Investment Bonds v Savings Account

dunstonh

Fergie73 wrote: »

I've obviously been using the wrong ones

The term IFA covers a wide variety of skills and specialisations. It is thrown about too often in an incorrect way. There is no point asking an IFA specialising in corporate affairs about mortgages or asking a mortgage IFA about investments. You also have general practitioner IFAs who dabble in everything (and perhaps are specialists in none) who are best suited to the lower end of the market.

I know some very technical IFAs who are superb advisers. I also know some that are very low skilled. However, they know that but deal with the lower end of the market and focus on the market left by the old home service insurance agent. You dont need much in the way of skills for that. You also arent going to get the best prices and terms at that level either. I also come across some from time to time that really make me angry that they are still around. However, they are becoming less common than they used to be but they are still about. One thing I can say is that given that IFAs do the majority of the business and have the lowest complaints of any retail advice distribution, that you are still more likely to get best advice than not.

ManAtHome

Not necessarily - IFAs are not "mystic megs", and in general low-risk stuff is more for us old gits. In your 30s (like I was at some point), year-on-year performance shoudln't be an issue. For example I "lost" a heap in the 1987 crash (which my IFA didn't predict...), but made a heap in the following 10 years or so.

The answer - if you think (all) IFAs are crap, is to DIY - you can make nearly 10 grand profit a year tax-free and quite a number of low-cost ways of trading.

Sapphire

ManAtHome wrote: »

The answer - if you think (all) IFAs are crap, is to DIY - you can make nearly 10 grand profit a year tax-free and quite a number of low-cost ways of trading.

£10,000 on what initial outlay and with what DIY investments/savings, for example?

ManAtHome

Standard CGT exemption on profits (ok only £9.2k not £10k at present), HSBC Premier has reasonable dealing charges, Hargreaves Lansdown if you want to try SIPPing.. Unfortunately with "all of the above", if you screw up errrm. it's your fault.

baby_boomer

dunstonh wrote: »

IFAs are one of the biggest sellers of [tax free, RPI inflation proofed] NS Certs.

Given that IFA clients tend to be higher rate taxpayers, many of whom are concerned with wealth preservation, it would be scandalous if this were not the case.

Who are the biggest sellers?

Wurz

Fergie73, I'm with you! If it was that easy we'd all be doing it. As dunstonh says, sadly there are those (IFA's?) who pretend they know (lower end of market stuff) and there are plenty of newbies who get caught. I managed to get out without too much pain because I was 4 years into a five-year bond hence just an £1800 penalty. As I had lost quadruple that in just a few days since xmas and double that would have been lost in the two days of posted values after I had cancelled in January, a small price to pay. Mind you, if I had taken the full penalty hit just days after taking the bond in Jan '04, I'd still be thousands better off. Before the regulars bite my head off, I did use what I now know to be a "tied" FA with Lloyd's who sold me an of the shelf bond from Scottish Widows. Is your penalty exit too much? or is it wise to cut losses.....

MrMicawber_2

A very quick quaestion - probably for dunstonh - why is the threshold £100k?

jem16

MrMicawber wrote: »

A very quick quaestion - probably for dunstonh - why is the threshold £100k?

Initial allocations tend to be higher for investments over £100k. This brings the cahrges down to a level which might be below that of unit trusts.

dunstonh

As Jem says, you can get an extra allocation at 100k. Plus, at 100k, there is a good chance you could start exceeding your personal CGT annual allowance.

Its not a rule or some magic figure. Its just a figure that I personally feel that you need at least that amount to make a bond potentially most suitable. Anything less and it would need other justification.

meester

I wonder if the OP is actually talking about a GEB:

"This would provide a useful income as and when we needed it and would allow the money to keep it's real value over 5? years."