Useless IFA on BBC 3 Counties Radio - Translation please - "12.3K CGT allowance Wrapper"

solidpro

So this IFA guy comes on the local radio speaking in tongues. The presenter essentially want to know what would someone do with £15k in savings. I'm not sure if IFAs are trained to speak in Swahili or it's the way their brains work, but Swahili it is.

He goes on about all the things you shouldn't do (cash, high street savings, cash isas, premium bonds, wine, cars, etc) but gives the man on the Clapham omnibus virtually nothing in plain English advice about what they should do. Doesn't mention bricks and mortar one way or the other. Doesn't mention S&S or lifetime ISAs which I would have thought was the most accessible and risk-variable product readily available to the MOTCO (omnibus) with £15k and time on their hands. Hey ho.

The two things I read between the lines he said was a) look for challenger banks for break-even interest accounts which might get you even stevens against inflation (always seems a lot of time and effort to simply not make any money at all, to me) an b) he says something about "using your £12,300 annual CGT allowance on an equity-related wrapper".

Now we all wish we could invest £15k in something annually, which we can sell for £28,300 each year and not pay any tax on it. But last time I looked, that deal doesn't exist. So what was he talking about??

fred246

As long as the BBC paid them a fee they wouldn't really bother whether they were giving good 'advice'. Actually they would say that they weren't giving advice. We used to have an IFA who gave false information out. It took me a bit of research to ascertain that she was giving out wrong information. When I told her she wasn't a bit bothered. Sounded like she would continue giving false info out.

eskbanker

To be fair, there isn't a one-size-fits-all answer to what to do with any sum of money, and the interviewee doubtless has to explain this patiently to most folk he sees!

However, it does seem odd to give undue prominence to CGT in the context of a high-level discussion, since, as you say, it's unlikely that someone looking to invest £15K would (a) achieve gains of £12.3K in a hurry and (b) use an ISA anyway.  He won't (or at least shouldn't) have been suggesting that gains of that sort should be expected within a year, but CGT is only applicable when disposing of assets so could encompass many years of growth - without hearing the piece it's hard to comment on exactly what he was trying to get across but, as with Martin Lewis, there's only so much that can be conveyed in short media appearances and it's easy to pick up the wrong messages....

dunstonh

So this IFA guy comes on the local radio speaking in tongues. The presenter essentially want to know what would someone do with £15k in savings. I'm not sure if IFAs are trained to speak in Swahili or it's the way their brains work, but Swahili it is.

The problem is that regulations require the IFA to be compliant regardless of media.  IFAs do not get the journlastic opt out.    So, they have to remain generic and avoid being seen to give advice.

He goes on about all the things you shouldn't do (cash, high street savings, cash isas, premium bonds, wine, cars, etc) but gives the man on the Clapham omnibus virtually nothing in plain English advice about what they should do.

That is how it should be.

Doesn't mention bricks and mortar one way or the other.

Why would someone with just £15k consider bricks and mortar?

Doesn't mention S&S or lifetime ISAs which I would have thought was the most accessible and risk-variable product readily available to the MOTCO (omnibus) with £15k and time on their hands. Hey ho.

As Martin Lewis said on this site when he used to own it, the media segments only have limited time and you cannot cover all options.    Someone with just £15k is unlikely to be suitable for risk based investments.

Now we all wish we could invest £15k in something annually, which we can sell for £28,300 each year and not pay any tax on it. But last time I looked, that deal doesn't exist. So what was he talking about??

Just because you can't put £15k aside doesn't mean others cannot or do more.

Have you considered that it is you that has a knowledge deficiency and that referring to that IFA on the radio is useless is unfair?

bigadaj

Very odd thread to open for a rant!
The answer will be totally dependent o the individual's circumstances. If there is only £15k then it would seem foolish to invest. Premium bonds, given average luck, typically exceed returns on cash savings and they are tax free. 
With other assets and looking to invest then that sum is within the annual isa limit, so cgt is irrelevant, or some or all could be paid into a pension which again is cgt exempt. 

solidpro

dunstonh said:

So this IFA guy comes on the local radio speaking in tongues. The presenter essentially want to know what would someone do with £15k in savings. I'm not sure if IFAs are trained to speak in Swahili or it's the way their brains work, but Swahili it is.

The problem is that regulations require the IFA to be compliant regardless of media.  IFAs do not get the journlastic opt out.    So, they have to remain generic and avoid being seen to give advice.

He goes on about all the things you shouldn't do (cash, high street savings, cash isas, premium bonds, wine, cars, etc) but gives the man on the Clapham omnibus virtually nothing in plain English advice about what they should do.

That is how it should be.

Doesn't mention bricks and mortar one way or the other.

Why would someone with just £15k consider bricks and mortar?

Doesn't mention S&S or lifetime ISAs which I would have thought was the most accessible and risk-variable product readily available to the MOTCO (omnibus) with £15k and time on their hands. Hey ho.

As Martin Lewis said on this site when he used to own it, the media segments only have limited time and you cannot cover all options.    Someone with just £15k is unlikely to be suitable for risk based investments.

Now we all wish we could invest £15k in something annually, which we can sell for £28,300 each year and not pay any tax on it. But last time I looked, that deal doesn't exist. So what was he talking about??

Just because you can't put £15k aside doesn't mean others cannot or do more.

Have you considered that it is you that has a knowledge deficiency and that referring to that IFA on the radio is useless is unfair?

Ok so he shouldn't suggest risk-based investments to someone with £15k but then suggests a "GCT equity-based wrapper". Are you saying an equity investment doesn't have risk? You said yourself they shouldn't considering something risky - don't you think you're being unfair there? Maybe it's £15k they can afford to lose.

I don't go to a driving instructor to simply tell me all the things I should not hit and all the laws I shouldn't break.

I don't think it's being unfair that he couldn't simply say 'well many people use other types of ISAs to increase their yield, although some carry more risk than others' rather than talking about some wrapper which nobody even understand what on earth he is talking about.
Definitely not a Martin Lewis in waiting.

solidpro

Oh and if nobody can tell me what a "GCT equity based wrapper" is which is suitable for a risk-averse £15k saver, then I'm definitely not being unfair.

eskbanker

It's a pointless discussion if you're simply summarising your recollection of a conversation that nobody else has heard, so posters on here can't possibly make any meaningful comment without hearing (or reading) the actual words used and their full context.  You've already posted three different versions of a particular phrase that seems to have wound you up so you'll forgive those who may be sceptical of your ability to precis the dialogue accurately....

solidpro

eskbanker said:

It's a pointless discussion if you're simply summarising your recollection of a conversation that nobody else has heard, so posters on here can't possibly make any meaningful comment without hearing (or reading) the actual words used and their full context.  You've already posted three different versions of a particular phrase that seems to have wound you up so you'll forgive those who may be sceptical of your ability to precis the dialogue accurately....

Go and listen to the JVS show on BBC i player at about the 2:35 mark and you'll hear an IFA saying almost nothing of any use 5 different ways!

bowlhead99

solidpro said:

Oh and if nobody can tell me what a "GCT efficient equity based wrapper" is which is suitable for a risk-averse £15k saver, then I'm definitely not being unfair.

Well, you said in your OP that "he says something about ....using your £12,300 annual CGT allowance on an equity-related wrapper". As you can't recall what it was that he did say, it's quite difficult for us to comment, and you may have misheard. Just like you mistyped GCT instead of CGT twice in different posts, and how you described it as  "using your CGT allowance on an equity-related wrapper" the first time, "GCT equity-based wrapper" the next time, and in the most recent post a "GCT efficient equity based wrapper"

Perhaps it was simply that if you only have an extra £15k to invest you are not likely to need to worry about using pension and ISA products as 'wrappers' to protect yourself from gains taxes because you have a £12.3k allowance which will cover any gains you might make from it.

Or perhaps it was a general comment that if you are investing the money today and don't have any ISA or pension allowance available for this tax year, don't worry because you can invest in a general investment account without a wrapper, and then later take them out of the scope of tax by selling enough of them each year to make up to £12.3k of gains within your allowance/exemption without any tax to pay, and then put the proceeds into an equity-based tax-wrapped product (such as ISA or SIPP) to tuck it away for the longer term. 

There are a whole load of sentences that someone could have said on the radio which make perfect sense and contain the words equity, wrapper, and capital gains tax. If the person only has £15k of assets in the whole world, a purely equity-based product is unlikely to be appropriate. If someone already has some investments, an equity based product may well be appropriate (and would likely be more appropriate than trying to buy £15k worth of 'bricks and mortar').

It is very difficult to defend or explain away the comments of someone whose comments we have not heard or seen in a transcript. If it was on 3 Counties in the afternoon between 2 and 6 pm it will be on the recording of the show, available online on BBC Sounds - so tell us what day and when and we can have a a listen.

eskbanker

solidpro said:

eskbanker said:

It's a pointless discussion if you're simply summarising your recollection of a conversation that nobody else has heard, so posters on here can't possibly make any meaningful comment without hearing (or reading) the actual words used and their full context.  You've already posted three different versions of a particular phrase that seems to have wound you up so you'll forgive those who may be sceptical of your ability to precis the dialogue accurately....

Go and listen to the JVS show on BBC i player at about the 2:35 mark and you'll hear an IFA saying almost nothing of any use 5 different ways!

Perhaps you'll see the irony in directing people to "the JVS show", which means absolutely nothing to me and doesn't seem to correspond to anything on iPlayer or on the published schedule for that station!