Any carpet-baggers out there?

MiserlyMartin

I don't think we will have any more flotations in the next 10 years or so, if at all. The mutual sector is strengthening at the moment as far as building societies go. A few months ago, Brittania Building Society acquired Bristol and West Bank's branch network.

I do have a few £100 accounts dotted around just in case any floatation does occur (not through my vote) BUT, carpetbagging generally is a bad idea. At least if a society does convert I will get something, but I don't support it. I would rather it didn't happen at all. You guys need to consider the morals of what you are doing. If all building societies converted and disappeared, you would find that the competiveness in mortgage rates, bank charges etc etc would also disappear. This would certainly lead to more expensive mortgages, current accounts, lower savings interest rates, no more fee free visa purchases abroad and things like that. One of the reasons the UK has things like free current accounts with credit balance interest is due to building societies. Get rid of them and we will be like the US, with hardly any free current accouts and expensive mortgages.

I am a long standing customer of nationwide. When the vote was taken a few years back on demutualisation, I firmly voted "NO" for the reasons above, despite the prospect of a large windfall. If any other Building Society asked me to vote in the future on demutualisation, my vote would be no everytime. A few hundred quid is a one off gain that will lead to that gain being wiped out in higher bank charges in the future. This is also true for everyone regardless, even if you don't use building societies products at all because the banks will then charge you more.

Finally if you don't give a stuff about the above, then think of your children and future generations that could suffer financially by you killing off the building societies.

EdInvestor

MiserlyMartin wrote:

I don't think we will have any more flotations in the next 10 years or so, if at all. The mutual sector is strengthening at the moment as far as building societies go.

Do you think so? There are very persistent rumours about merger discussions going on behind the scenes, because the smaller societies are severely hit by the increasing costs of regulation and compliance, especially now mortgages are under the FSA.

If all building societies converted and disappeared, you would find that the competiveness in mortgage rates, bank charges etc etc would also disappear.

Not sure about that either.Most of the price-cutting competition in recent years seems to be from internet banks, not bsocs.

One of the reasons the UK has things like free current accounts with credit balance interest is due to building societies. Get rid of them and we will be like the US, with hardly any free current accouts and expensive mortgages.

But there are thousands of building societies in the US - they are called "savings and loans" or "thrifts". They are most well known for getting into a massive crisis about 15 years ago and nearly going collectively bust.Had to be bailed out by the taxpayer to the tune of $50bn.:( I don't think there's any reason to think they keep costs down - indeed you could say it's quite the reverse.

No doubt there are arguments in favour of maintaining mutuals, but I don't think these ones stand up to much inspection. I suspect there would be more support if the building society managments paid more attention to looking after the members' interests, rather than awarding themselves fat salaries, bonuses and pensions over which the members have no control.

cheggers

The sooner some more Building Societies convert the better.

I'd vote "yes" every time for conversion.

Even if another 10-20 socieities converted to plc's it would not mean all the other societies would follow. Quite often becoming a Bank means the products on offer become more competitive, look at the Halifax. There savings (7% reg saver, 10% Kids saver) and mortgage rates and cash back bank accounts lead the field.

If I gained £100-1,000 for a windfall, it would not lead to increases in bank charges. Financial institutions are more competitive than ever before, they now realise a customer is not customer for life, and will switch according to rates, charges and fees.

Finally how can people defend building societies, when some of there accounts have minimum opening balances of £500 and only pay 0.5% interest on the account.

dealseeker

MiserlyMartin wrote:

Finally if you don't give a stuff about the above, then think of your children and future generations that could suffer financially by you killing off the building societies.

Yes I'd vote yes every time and open up accounts in the kids name too. Wouldn't want them to miss out.

100% along with Cheggars and Ed investor.

MiserlyMartin

cheggers wrote:

look at the Halifax. There savings (7% reg saver, 10% Kids saver) and mortgage rates and cash back bank accounts lead the field.

Their standard variable rate does not beat Nationwides.

cheggers wrote:

If I gained £100-1,000 for a windfall, it would not lead to increases in bank charges. Financial institutions are more competitive than ever before, they now realise a customer is not customer for life, and will switch according to rates, charges and fees.

It would lead to an increase in rates and charges if ALL of the societies went plc. You talk of 10-20 BS converting like they are a infinate resource. I don't have the exact figures but I doubt we have many more than 20 left now. Customer loyalty is something that is becoming rare, you are correct, but a massive amount of financial institutions couldn't care less. You only have to look at the mortgage market and mainly Banks which offer a good deal to new customers and a lousier then lousy deal to their existing ones. They don't seem to care about customers switching. Instead they rely on the less savvy types of customers who will stay loyal because they either don't know better or are too busy to care or switch. Which of course is what this site is about. Educating jo public to care.

cheggers wrote:

Finally how can people defend building societies, when some of there accounts have minimum opening balances of £500 and only pay 0.5% interest on the account.

With carpetbaggers such as you around I don't blame them for raising minimum operating balances and paying low interest so your speculative money pot gains little interest. Banks have even more poor paying accounts coupled with far fewer decent products.

MiserlyMartin

dealseeker wrote:

Yes I'd vote yes every time and open up accounts in the kids name too. Wouldn't want them to miss out.

You obviously don't see beyond a bit of short term gain. They'll pay for it. It will vary from person to person but 5-10 years time they will have spent that windfall in increased charges etc. And then it will be only costing them money. And as for the childrens children...

dealseeker

MiserlyMartin wrote:

You obviously don't see beyond a bit of short term gain. They'll pay for it. It will vary from person to person but 5-10 years time they will have spent that windfall in increased charges etc. And then it will be only costing them money. And as for the childrens children...

If its going to happen anyway then why not join the bandwagon. Better to have your stake and a piece of the action and than to sit it out miss out on windfall due to misplaced loyalty and to take the moral high ground. I agree its a good idea to think of the future and important to be aware of the likely changes ahead. So long as the person switches to the best available home for their funds at any given time, leaving only the minimum in potential windfall accounts I can't see how this can be a bad invetment choice - unless the windfall never comes ;-).

There is no point in having loyalty to ANY large organisation. Building societies are not always the "best" accounts they like to portray. Rarely do they show any loyalty to their customers anyway. Thats why this is a consumer revenge site... and is so popular. I'll sleep easy tonight.

steady__eddie

I doubt we have many more than 20 left now

Currently 63. (Building Societies Association)

plumb1_2

My advice is to forget about BS for a windfall if outside the top 10, and get £25 Steakholder pension funds with Mutual Insurance company's.
Bang £25 in them and forget.The max they can charge admin is 1% and the average yearly increase is 3%. So you never loose,and dont forget MR Gorden Brown also gives you 20%+ on the £25 investment.

Go for the likes of Weslylen,Royal London,NFU,LV, Royal Liver etc.
To late for Standard Life now(but 4 windfalls on the way to the Plumb household);)

dealseeker

plumb1 wrote:

My advice is to forget about BS for a windfall if outside the top 10, and get £25 Steakholder pension funds with Mutual Insurance company's.
Bang £25 in them and forget.The max they can charge admin is 1% and the average yearly increase is 3%. So you never loose,and dont forget MR Gorden Brown also gives you 20%+ on the £25 investment.

Go for the likes of Weslylen,Royal London,NFU,LV, Royal Liver etc.
To late for Standard Life now(but 4 windfalls on the way to the Plumb household);)

Sounds like a good idea. Obviously into "account/policy" with membership rights. Any recommendations on which policies that offer minimum deposit /premiums like you suggest? Obviously not looking for financial advice just where to bag potential windfall for minimum investment...