Another BCP Bond

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oldtimer

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I received a phone call to-day from a lady at NIB advising me of a BCP Triple Growth Deposit Bond. 25% invested for 2 years at fixed interest of 12% and 75% invested in a 4 year Triple Growth Bond return capped at 48% (gross 10.3% CAR). Closing date next Friday 14th December. Now I have read previous threads about BCP plus comments from Clubman and Brendan and the message is beware. I asked the lady to e-mail the details and looking at the returns of other bonds including the quadruple ones they look impressive with returns averaging between 40%-50% (I know past performance etc etc). I also notice BCP ''finalists in the Moneymate and KMPG awards 2006 and 2007'' whatever that means. Would like any opinions on this Triple Growth Bond and BCP.
 
Well their Quadruple Growth Bond could never quadruple your money as claimed or insinuated as far as I know (try searching for Brendan's complaints about this) so maybe their Triple Growth is along similar lines?
 
I have a question about these bonds in general.

As far as I understand they work as follows:

1. John and Mary give their friendly advisor 10,000 euro.
2. The advisor takes 2 - 2.5% commission
3. The product provider takes 2 - 2.5% commission.
4. About 8,500 of John and Mary's money is put on deposit in the bank at 4 - 5% per annum which is enough to guarantee their 10,000 in 4 years time.
5. The balance is used to purchase a call option or some other financial instrument which will reflect the performance of the 'flavour of the month index'.
6. If that index does very well say, growing at 20% per annum, the product provider will skim 10% of this as a performance fee.
7. After 4 years John and Mary get their 10,000 back plus performance of the index subject to a cap.

My question is this..

How can John and Mary go about buying the option themselves? They could leave their own 8,500 in their own bank, risk their 1,500 euro, keep the commissions and receive the full performance of the index.

There must be a way of cutting out the middlemen.
 
Banks buy the equity option in large denominations-brokers may not be willing to deal in smaller denominations or with the general public-I think this issue was discussed here before.

John and Mary could of course leave €8500 on deposit and buy an ETF or unit linked fund with €1,500, but of course there is no guarantee that they get their €1,500 back.

Their may be other ways to replicate the performance, e.g. by shorting X and going long Y, but it's not immediately obvious to me.
 
Apologies - I'm new to this. How do I find Brendan's complaints as mentioned above. I am about to take the plunge with the so called "Triple Growth" bond and would like to know what Brendan had to say before I do.
 
Use the Search menu near the top right of the page and enter the words 'Quadruple Growth Bond'. The threads listed all contain these terms, and AFAICS the 9th through to the 15th thread listed are the ones you want, in reverse chronological order starting with .
 
OK I've read through Brendan's complaints. Correct me if I'm wrong but what he's saying is that the brochures produced by BCP are misleading and incorrect. Right so now that I know what the BCP offer actually is and is not and accept it for what it is, can anyone tell me is there another option to invest around 20k which is likely to give me the same or better return without the need to worry about it every day or manage it. Investing directy in the stock market may be an option (but not one I'm interested in) so aside from that what else is there that I can put my money into and forget about it for about 4-5 years.

I'm a complete financial illiterate so please excuse my questions.
 
As you are not interested in the stock market and can put 20k away for 5 years my suggestion would be to look at a 'term deposit account' with AIB. You can put away up to 25K for 5 years and there is reduced DIRT tax. You will get details on their website. The important things to remember are you can make just one lodgement and cannot withdraw for 5 years.
 
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