Thanks. Must be the over 55's insurance company then. Still wouldn't buy shares in them. I might be owning them in my pension via one of the UK equity funds though.....but I leave that decision to the fund manager, who has analysts to help him & who go and speak to the MD & CEO to find out the plans for the company. Silly me.
Hopefully some legal types are preparing some collective lawsuits. If this were the US they would already be up and running.
I can understand the frustration and anger, but the reality is that apart from some degree of satisfaction from winning any lawsuit, the money isn't there.
Hopefully some legal types are preparing some collective lawsuits. If this were the US they would already be up and running.
I can understand the frustration and anger, but the reality is that apart from some degree of satisfaction from winning any lawsuit, the money isn't there.
I guess you are right. But at the same time if Woodford himself, the FCA, and Hargreaves Lansdowne escape unpunished, that is totally unacceptable, and will ensure that no lessons will be learnt and no measures put in place to ensure no repeat.
I will have to look up the following to remind myself of the circs. but back in 2003, a fund called Exeter High Income collapsed. My mum had some money in it, on the advice of a mate of mine who was an IFA. (He is now neither an IFA nor a mate). As I recall, the FCA (or its predecessor) eventually intervened, and I think we got all her money back, albeit in stages. I remember at that time being very impressed with the way that process kicked in and that justice was served.
I will try to look up more details of that. It seems pretty relevant.
Hopefully some legal types are preparing some collective lawsuits. If this were the US they would already be up and running.
I can understand the frustration and anger, but the reality is that apart from some degree of satisfaction from winning any lawsuit, the money isn't there.
I guess you are right. But at the same time if Woodford himself, the FCA, and Hargreaves Lansdowne escape unpunished, that is totally unacceptable, and will ensure that no lessons will be learnt and no measures put in place to ensure no repeat.
I will have to look up the following to remind myself of the circs. but back in 2003, a fund called Exeter High Income collapsed. My mum had some money in it, on the advice of a mate of mine who was an IFA. (He is now neither an IFA nor a mate). As I recall, the FCA (or its predecessor) eventually intervened, and I think we got all her money back, albeit in stages. I remember at that time being very impressed with the way that process kicked in and that justice was served.
I will try to look up more details of that. It seems pretty relevant.
I know little or nothing of Woodford and his shenanigans (not enough money myself as a mere LEAVER ) but was the fund not covered by the 85% FCA thing or is that just banks and building societies essentially?
Hopefully some legal types are preparing some collective lawsuits. If this were the US they would already be up and running.
I can understand the frustration and anger, but the reality is that apart from some degree of satisfaction from winning any lawsuit, the money isn't there.
I guess you are right. But at the same time if Woodford himself, the FCA, and Hargreaves Lansdowne escape unpunished, that is totally unacceptable, and will ensure that no lessons will be learnt and no measures put in place to ensure no repeat.
I will have to look up the following to remind myself of the circs. but back in 2003, a fund called Exeter High Income collapsed. My mum had some money in it, on the advice of a mate of mine who was an IFA. (He is now neither an IFA nor a mate). As I recall, the FCA (or its predecessor) eventually intervened, and I think we got all her money back, albeit in stages. I remember at that time being very impressed with the way that process kicked in and that justice was served.
I will try to look up more details of that. It seems pretty relevant.
I know little or nothing of Woodford and his shenanigans (not enough money myself as a mere LEAVER ) but was the fund not covered by the 85% FCA thing or is that just banks and building societies essentially?
The FSCS does not cover poorly performing investment losses. Only fraud and negligence.
The Exeter collapse was covered because the fund was sold as low risk but was nothing of the sort, with a circle of incestuous loans to associated businesses.
Woodford sought high returns through picking a small number of stocks, using the Warren Buffet approach, for which he had built up a reputation. The Woodford collapse is due to illiquidity of the investments and inability to redeem the investments when his magic wore off and his chosen stocks nosedived and investors wanted out. The fund was high risk from the point of view of being 100% dependent on success from the skill of the manager in picking a small number of stocks. So was the reverse of what is recommended frequently on here to reduce risk (and potential returns) - diversification.
Compensation will likely rest on investors proving they had been mis-sold the fund by intermediaries and advisers, as distinct from Woodford doing anything wrong. I suspect HL are bricking it at the moment. Woodford turned out to be arrogant and over confident in his own ability, but that is not fraud or negligence. Luck plays a bigger part than skill in generating performance, and it's not always measured when selecting managers, and Woodford probably rode his luck for a long time.
The main problem for the collapse of the Woodford fund is investors all wanting their money out at the same time.....
As @Dippenhall says, the fund was invested heavily into illiquid assets & when redemptions came in other easily redeemable assets were sold.....making the problem even worse.
There was nothing inherently wrong with the fund, just that when everyone wants all their money out at the same time then there is not enough ready cash to go round. Just the same as a run on a bank.
The main problem for the collapse of the Woodford fund is investors all wanting their money out at the same time.....
As @Dippenhall says, the fund was invested heavily into illiquid assets & when redemptions came in other easily redeemable assets were sold.....making the problem even worse.
There was nothing inherently wrong with the fund, just that when everyone wants all their money out at the same time then there is not enough ready cash to go round. Just the same as a run on a bank.
But I distinctly remember that when i mentioned the fund, before it was frozen, you were rather pleased to inform us that you had bailed out yourself some time earlier.
Phew. Just managed to extract £2.5k out of Funding Circle, which means I have just under 500 quid left in there.
It took them 130 days to return the money. This is their current average sell time, and it has been steadily lengthening all year. There is something seriously wrong there, so if you have any money there, take a good long look at your exposure. I have been withdrawing money from other P2P lenders this year too, and none of them have this problem at all. Takes a day or two. I'm exposed to Woodford too, and this has a weirdly similar feel to it.
The main problem for the collapse of the Woodford fund is investors all wanting their money out at the same time.....
As @Dippenhall says, the fund was invested heavily into illiquid assets & when redemptions came in other easily redeemable assets were sold.....making the problem even worse.
There was nothing inherently wrong with the fund, just that when everyone wants all their money out at the same time then there is not enough ready cash to go round. Just the same as a run on a bank.
But I distinctly remember that when i mentioned the fund, before it was frozen, you were rather pleased to inform us that you had bailed out yourself some time earlier.
Indeed I had......but that was more to do with performance rather than the underlying investments themselves. The reason why the fund has collapsed is because when investors wanted their money the fund did not have enough cash within it (which is not unusual) and therefore had to sell down assets. After a short while the more liquid assets had been exhausted & therefore the more illiquid assets had to be sold. As these seem to take some time to value & then sell, this made the fund fall even more in value.....thus exacerbating the problem.
Phew. Just managed to extract £2.5k out of Funding Circle, which means I have just under 500 quid left in there.
It took them 130 days to return the money. This is their current average sell time, and it has been steadily lengthening all year. There is something seriously wrong there, so if you have any money there, take a good long look at your exposure. I have been withdrawing money from other P2P lenders this year too, and none of them have this problem at all. Takes a day or two. I'm exposed to Woodford too, and this has a weirdly similar feel to it.
As the saying goes.......all that glitters is not gold. Best not to go chasing returns (P2P etc) just because cash isn't giving much by the way of return.
The main problem for the collapse of the Woodford fund is investors all wanting their money out at the same time.....
As @Dippenhall says, the fund was invested heavily into illiquid assets & when redemptions came in other easily redeemable assets were sold.....making the problem even worse.
There was nothing inherently wrong with the fund, just that when everyone wants all their money out at the same time then there is not enough ready cash to go round. Just the same as a run on a bank.
But I distinctly remember that when i mentioned the fund, before it was frozen, you were rather pleased to inform us that you had bailed out yourself some time earlier.
Indeed I had......but that was more to do with performance rather than the underlying investments themselves. The reason why the fund has collapsed is because when investors wanted their money the fund did not have enough cash within it (which is not unusual) and therefore had to sell down assets. After a short while the more liquid assets had been exhausted & therefore the more illiquid assets had to be sold. As these seem to take some time to value & then sell, this made the fund fall even more in value.....thus exacerbating the problem.
Well thats an interesting take on why Woodford failed. A lot of experienced commentators say the reason it failed was because it invested in a number of highly illiquid assets which should never have been in an open-ended fund in the first place. Such assets certainly never got near his Invesco portfolio.
Are you disagreeing with them and still asserting that "theres nothing wrong with the underlying assets"?
The main problem for the collapse of the Woodford fund is investors all wanting their money out at the same time.....
As @Dippenhall says, the fund was invested heavily into illiquid assets & when redemptions came in other easily redeemable assets were sold.....making the problem even worse.
There was nothing inherently wrong with the fund, just that when everyone wants all their money out at the same time then there is not enough ready cash to go round. Just the same as a run on a bank.
But I distinctly remember that when i mentioned the fund, before it was frozen, you were rather pleased to inform us that you had bailed out yourself some time earlier.
Indeed I had......but that was more to do with performance rather than the underlying investments themselves. The reason why the fund has collapsed is because when investors wanted their money the fund did not have enough cash within it (which is not unusual) and therefore had to sell down assets. After a short while the more liquid assets had been exhausted & therefore the more illiquid assets had to be sold. As these seem to take some time to value & then sell, this made the fund fall even more in value.....thus exacerbating the problem.
Well thats an interesting take on why Woodford failed. A lot of experienced commentators say the reason it failed was because it invested in a number of highly illiquid assets which should never have been in an open-ended fund in the first place. Such assets certainly never got near his Invesco portfolio.
Are you disagreeing with them and still asserting that "theres nothing wrong with the underlying assets"?
No, I was saying the reason why I got my client out of his funds 18 months ago was down to performance.
They did indeed. But I have no sympathy for the two "investors" that they highlighted losing money from his fund. They didnt say if they invested in any other funds as well, but the "elderly" lady seemed to have all her money in his fund......all on the advice of "friend" who did well from his funds previously (which I think maybe were the old Invesco funds). As I, and a few others have said repeatedly on here.......diversify, diversify, diversify. It wouldnt matter toooo much if you had just 5% of your portfolio in the Woodford fund.....anything more than that then you are taking too much of a risk, no matter what the fund.
And, just to clarify, a fund fact sheet is available & update monthly that shows which individual shares the fund is invested in. Usually just the top 20 shares by % of portfolio, but the information is out there if you want to look for it.
PS. One of the companies they said that Woodford invested in I had heard of as a client of mine works for them. I day a week for a cool £120k pa...!!
Seeking advice from the wise on behalf of my old Mum who has dementia and my brother and I are her POA.
She receives a comprehensive care package at home which costs circa 3K per month. Her income from state pension and benefits is about 1K per month.
We want to plug some of that 2K per month care funding gap with her cash savings (about 400K) but I am struggling.
Had one meeting with IFA who was very focused on IHT mitigation and suggested AIM based investments via Octopus type set up but the maths suggested that the fees to the product provider and adviser wiped out any gains and it was far from risk free. Target growth 4.1% but set up fees and annual fee to both adviser and product provider wipes out most of that.
Also looked into long term care bonds which seemed to be a joke in terms of price unless Mum lives to be about 180.
At the moment the cash is in premium bonds, NS&I index linked bonds and NS%I basic 1% savings account. Plus cash in bank earning 0.3%. Terrible I know but i cant see an obvious alternative. At 1% her cash savings only cover two months of care costs and the costs will go up.
Is there a low risk happy medium between 1% in the NS&I and high fees / high risk in order to get 4% if you're lucky?? Not looking for any magic just something more sensible than the bank
Any suggestions welcome and happy to pay for pro advice if required but always sceptical about schemes I can't fully understand or adminster myself.
Seeking advice from the wise on behalf of my old Mum who has dementia and my brother and I are her POA.
She receives a comprehensive care package at home which costs circa 3K per month. Her income from state pension and benefits is about 1K per month.
We want to plug some of that 2K per month care funding gap with her cash savings (about 400K) but I am struggling.
Had one meeting with IFA who was very focused on IHT mitigation and suggested AIM based investments via Octopus type set up but the maths suggested that the fees to the product provider and adviser wiped out any gains and it was far from risk free. Target growth 4.1% but set up fees and annual fee to both adviser and product provider wipes out most of that.
Also looked into long term care bonds which seemed to be a joke in terms of price unless Mum lives to be about 180.
At the moment the cash is in premium bonds, NS&I index linked bonds and NS%I basic 1% savings account. Plus cash in bank earning 0.3%. Terrible I know but i cant see an obvious alternative. At 1% her cash savings only cover two months of care costs and the costs will go up.
Is there a low risk happy medium between 1% in the NS&I and high fees / high risk in order to get 4% if you're lucky?? Not looking for any magic just something more sensible than the bank
Any suggestions welcome and happy to pay for pro advice if required but always sceptical about schemes I can't fully understand or adminster myself.
Thanks....
There is no single investment that will provide what you are presumably trying to achieve: Capital protection Liquidity Growth
I would expect an adviser to be suggesting how to split/diversify the savings to cover these three areas based on expectations and conflict between using up capital and preserving your potential inheritance. Tax I would have thought is secondary and a legal rather than investment issue.
i would insist on fee based advice for direct investments I control that are not “products”. Products are only justifiable if they give access to investments you really need, and cover a risk you are prepared to pay a premium for. If you can access the investments directly yourself you don’t need a “product” and again, don’t accept a commission generating investment, pay a fee for advice as and when needed.
You may not consider it to be worth the hassle for the slight increase in annual return but you can get 1.3 -1.5% interest with instant (easy ie when you want and need it) access to your money which is an improvement at least on the 0.3% for sure and probably the others.
If I pay a fee to be advised on direct investments, what is a reasonable fee and what is a reasonable expectation of return on that investment?
If a quality adviser charged me £150 per hour I would be satisfied. The adviser charge should bear no relationship to expected return. If he promises a return ask him if he will accept a fee payable only if you get the returns!
The investment fees will reflect how much effort goes into the management. If it is a computerised tracker of the market it should be a quarter of the fees compared to a manager who is selecting individual stocks and shares to beat the market. The chances of beating the market are close to 50;50 over time - see posts re Woodford fund.
The return you want is at least market returns, ie equity index for equities, bond index for bonds and bank rates for cash. If you want more you pay more and risk more - no free lunch and certainly no guarantees are out there.
Would it be worth putting a proportion of your mother's cash savings into a Fixed Account for, say 12 or 24 months?
The interest rates would be higher than with the instant access accounts but you should be sure that you won't need the cash you 'fix' in order to avoid early withdrawal penalties.
Seeking advice from the wise on behalf of my old Mum who has dementia and my brother and I are her POA.
She receives a comprehensive care package at home which costs circa 3K per month. Her income from state pension and benefits is about 1K per month.
We want to plug some of that 2K per month care funding gap with her cash savings (about 400K) but I am struggling.
Had one meeting with IFA who was very focused on IHT mitigation and suggested AIM based investments via Octopus type set up but the maths suggested that the fees to the product provider and adviser wiped out any gains and it was far from risk free. Target growth 4.1% but set up fees and annual fee to both adviser and product provider wipes out most of that.
Also looked into long term care bonds which seemed to be a joke in terms of price unless Mum lives to be about 180.
At the moment the cash is in premium bonds, NS&I index linked bonds and NS%I basic 1% savings account. Plus cash in bank earning 0.3%. Terrible I know but i cant see an obvious alternative. At 1% her cash savings only cover two months of care costs and the costs will go up.
Is there a low risk happy medium between 1% in the NS&I and high fees / high risk in order to get 4% if you're lucky?? Not looking for any magic just something more sensible than the bank
Any suggestions welcome and happy to pay for pro advice if required but always sceptical about schemes I can't fully understand or adminster myself.
Thanks....
There is no single investment that will provide what you are presumably trying to achieve: Capital protection Liquidity Growth
I would expect an adviser to be suggesting how to split/diversify the savings to cover these three areas based on expectations and conflict between using up capital and preserving your potential inheritance. Tax I would have thought is secondary and a legal rather than investment issue.
i would insist on fee based advice for direct investments I control that are not “products”. Products are only justifiable if they give access to investments you really need, and cover a risk you are prepared to pay a premium for. If you can access the investments directly yourself you don’t need a “product” and again, don’t accept a commission generating investment, pay a fee for advice as and when needed.
As @dippenhall says.......you should have a mix of investments. With-profit bonds could give you net 4% return after charges & then an income based Structured Poduct could do the same. Also a plain old vanilla Unit Trust /Oeic portfolio (in an ISA ?) could generate income too.
As an IFA I'm happy to discuss fees & charges with a client from the outset. Starting point is usually an initial 3%, but something like this that could negotiated down to a simple flat fee of £2k-£3k. In addition the ongoing fees for reviews etc would be 0.5%.
I cant see why over a 5-10 year period that taking 4%pa shouldn't leave the initial capital fairly well intact.
That's all very helpful. I didn't even know about the Kent Reliance . Think I need to book an appointment with a decent IFA when next in UK and have the cash properly invested.
That's all very helpful. I didn't even know about the Kent Reliance . Think I need to book an appointment with a decent IFA when next in UK and have the cash properly invested.
Many thanks indeed.
If you are comfortable managing your bank accounts on the web, then Marcus is an excellent instant access account. It has recently dropped its rate from 1.5% to 1.35%. However last night I moved some cash from my HSBC account to my Marcus account and could see it there within an hour.
Comments
Woodford Equity Income fund to be wound up
https://www.bbc.co.uk/news/business-50052945
I will have to look up the following to remind myself of the circs. but back in 2003, a fund called Exeter High Income collapsed. My mum had some money in it, on the advice of a mate of mine who was an IFA. (He is now neither an IFA nor a mate). As I recall, the FCA (or its predecessor) eventually intervened, and I think we got all her money back, albeit in stages. I remember at that time being very impressed with the way that process kicked in and that justice was served.
I will try to look up more details of that. It seems pretty relevant.
The Exeter collapse was covered because the fund was sold as low risk but was nothing of the sort, with a circle of incestuous loans to associated businesses.
Woodford sought high returns through picking a small number of stocks, using the Warren Buffet approach, for which he had built up a reputation. The Woodford collapse is due to illiquidity of the investments and inability to redeem the investments when his magic wore off and his chosen stocks nosedived and investors wanted out. The fund was high risk from the point of view of being 100% dependent on success from the skill of the manager in picking a small number of stocks. So was the reverse of what is recommended frequently on here to reduce risk (and potential returns) - diversification.
Compensation will likely rest on investors proving they had been mis-sold the fund by intermediaries and advisers, as distinct from Woodford doing anything wrong. I suspect HL are bricking it at the moment. Woodford turned out to be arrogant and over confident in his own ability, but that is not fraud or negligence. Luck plays a bigger part than skill in generating performance, and it's not always measured when selecting managers, and Woodford probably rode his luck for a long time.
As @Dippenhall says, the fund was invested heavily into illiquid assets & when redemptions came in other easily redeemable assets were sold.....making the problem even worse.
There was nothing inherently wrong with the fund, just that when everyone wants all their money out at the same time then there is not enough ready cash to go round. Just the same as a run on a bank.
Phew. Just managed to extract £2.5k out of Funding Circle, which means I have just under 500 quid left in there.
It took them 130 days to return the money. This is their current average sell time, and it has been steadily lengthening all year. There is something seriously wrong there, so if you have any money there, take a good long look at your exposure. I have been withdrawing money from other P2P lenders this year too, and none of them have this problem at all. Takes a day or two. I'm exposed to Woodford too, and this has a weirdly similar feel to it.
https://www.telegraph.co.uk/technology/2019/10/16/britains-booming-special-effects-industry-spotlight-dneg-considers/?fbclid=IwAR09H9BnIUT3DSz6yUKWr5QCTGuglLOIn_h2WpykkznYvlVJf5iAnCDXZ6Q
Are you disagreeing with them and still asserting that "theres nothing wrong with the underlying assets"?
And, just to clarify, a fund fact sheet is available & update monthly that shows which individual shares the fund is invested in. Usually just the top 20 shares by % of portfolio, but the information is out there if you want to look for it.
PS. One of the companies they said that Woodford invested in I had heard of as a client of mine works for them. I day a week for a cool £120k pa...!!
She receives a comprehensive care package at home which costs circa 3K per month. Her income from state pension and benefits is about 1K per month.
We want to plug some of that 2K per month care funding gap with her cash savings (about 400K) but I am struggling.
Had one meeting with IFA who was very focused on IHT mitigation and suggested AIM based investments via Octopus type set up but the maths suggested that the fees to the product provider and adviser wiped out any gains and it was far from risk free. Target growth 4.1% but set up fees and annual fee to both adviser and product provider wipes out most of that.
Also looked into long term care bonds which seemed to be a joke in terms of price unless Mum lives to be about 180.
At the moment the cash is in premium bonds, NS&I index linked bonds and NS%I basic 1% savings account. Plus cash in bank earning 0.3%. Terrible I know but i cant see an obvious alternative. At 1% her cash savings only cover two months of care costs and the costs will go up.
Is there a low risk happy medium between 1% in the NS&I and high fees / high risk in order to get 4% if you're lucky?? Not looking for any magic just something more sensible than the bank
Any suggestions welcome and happy to pay for pro advice if required but always sceptical about schemes I can't fully understand or adminster myself.
Thanks....
Capital protection
Liquidity
Growth
I would expect an adviser to be suggesting how to split/diversify the savings to cover these three areas based on expectations and conflict between using up capital and preserving your potential inheritance. Tax I would have thought is secondary and a legal rather than investment issue.
i would insist on fee based advice for direct investments I control that are not “products”. Products are only justifiable if they give access to investments you really need, and cover a risk you are prepared to pay a premium for. If you can access the investments directly yourself you don’t need a “product” and again, don’t accept a commission generating investment, pay a fee for advice as and when needed.
If I pay a fee to be advised on direct investments, what is a reasonable fee and what is a reasonable expectation of return on that investment?
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
You can get 1.43% with the Kent Reliance, provided that you keep a minimum of £1K in it, and withdraw as often as you like.
The interest rates would be higher than with the instant access accounts but you should be sure that you won't need the cash you 'fix' in order to avoid early withdrawal penalties.
As an IFA I'm happy to discuss fees & charges with a client from the outset. Starting point is usually an initial 3%, but something like this that could negotiated down to a simple flat fee of £2k-£3k. In addition the ongoing fees for reviews etc would be 0.5%.
I cant see why over a 5-10 year period that taking 4%pa shouldn't leave the initial capital fairly well intact.
Many thanks indeed.