Help! I need investment advice!

[JandP]

Yes I know it seems a bit stange to look for financial advice on a caravan forum but there used to be a forum member who was some kind of financial guru and gave some very interesting information. He may not stil be around but I suspect that many of you are retired or have investments and you may have already solved the problems I now have.

I am trying to help an elderly relative who has sold her house and moved into a warden controlled council bungalow. She now has a substantial sum to invest to pay her day to day bills and build up a fund to pay care home fees in the future and has no idea how to invest it. We have now spoken to 3 financial advisers, one from her bank and 2 independant, and each one has recommended a "Whole of life insurance bond" which they claim will be ideal for her but I am not so sure. Apart from providing a nice fat commission for the adviser I cant see many advantages, there are extra charges (somebody has to pay the commission!) and it doesnt seem easy to get your money out. They claim tax benefits because of the life insurance function but even these seem to be a bit vague.

Has anybody any knowledge of these products? Are they any good? They lady is my cousin and has no experience of financial matters and will rely totally on me to advise her. This is a serious responsibility so I need to be sure we get it right and would welcome any comments you may have. Thanks, Jim.

 

[BeemerMal]

Jim....It would be wrong for anyone to advise on this situation without knowing all the facts because there are so many factors to consider and the different taxation involved needs careful consideration.

What I would say is that she does need very good financial planning advise and this should come from an Indipendant Financial Advisor (IFA) who will charge a set fee for his/her advise.

From my experiance many Financial Advisors don't charge a fee at all to the client because they get paid by the insurance company or financial institution that provide the policies etc. This then makes these IFAs far more interested in how much they will earn from the deal than whether it is the best deal for the client.

So when looking for a IFA use one that charges a set fee. In my experience they will give unbiased secure advise because:

A. They are being paid directly by your cousin.

B. They have nothing to gain by proposing one type of investment against any other.

Good luck, keep a close eye on her money....Mal

 

[parker1158]

Hi J&P

My wife and I have an array of investments in everything from ISAS, a substantial shares portfolio, property etc. We rely quite heavily from advice from the web site and forum of 'fool.co.uk'. I can heartily recommend joining and posting your query on there. There are some very knowledgeable people on their forum. Oh and I think the member you refer to is possibly Clive V I don't believe he's around at the moment.

 

[JandP]

Jim....It would be wrong for anyone to advise on this situation without knowing all the facts because there are so many factors to consider and the different taxation involved needs careful consideration.

What I would say is that she does need very good financial planning advise and this should come from an Indipendant Financial Advisor (IFA) who will charge a set fee for his/her advise.

From my experiance many Financial Advisors don't charge a fee at all to the client because they get paid by the insurance company or financial institution that provide the policies etc. This then makes these IFAs far more interested in how much they will earn from the deal than whether it is the best deal for the client.

So when looking for a IFA use one that charges a set fee. In my experience they will give unbiased secure advise because:

A. They are being paid directly by your cousin.

B. They have nothing to gain by proposing one type of investment against any other.

Good luck, keep a close eye on her money....Mal

Thanks Mal, I was coming to that conclusion myself. With IFA fees of perhaps

 

[JandP]

Hi J&P

My wife and I have an array of investments in everything from ISAS, a substantial shares portfolio, property etc. We rely quite heavily from advice from the web site and forum of 'fool.co.uk'. I can heartily recommend joining and posting your query on there. There are some very knowledgeable people on their forum. Oh and I think the member you refer to is possibly Clive V I don't believe he's around at the moment.

Thanks for the tip Martyn, I'll have a look. Jim

 

[BeemerMal]

Jim....Shop around for IFA fees.

 

[colin(bridgend)]

Jim if I may be allowed to digress slightly - you made mention in your initial posting of your relative will need the money for "...... paying for her care home....." The Daily Mail some while ago printed an article regarding the change in the law in 1999 whereby should a person be requiring care attention then the local authority meets the bill. The indivdiual pays in residential homes. When my late mother required constant nursing care in 2003 the hospital doctor and Social Services said that she should enter a residential home (these homes do NOT have nursing facilities). I objected to this as she could not walk, was incontinent and not fully capable of feeding herself. However she was of sound mind. I fought the system and said that until they changed their opinion to nursing care I would leave her in hospital and bed block if necessary. I was not concerned regarding the financial side but for my mother's needs and nursing attention. They eventually changed their findings and reassessed her as nursing care. The Neath Port Talbot CBC paid the nursing home fees after first having her pension, etc. The paper said that although the law had been changed it was not publicised and a lot of residential care senior citizens should be receiving nursing care - purely a means of saving money for the rate (council tax) payers. An elderly person has more than likely worked all their life, payed their taxes and are still penalised at old age when they should be shown some respect from society and given the care they justly deserve.

 

[JandP]

Thanks Colin, I suppose I should have said residential home because the lady is fit enough to look after herself at the moment but its an interesting point that you have raised. Since I have been helping her I have learned a lot about the assessment procedure for payment of fees but I hadnt considered the difference between residential homes and care homes.

The lady is 79 and in reasonable health but we are concerned for her future. She never married and has no children or other close relatives to look after her so we think it is important for her to build up as large a pot of money as possible so she can have a comfortable old age rather than rely on the local council to provide basic care. Her only close relatives are in America and most of them have never seen her so inheritance is not a major issue. Jim

 

[JeremyClarksson]

Have a look at the FAQs on the BBC2 Programme "Working Lunch" website or even send them the question, they are very good and you know you are getting pretty much unbiassed advice.

http://news.bbc.co.uk/1/programmes/working_lunch/default.stm