Scottish Widows Property Fund

jem16

Thomas_Crown wrote: »

Wurz, this thread is about the S.W. Life Property Fund and this is one option within the Flexible Options Bond. You obviously had money invested in other funds within the bond because your comment about ''4 years of poor performance'' is totally incorrect.

Wurz was invested in a fixed interest fund inside the bond and was also taking income. This caused his capital to drop as the fixed interest fund was not making enough to allow for the income never mind growth to preserve the capital.

Last August he went to an IFA who switched into better funds. Unfortunately the timing was bad and after a good start his bond lost money - not surprising as just about everything has.

Unfortunately Wurz has blamed Scottish Widows for this and thinks anything to do with them is bad news.

Wurz

Jem 16, spot on. Yes I do believe Scottish Widows are bad news and you are correct that the timing of the change of funds was unfortunate but then I wonder how much would have been lost or not if I had remained in the Fixed Interest Fund? Days before the funds were switched there was an unexpected jump of £1600 in value which took the value back up to around £98k.What really rankles is that SWid's could have told me at the outset that if I ever wanted to check or change things - and don't forget that to us we took the advice of the Lloyds FA - because Lloyds are (soon to be "were") our bank. Two years into the Bond when I saw the values go down and wrote to SWid's for an explanation, all they had to do was tell me to go to an IFA. They didn't. They prevaricated, wrote umpteen page letters justifying why I didn't have a valid complaint over "poor service" when all they had to do was say "get independent advice" Ok, I would still have complained that I was paying them a management fee and why should I go elsewhere, and to be honest it was one of the customer service people who said that I should go to an IFA but that I hadn't heard it from them. So, give them £100k and no support ever-after. Not my idea of keeping the customer satisfied.

On the plus side I must pay respect to the Customer Services Team (well, one of them but she would blush) in Edinburgh who ensured my cash (what was left) was in my bank account by this morning. The original time-quote from another adviser was up to 10 working days. I might still be able to get a High Street Offer before the end of the month.

Mind you, and this really takes the biscuit, my Wife immediately transferred the cash into the Lloyds on-line saver that is paying 4%. We've never made so much! Well, not over the past four years anyway. It won't stay there long tho'. Now, not wanting to cut off my nose to spite my face, anyone know where to re-invest £100k? (we got back just under £92k, but will top-up to a round figure)

jem16

Wurz wrote: »

Jem 16, spot on. Yes I do believe Scottish Widows are bad news and you are correct that the timing of the change of funds was unfortunate but then I wonder how much would have been lost or not if I had remained in the Fixed Interest Fund?

Whilst I sympathise with your predicament I cannot agree with your sentiments towards Scottish Widows. Throughout their website it is always saying "Consult your financial adviser". You did this - unfortunately you chose a tied adviser and this is where you should be laying the blame.

Ok, I would still have complained that I was paying them a management fee and why should I go elsewhere, and to be honest it was one of the customer service people who said that I should go to an IFA but that I hadn't heard it from them. So, give them £100k and no support ever-after. Not my idea of keeping the customer satisfied.

The management fee pays for the management of the fund/s. It does not pay for advice on which fund/s to choose. That is the job of your adviser and to whom you pay another fee. Scottish Widows did what they were meant to do as the provider. In fact if you had used the SW Property Fund that this thread is about you would be around 25% up even after taking 5% income each year. Would you have been complaining then about SW?

Now, not wanting to cut off my nose to spite my face, anyone know where to re-invest £100k? (we got back just under £92k, but will top-up to a round figure)

Don't take this the wrong way - but are you sure you are really suited to investing? If you had allowed the funds that your IFA switched you to in August time to recover, you would not have lost an additional £1800 in penalty fees.

dunstonh

What really rankles is that SWid's could have told me at the outset that if I ever wanted to check or change things - and don't forget that to us we took the advice of the Lloyds FA - because Lloyds are (soon to be "were") our bank.

Lloyds staff are not authorised to give advice on fund switches. Again, not a problem with Scot Widows but a limitation of buying the product through a tied agent.

Two years into the Bond when I saw the values go down and wrote to SWid's for an explanation, all they had to do was tell me to go to an IFA.

The policy is allocated to Lloyds bank as agent so they arent going to tell you to see an IFA.

They prevaricated, wrote umpteen page letters justifying why I didn't have a valid complaint over "poor service" when all they had to do was say "get independent advice" Ok,

Sounds like they treated your comments as a complaint. In which case they have to follow a fairly defined process.

Not my idea of keeping the customer satisfied.

You are blaming Scottish Widows. You shouldnt be. You should be blaming Lloyds Bank or perhaps even yourself for using a tied agent.

Scottish Widows will do as they are told. The instructions can come from you or an IFA. Lloyds wont allow their staff to give those instructions (Same with virtually all tied agents).

Mind you, and this really takes the biscuit, my Wife immediately transferred the cash into the Lloyds on-line saver that is paying 4%. We've never made so much!

Stockmarket was up just over 4% in one day just after you took it out. You jumped too quickly.

Don't take this the wrong way - but are you sure you are really suited to investing? If you had allowed the funds that your IFA switched you to in August time to recover, you would not have lost an additional £1800 in penalty fees.

Could have even put it in the cash fund until the 5 years were up to save that money. It wouldnt have gone down but it would have paid close to an average savings account and not paid an exit charge.

Thomas_Crown

jem16 wrote: »

....... In fact if you had used the SW Property Fund that this thread is about you would be around 25% up even after taking 5% income each year. Would you have been complaining then about SW?

jem16, the figures you mention are very accurate. My initial investment of £20,000 in the S.W. Property Life fund was enhanced by a few hundred pounds by Chartwell. It has been invested since September 2002 & it peaked at around £28,800 in July 2007. I have taken 5% monthly income of £83.33 & my investment is now worth about £25,200.

Wurz

Hummm, see your point. Took advice from Lloyds Bank, who sent round a fixed FA, who sold me a SWid's Bond. Lloyds own Scottish Widows, who can't advise me. FA quits Lloyds. I'm on my own. Yup, it's my fault.

Mind you, if I had known about this forum then, I would have posted the question: £100k, where to put it? and would have had the benefit of advice before investing instead of after.

If enough people read these posts and realise that the tied FA is quite possibly not the right choice (notice the pc correct phraseology) then I will have achieved satisfaction. Meanwhile, my loss of close on £9k will continue to be the reason why I will hound SWids/Lloyds. Not out of spite (...really?) but to ensure that an independent adviser will recommend a correct portfolio (even SWids) unlike a tied one from Lloyds who will sell you whatever is that weeks best commission earner.

dunstonh

Hummm, see your point. Took advice from Lloyds Bank, who sent round a fixed FA, who sold me a SWid's Bond. Lloyds own Scottish Widows, who can't advise me. FA quits Lloyds. I'm on my own. Yup, it's my fault.

Its your fault you went to a tied agent

My point is that you are blaming Scot Widows when you should be blaming LloydsTSB. Or in reality not blaming anyone at all because you wanted a service that LloydsTSB and Scottish Widows themselves could offer you. That service can only come from an IFA.

Mind you, if I had known about this forum then, I would have posted the question: £100k, where to put it? and would have had the benefit of advice before investing instead of after.

I doubt it would have made any difference. You got advice from an IFA last August and the recommendations were fine. However, just 6 months into an investment which should last at least 5 years you get a small drop and you go against the recommendations and pull out.

It has increasingly become apparent that you are just not suited to investing. You are better off letting your money be eroded by inflation and getting less over the long term. Either that or you need a good training session on how investments work, what the potentials are in both directions and what you should expect.

I have no issues with you slagging off Lloyds. The more people that realise the limitation of a tied agent recommendation the better. However, the product itself is not at fault and therefore not the product provider, Scottish Widows.

Wurz

Dunstonh, agree with a lot of what you say,but remember it was my IFA who agreed that pulling out of SWids was the right thing to do as "there is something serious going on with Swids". Remember a previous entry. As for it being 6 months in to the start of what should be a Five year investment, and being a "small drop" the last posted figures before the website crashed indicated that the drop would have been in the region of £10k, and who knows how much further it dropped in the past few days. Perhaps rammieD can let us know his latest figures. Point is, a 10% drop takes an awful lot of catching up, even with a "better choice" of funds. The fact that ALL of them fell was the clincher. Also, the fact that on the day of my encashment I received a letter saying that SWid's property funds were being locked in to a 180 day situation and you had no choice suggests to me that such funds are going to drop even further! But rest assured, my investing days are not over, I'll just consult this forum first before burning my fingers again...

jem16

Wurz wrote: »

Dunstonh, agree with a lot of what you say,but remember it was my IFA who agreed that pulling out of SWids was the right thing to do as "there is something serious going on with Swids". Remember a previous entry.

This would be the same IFA who suggested a move into Canada Life's investment bond? The bond which Dunstonh said wasn't as good as the one you have?

How much of that 109% allocation would have come to you and how much to the adviser? If most was going to him might this have been a reason - may of course not have been.

I am about to contribute more to my SW personal pension ( considered one of the best around ) - haven't noticed my adviser telling me to stay away from SW.

As for it being 6 months in to the start of what should be a Five year investment, and being a "small drop" the last posted figures before the website crashed indicated that the drop would have been in the region of £10k, and who knows how much further it dropped in the past few days. Perhaps rammieD can let us know his latest figures.

He did - it's up £500. As Dunstonh said the stockmarket was up over 4% in one day just after you left.

Point is, a 10% drop takes an awful lot of catching up, even with a "better choice" of funds. The fact that ALL of them fell was the clincher.

Almost every fund in the world fell so it would have been more surprising if yours hadn't.

Also, the fact that on the day of my encashment I received a letter saying that SWid's property funds were being locked in to a 180 day situation and you had no choice suggests to me that such funds are going to drop even further!

Yes I got that letter too. However it's being done to protect those still in the fund and to protect the value of the fund. If SW is forced to sell properties in a falling market to pay those that want to leave it's going to make matters worse.

But rest assured, my investing days are not over, I'll just consult this forum first before burning my fingers again...

So what do you plan to do? It sounds like you won't be happy unless your investment is always increasing and this is unrealistic. Saving would see an increase due to interest but a decrease in real terms due to inflation.

EdInvestor

dunstonh wrote: »

I doubt it would have made any difference. You got advice from an IFA last August and the recommendations were fine. However, just 6 months into an investment which should last at least 5 years you get a small drop and you go against the recommendations and pull out.

It has increasingly become apparent that you are just not suited to investing.

This is a good example of one major reason why I regularly warn about investment bonds.These risky products are frequently sold to people who don't have the first clue about investing and think the bonds are really much the same as a fixed rate savings bond with virtually no additional risk. This was particularly obvious when with profit bonds were the main type of IB sold before the last crash.

These novice investors are often retired and can't afford to lose capital which can be a particularly alarming feature of the bonds in a market down turn when they are taking income. This leads to panic, and magnifies losses as they pull out money incurring penalties rather than leaving it in and waiting for the market to recover.

I repeat: investment bonds are NOT suitable for people who have no experience of risk-based investment.

If you have made losses from an IB and have no investment experiece and were not properly warned of the risk, don't just whinge on websites, make a misselling complaint.