£100K - Where Do I Put It??!!!

dunstonh

Never put any money into a stocks and shares isa.

Last time I invested £10k into one, it lost me money, damn idiot HSBC representive sold me out.

Thats a daft statement. What about stocks and share ISAs that have capital guarantees? Or the lower risk ones that are less volatile?

Many of us are happy to accept short term losses in the pursuit of longer term gains.

greedbay

dunstonh wrote: »

Thats a daft statement. What about stocks and share ISAs that have capital guarnatees? Or the lower risk ones that are less volatile?

Many of us are happy to accept short term losses in the pursuit of longer term gains.

That is my opinion and personally I think some of your views are daft. Some people like to take risks, some do not.

cassy

you could put the money into a new property and rent it out, giving you an additional income ad security for the future

dunstonh

That is my opinion and personally I think some of your views are daft. Some people like to take risks, some do not.

Just because you dont want to take risks doesnt mean you ignore the stocks and shares ISA.

I'm afraid you come across as someone that invested above their risk profile and lost money on paper and decided to crystallise that loss. If you had invested within your risk profile in the first place then you wouldnt have got yourself into that position. If you dont have an understanding of risk and reward then it isnt a good idea to tell people not to do something. I mean you went to a bank and invested 100% of your money (in investments) into the FTSE tracker which is medium/high risk. That is just asking for volatility. That doesnt make the use of the stocks and shares ISA tax wrapper a bad thing. It makes the investment choice bad and you could have done that in any tax wrapper.

Meltdown_2

dunstonh wrote: »

Just because you don't want to take risks doesn't mean you ignore the stocks and shares ISA.

So it is possible to have a risk-free (zero risk) stocks & shares ISA?

chesky369

"you could put the money into a new property and rent it out, giving you an additional income ad security for the future"

the heady days of making money from letting are over unless you approach the whole business as a 'proper' career - it's not for the amateur, those days are gone.

Aegis

chesky369 wrote: »

"I asked him about the risks and he said in order for me to lose any money the top 100 companies in the UK would have to fold."

This is an out and out lie - Aegis is right, you have a case against HSBC.

What I wonder is how much of a case he has though. I know banks regularly review their processes, but I've seen a fair few client interviews by several tied advisers within my branch now, and there are a lot of forms that need to be signed by the client to demonstrate that they are happy with the risk profile of the product/portfolio that has been suggested to them.

If the bank has such a form that the client signed without reading through the blurb, then they've fairly well covered themselves against any possible claims, and I'd be astonished if any compensation was paid. However, it might feasibly have been a single rogue financial planning manager ignoring bank procedures for his own reasons, in which case it still needs a complaint to be registered in order to find him out.

Still, even if filing a complaint won't get anywhere, it's still not going to actually lose anything, and if a mis-sale is identified, compensation will be due.

dunstonh

So it is possible to have a risk-free (zero risk) stocks & shares ISA?

Yes. Not saying that the options are particularly attractive for the experienced investor but for the inexperienced investor there are guaranteed options. There are a few better options for those willing to take a calculated risk such as the Premier GEB recently mentioned on here where the product just seemed to arrive at the right time. There are also some that have just a death guarantee which may be all that is required for some.

What I wonder is how much of a case he has though. I know banks regularly review their processes, but I've seen a fair few client interviews by several tied advisers within my branch now, and there are a lot of forms that need to be signed by the client to demonstrate that they are happy with the risk profile of the product/portfolio that has been suggested to them.

The majority of complaints historically with the FOS all boil down to risk. A lot of the salesforces still operate on a "pick a number between 1 and 5 to indicate the level of risk you take". That is so old fashioned and would not stand up to a well written complaint under todays standards. The key is documentation of how you obtained the risk. Noting the questions asked and the responses as well as past experiences with investing and the impact on future budgeting as well as considering the IQ of the individual (thats a new one from November last year).

Historically, many advisers just ticked a box to indicate risk or put 100% into the box without any explanation of how they got there. It is those cases which make it easy for an upheld complaint and that is the reason why so many endowments got classed as a mis-sale. Had even a small personalised paragraph been written in confirming how risk had been measured, most endowment complaints would have been rejected.

One snag though in this case is that it was sold by a tied agent and not an IFA. IFAs have to recommend the funds. Tied agents do not. The customer picks the fund from the list presented that match the risk profile chosen. So, in this case greedbay picked the fund (at least on paper he did). So, if the documentation does have a well written risk explanation then there is no mis-sale here (on paper).

Also, it is worth noting that people can sometimes give you an indication of the risk they are willing to take. They will say they will accept a 20% loss in the short term for the aim of long term growth etc. However, when that 20% comes they react differently to what they say. Especially if the drop comes before any growth.

There is also the risk of complacency and greed. In periods when there is sustained growth you tend to find people move up the risk profile as they get enticed by higher percentage figures or see their investments doing well but other higher risk ones doing better. Again, you can relate this back to endowments which had decades of large surpluses and the risks became forgotten. More recently you have had tech stocks or even more recent, China.

Meltdown_2

dunstonh wrote: »

There are also some that have just a death guarantee which may be all that is required for some.

I thought it was guaranteed for all of us.

as well as considering the IQ of the individual

How do you do that, then?

moneybelle

chesky369 wrote: »

"The best thing is that you learn real fast about money yourself; chose an IFA if you cant be bothered."

That could be OK if you have the time, talent and inclination. I COULD cut my own hair; I COULD do all my own decorating and house repairs; I COULD take a course and do my own plumbing. However, I'd rather do what I'm actually good at and leave another professional to do what they're good at.

Except the difference is you see if you are having a good haircut or decorator at the time.

Chosing an IFA is a little more tricky and you will only see the results in the years to come after the IFA has taken his commision.

But its only £100K after all. Lets see; 5% commission would be £5000. Enough to get the whole house decorated and new carpets.

Now that leaves £95K before we even start. Simplified, I know. I don't begrudge IFA's their money, but I would want to be darn sure that they are worth it. Or do it myself and become personally responsible for my own finance.