CTF Value complaint

blangi

I created a Child Trust Fund with The Share Centre when my daughter got her government £250 cheque 18 years ago. I have just phoned the new provider Killik & Co. The present value is £263!!!! Over 18 years it has only made £13. I must admit, it was the one thing we missed when we moved home. But this is crazy. Is it worth complaining? Is there anyone I can complain to?

cloud_dog

blangi said:

I created a Child Trust Fund with The Share Centre when my daughter got her government £250 cheque 18 years ago. I have just phoned the new provider Killik & Co. The present value is £263!!!! Over 18 years it has only made £13. I must admit, it was the one thing we missed when we moved home. But this is crazy. Is it worth complaining? Is there anyone I can complain to?

But if you opened it with the Share Centre, I assume you must have chosen the investment for it, no?

wmb194

blangi said:

I created a Child Trust Fund with The Share Centre when my daughter got her government £250 cheque 18 years ago. I have just phoned the new provider Killik & Co. The present value is £263!!!! Over 18 years it has only made £13. I must admit, it was the one thing we missed when we moved home. But this is crazy. Is it worth complaining? Is there anyone I can complain to?

What was it invested in?

Malthusian

What was it invested in before it was transferred to Killik?

dunstonh

Over 18 years it has only made £13. I must admit, it was the one thing we missed when we moved home. But this is crazy. Is it worth complaining?

What did you choose to invest it in? (or was it not invested and left in cash)

blangi

cloud_dog said:

blangi said:

I created a Child Trust Fund with The Share Centre when my daughter got her government £250 cheque 18 years ago. I have just phoned the new provider Killik & Co. The present value is £263!!!! Over 18 years it has only made £13. I must admit, it was the one thing we missed when we moved home. But this is crazy. Is it worth complaining? Is there anyone I can complain to?

But if you opened it with the Share Centre, I assume you must have chosen the investment for it, no?

It was invested in Legal & General UK Index R Acc Fund

blangi

dunstonh said:

Over 18 years it has only made £13. I must admit, it was the one thing we missed when we moved home. But this is crazy. Is it worth complaining?

What did you choose to invest it in? (or was it not invested and left in cash)

dunstonh said:

Over 18 years it has only made £13. I must admit, it was the one thing we missed when we moved home. But this is crazy. Is it worth complaining?

What did you choose to invest it in? (or was it not invested and left in cash)

It was invested in Legal & General UK Index R Acc Fund

masonic

blangi said:
It was invested in Legal & General UK Index R Acc Fund

A sum of £250 invested in L&G UK Index R Acc in 2005 and left there would be worth about £750 today before any charges from The Share Centre and Killik & Co.

Suggests charges averaging ~£25 per year over the 18 years, or a steady 6.3% of the investment. Have they provided you with any statements or valuations over the years?

MX5huggy

Was there any mention of Lifestyling in the funds? 

This is the transfer of monies to “safer” investments towards the end of the investment period. Its been a disaster because safer bonds have been a subject to a once in generation blood bath. 

Malthusian

MX5huggy said:

Was there any mention of Lifestyling in the funds? 

This is the transfer of monies to “safer” investments towards the end of the investment period. Its been a disaster because safer bonds have been a subject to a once in generation blood bath. 

If they switched the whole lot from L&G UK Index into long dated gilts in April 2020 that could maybe just about turn a £250 investment in 2005 to £263 today, after you account for the provider's charges. (In the absence of The Share Centre's charges, £250 would become £700 in the beginning of 2020, which then falls to £571 at the bottom of the lockdown crash, which you then switch to gilts which fall to £300 in the present day.) This is an extremely unlikely scenario and isn't how lifestyling works; it's usually a gradual process that takes place over 5 years or longer.
It looks like small investments like this one were automatically switched into Killik's "SILO" multi-asset portfolios, but no matter how badly those have done, it seems unlikely to account for the performance. (Killik took over in September 2021.)
@OP: I think you need to look at your annual statements and check exactly how the CTF was invested over its lifetime, and how it performed each year, because the only explanations I can think of for those figures are: 

• Money was withdrawn. This shouldn't have been possible as it is a CTF.
• There were fixed charges on the account that ate up most of the value (as per Masonic). Killik's website says that The Share Centre's charges were either 0.75%pa or 0.6%pa (the website contradicts itself) plus L&G's fund costs, so if that applies to your account, that isn't the answer. 
• The premise is wrong and the CTF wasn't invested in the L&G fund throughout those 18 years.

As a theoretical example, if the parent had panicked at the bottom of the credit crunch in 2008 / 2009, switched out of L&G UK Index into cash and then left it there for the rest of its life, it could have produced those figures. 

artyboy

Was Lifestyling ever a 'thing' for CTFs? I ask because I thought the whole premise was for use in pensions to eliminate volatility ahead of taking an annuity/25% cash lump sum. Even if gilts took a bath, like they did recently, the relative annuity value would remain unchanged...

Not sure how any CTF provider could see that moving into gilts ahead of an 18th birthday would serve any real purpose - all into cash maybe, but why gilts?