Halifax ISA Investor for Income

lyn64

I was badgered into having an ISA Investor for Income back in 2004 by a Halifax salesman (otherwise known as a financial adviser). I kept adding to it. I was receiving a quarterly income (I like to call it interest). I must admit that I didn’t pay much attention to what was going on with the ISA, probably because information was not readily available and I just assumed that because I was getting the income, the fund was doing well. I was horrified recently when I realised that approximately £2,500 has disappeared from my capital and on checking with the local financial adviser was told to surrender the ISA, and that I would never recover my losses and to put the money somewhere else. I also spoke to a “body” in the York Office who told me that it would recover when the interest rates fall (that doesn’t seem to be happening at the moment and according to the news today will not happen this year). I am a pensioner and rely on this extra income to pay my way as I don’t receive any other benefits. I am worried that my capital is being used to pay the small income I receive. Has anyone else out there had experience of this ISA and if so, could they advise me what I should do?

dunstonh

I was badgered into having an ISA Investor for Income back in 2004 by a Halifax salesman (otherwise known as a financial adviser).

As from next year they wont be. The FSA has proposed (finalised in Oct this year) that tied agents will not be able to call themselves advisers.

Has anyone else out there had experience of this ISA and if so, could they advise me what I should do?

Halifax funds are rubbish. The concept of using the ISA is fine but the Halifax have a rubbish range of funds with generally poor performance.

The returns have been poor because 2007 in general was a bad year (and 2006 wasnt great for low risk). Plus, because you have been taking money out of it thta makes it harder to grow (the distributions should have been reinvested to buy more units if you didnt need the income which it sounds like you didnt as you kept adding to it).

I suggest you get a proper adviser (and the only type that will exist on packaged products from next year) and see an IFA to see if they can decide whats best for you. It is possible that you may have grounds for complaint if the Halifax havent left you with a sufficient cash reserve and your finances are tight. The IFA can give guidence on that.

lyn64

Have done what you suggested and am currently speaking to an IFA

amz84uk

Please let me know how you get on.

I've been 'sold' the same deal. I was advised to put £10k into some account that I wouldn't be able to touch for at least 3years, otherwise I would get less money back, but I didn't like that.

This afternoon, the 'salesman' sold this Halifax ISA Investor in which I have to contribute £300 every month. I did question whether it is the right time to invest, with the economy as it is. The salesman said that now is the best time to invest, as it is at its lowest level ever, but I said that it will go down even more, and I should invest after 3months.

Basically, is it a good decision that I have made contributing £300 per month into this?

debbie42

amz84uk wrote: »

The salesman said that now is the best time to invest, as it is at its lowest level ever, but I said that it will go down even more, and I should invest after 3months.

Basically, is it a good decision that I have made contributing £300 per month into this?

See Dustonh's post above. It says it all, really.

The 3 months wait is a bit spurious unless you can tell when the bottom of the market is, and if you (or the salesman) can then, great, let the rest of us know, please!

edit: do S&S ISAs have a cooling off period like other savings?

jem16

amz84uk wrote: »

This afternoon, the 'salesman' sold this Halifax ISA Investor in which I have to contribute £300 every month. I did question whether it is the right time to invest, with the economy as it is.

I would cancel it now whilst you are in the cooling off period (check how long you have) - not because of the economy but simply becasue it's a Halifax product and generally rubbish.

Then go and see an IFA although it might not be a large enough investment.

dunstonh

14 day cooling off period typically to avoid charges. It doesnt avoid any downturn in investment value though.

HONESTY101_2

Dunstonh:-Are you really an advisor using terminology like rubbish. Good job.

'14 day cooling off period typically to avoid charges. It doesnt avoid any downturn in investment value though'--No charges thus all cancellation does is cancel the ISA subscription for that tax year.

Being ignorant to the fact there is possibility of capital depreciation is no excuse to complain. Naivity/ignorance is bliss eh?

Potentially the corporate bond market is liable to capital loss, and during 06-07 had a negative return of 6%. This was due to several consecutive interest rate hikes. There was an expectation this would improve when interest rate lowered.

However...

If people took their heads out of the sand they would notice that there has been a global credit crisis for nearly a year....This has effected bonds for very obvious reasons....Far to obvious to discuss on a Forum about Investments.

The question has to be whether you were made aware of the potential for capital loss by the advisor. they have an obligation to assess your attitude to risk, look at your personal circumstances and advise a suitable investment.

You have not stated how much you received in Distributions. Or indeed how much you have invested. You mentioned 2500 loss. Is this including distrubtions. The questions go on.

You have typed less than a paragraph in the hope for a quick fix answer. Providing little to no information about the investment. Im more than happy to help guide you through what you need to do if you were mis-sold the plan. If so please PM me. But It becomes tiresome to establish legitimate mis-selling complaints to those who are just jumping on the bandwagon.

The Halifax issue statements every 6 months as per FSA regulations, they have recently changed the mailing date to Jan and June, Thus you will have received a statement in Oct 07, and then again Jan 08. Enough said...

Please do PM if I can help as there are alot of people in your situation who maybe place too much trust in the advisor. But with good intentions. Sorry to be so upfront but its important to understand the individual cirumstances.


Regards

Anon

p.s anyone in similiar boat happy to help.

HONESTY101_2

Please bare with the grammer and spelling, I typed a much longer in depth response which I manged to delete whilst trying to submit. Also dyslexic although no excuse...

LittleVoice

HONESTY101 wrote: »

'14 day cooling off period typically to avoid charges. It doesnt avoid any downturn in investment value though'--No charges thus all cancellation does is cancel the ISA subscription for that tax year.

Hi - please, what did you mean by "cancel" in the text I have put into red above?

HONESTY101_2

You are only able to subscribe to one stocks and share ISA each tax year. If you decide to close down the ISA without using cancellation wording/sending the cancellation form within the first 30 days you will not be able to invest into another ISA that tax year. You may still receive the market value of the shares, this may be more or less than originally invested.

If the cancellation form is returned within allotted time you will be able to take out another ISA that tax year. Again you may receive less than your original investment however, In the event of growth above the original investment you will not benefit and will only receive original amount.

Financial institutions who manage ISA's will send annual 'tapes' to the Inland Revenue detailing customers who made investments in the given tax year. I pressume these are cross reference on a database to find who funds multiple ISA's but not entirely sure. They seem pretty quick on rebates..