12 months with the 20% MVR still in place
• I have to pay 3% ISA setup fees and 1.5% AMC (not sure if the AMC applies if I Ieave after 12 months): 

Cashback: + £220
1st Year Fees - £56 (3% ISA setup & 1.5% ongoing AMC on £1200 invested)
MVR: - £120 (20% on £1200 invested)
Performance Bonus net: £0 ?

That is still + £44 (net) or 3.67% return. Still better than a Cash ISA?

Topcashback has been mentioning a £50 exit fee for Scottish Friendly if you exit within 5 years. It'd be worth checking the Ts&Cs to see if there was anything like this with Shepherd's Friendly when you signed up. 

Shankers

leodis23 said:

The "bonus" on my £1,000 balance for the previous calendar year was just over £4... and that was pre-corona, so dread to think how insultingly low their bonuses will be this year.

As much as I could do with the money right now (buying a house), I'm just leaving it until they remove the MVR. I spoke to their customer service and they say they'll alert people who've asked to be alerted when it's removed, but doubt it'll be this side of April 2021.

You've identified the problems with 'friendlies,' all except their high fees.

conbee

Good ole Shepherds unfriendly, been saving with them for 5yrs. Saving for a property, in May 2020 I was at the exchange of contract stage. Put a withdrawal request in with Shepherds, was told sorry there's not enough funds in your account. It was at that point I noticed they reduced my saving by nearly 10k because of this MVR. Of course I was mortified, but thankful I never signed the exchange of contracts on the property. The embarrassment of pulling out the sale, loss of monies to conveyancers and now my life savings vanishing into the ether has left a very bitter taste. Add to that a redundancy and you kind of get the picture. Thanks Shepherds you have destroyed my hopes and dreams.

dunstonh

Good ole Shepherds unfriendly, been saving with them for 5yrs. Saving for a property, in May 2020

I'm afraid this is totally your own fault then.  Nothing do to with Shepherds Friendly.

Using a plan that has a minimum 10 year recommended term to put money aside for 5 years was not a sensible thing to do.   Indeed, many consider 15 years to be the ideal minimum for regular contribution plans.

 I was at the exchange of contract stage. Put a withdrawal request in with Shepherds, was told sorry there's not enough funds in your account. 

You should not have left it that long.  If you know you need money a sizeable amount out in the next 3 years, you should be moving it to cash.   3 years. Not a couple of weeks.

The embarrassment of pulling out the sale, loss of monies to conveyancers and now my life savings vanishing into the ether has left a very bitter taste.

Hopefully, its not your life savings and I probably isn't.  a) you were about to draw it.  So, it couldn't be your "life savings". b) its not a product/option that you would use for "life savings". 

Thanks Shepherds you have destroyed my hopes and dreams.

They haven't destroyed your hopes and dreams.  I'm afraid you did by selecting an inappropriate product for your needs.