How does mother invest £50000 for best return?

davegraham7

Hi My mother in law has invested £50000 in a coop savings bond fund after they advised her it would give her big returns. She is tied in for 5 years and her return after 1 year was £600. Obviously she is distraught and has wrote to the ombudsman as she believes she was told untrue information. Her £50000 was in a different saving bond with the coop but they persuaded her to change to this new "super" bond. Her return works out about 1% where as she would have got 6% + in any decent bank without the tie in. She is hoping the ombudsman will make the coop release here money so can anyone advise a decent savings plan??

Thanks in advance

Dave

dunstonh

You have used the terms invest and save in your post. Perhaps that is similar to the confusion that led to your mother picking an investment product when she really wanted a savings product.

Despite years of the tied salesforces from banks and insurance companies mis-selling by the bucketload and recommending expensive and often obsolete products, it still escapes me why people are so willing to use these companies and not get proper independent advice. An insurance salesman isnt up to the job.

Technically, the complaint against the tied agent will only win if it is seen that she was not aware of the timescale and the risk profile doesnt fit. Obviously timescale appears to be no issue so it all hangs on risk profile. The FOS will not consider a complaint about performance. 2007 was not a good year and one bad year doesnt make a bad investment. Investments that had been returning over 10% a year for 5 years turned in virtually nothing or made a small loss in 2007. That happens from time to time.

Was the investment split between ISA and unit trust or did they place it all into one bond? If its all in one bond then that may be a better complaint because ISAs are the most tax efficient and £7k should have gone in there. The remainder could have gone into bond or unit trust but a small amount like £43k would typically be best on unit trust. Plus a CIS agent wouldnt retail with very good terms which a bond often needs to make it best value.

I put in a complaint on behalf of a client in a similar vein against Norwich & Peterborough recently and it got upheld. They had sold a bond without even doing an ISA.

Mithos

davegraham7 wrote: »

Hi My mother in law has invested £50000 in a coop savings bond fund after they advised her it would give her big returns. She is tied in for 5 years and her return after 1 year was £600. Obviously she is distraught and has wrote to the ombudsman as she believes she was told untrue information. Her £50000 was in a different saving bond with the coop but they persuaded her to change to this new "super" bond. Her return works out about 1% where as she would have got 6% + in any decent bank without the tie in. She is hoping the ombudsman will make the coop release here money so can anyone advise a decent savings plan??

Thanks in advance

Dave

Most investments are based on a 5 year period. Sometimes I feel I'm in the minority but a while back I went into a low risk investment based account and over the five years my return was around 7.5% not bad considering the base rate was lower when I invested

One thing I took away was that I could NOT predict my return from year to year, some years did better than others for example.

Your mother in law might do well in following years, but obviously she might not. I suppose my advice is think about sticking it out for a bit longer.