Aviva Investment Bond performing poorly

barnekin7

My mother has an Investment Bond with Aviva.  It has lost £5k in the last year.  Should she close it and put in a bank?  Is there a better product for her?

I should add that neither of us knows the first thing about finance.

eskbanker

Investing is a long term activity which unavoidably entails short term fluctuations, so losing value isn't in itself a reason to change tack, and buying high and selling low isn't a recipe for success.  Who suggested she buy this bond, what's the money for, when will she need it, etc?

barnekin7

it was recommended by her IFA back in 2008.  She doesn't immediately need it, but is concerned it might dwindle away. 

eskbanker

barnekin7 said:

it was recommended by her IFA back in 2008.  She doesn't immediately need it, but is concerned it might dwindle away. 

Does she still deal with the IFA?  They should have made it clear that investments can go down as well as up (especially true around 2008!) and the value will already have fluctuated significantly on numerous occasions over those 14 years, but either way there's no harm in reviewing whether it's still suitable for her current financial circumstances, and in particular when it's likely to be needed, in rather more specific terms than 'not immediately'.

dunstonh

 It has lost £5k in the last year. 

£5k could be a little. It could be a lot.  £5k loss on £10k is a lot.  £5k loss on £100k is nothing.

 Should she close it and put in a bank? 

Why do you think that may be a better option and why do you think the Aviva bond isn't?

Is there a better product for her?

Nobody can answer that as you haven't told us anything about the product she has or the objectives.  Aviva investment bond could be ex Norwich Union, AXA, Friends Provident or other.  Each of those had different versions over the years and some of them had as many as 300 funds available on them.   Some have  capital protections that apply every 5 years. Some have the ability to include smoothing.  

We also know nothing about your mum to say what is best.

it was recommended by her IFA back in 2008.  She doesn't immediately need it, but is concerned it might dwindle away. 

What did your mum do in all the other negative years or periods (larger loss during 2020, similar in 2018 and 2015 but larger in 2008)

In a typical 5-year period, you get 3 growth years, 1 nothing year and 1 negative year.    2022 has been the first negative calendar year since 2008.   When you get a negative year, you dont do anything as its part of the normal ups and downs that occur with investing.

Albermarle

I should add that neither of us knows the first thing about finance

And we do not know  anything about your situation, as you have provided hardly any details.

Beddie

barnekin7 said:

it was recommended by her IFA back in 2008.  She doesn't immediately need it, but is concerned it might dwindle away. 

You need to speak to the IFA, they will answer all of your questions as they know more about your situation.