# 250k to invest - where should I put it?



## shilling (25 Aug 2009)

A relative has 250k to invest. She is a retired pensioner and has received professional advice in relation to investing the funds as follows:

Option 1 - Invest in an Evergreen Fund (no return guaranteed) with BOI or bank the money on deposit.
Option 2 - to invest some of the value in an Energy Fund and some in a Hydro Fund and place the remainder on deposit.

Any further advice/suggestion appreciated


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## Senorito (26 Aug 2009)

Put the money in a high interest account. Then spend the next 4 to 6 months reading books and researching what you have read. You are less likely then to make a mistake and you are relying on your own judgement and not that of anyone else. You would be surprised what you could learn in 6 months if you applied yourself. OPnce happy you then pick and choose where you want to invest and what financial instruments you prefer to use

This is not meant to be a smart answer, it really is the reality of it. 6 months study of both books and market conditions would make you more proficient than the large majority of advisors out there. I'd sooner be in that position than taking anyone's word for it.


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## Chris (26 Aug 2009)

If she is going to be reliant on income from the investment then she should be looking at cash and bonds. Best thing for her to do is get truly independent investment advice; that means by someone you pay and who doesn't earn a penny from commissions.


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## Rory Gillen (26 Aug 2009)

shilling said:


> A relative has 250k to invest. She is a retired pensioner and has received professional advice in relation to investing the funds as follows:
> 
> Option 1 - Invest in an Evergreen Fund (no return guaranteed) with BOI or bank the money on deposit.
> Option 2 - to invest some of the value in an Energy Fund and some in a Hydro Fund and place the remainder on deposit.
> ...


 
You have asked an open-ended question that probably cannot be, and should not be, answered on this site. The key is what your retired relative is looking for. You can assist her by getting clarity on that issue and then attending any meeting she might have with an adivisor. And ask if that advisor is 'independent' and the way to find that out is to ask who is paying the advisor - if it is not your relative, then you do not have an independent advisor.


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## North Star (27 Aug 2009)

Shilling; Did your relative get this professional advice from a bank? I ask this because as you say the Evergreen fund is a BOI product. BOI through New Ireland also have an "Alternative Energy" and "Water" fund sound very similar to Energy and Hydro fund you mention. BOI as indeed are all banks are also actively looking to grow their deposit base.
I ask this because your relative as a retired pensioner may well be a more vulnerable investor; i.e less familiar with the terminology, more susceptible to a pressure sales pitch and also her financial health could be disproportionatly affected if the advice/sales pitch is unsuitable for her needs. 
If she has got this advice from BOI, then they have simply offered her a range of BOI products. If this is the case then this is not advice it is a sales pitch.
 We cant realy blame BOI or the other banks. They are in a concerted drive to rebuild their profitability. This combined with the lack of foreign competition means that consumers should be exceptionally sceptical when dealing with bank "advice".
Despite what has happened to the banks many consumers either a) trust the advice given by the bank or b) go along with what the bank suggests, for fear of their credit position being affected.
I agree with Chris and Rory's posts, the best thing you can do to help this relative is to search for a suitably qualified adviser who is fee based, and ensure that your relative is supported at any meeting with that adviser. AAM has many posts on selecting or recommending advisers which you may wish to research.
You are doing the right thing in looking after your relatives best interests. Good luck with your search.
Vincent Digby


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## firewire (27 Aug 2009)

Spread over a different sectors: Technology, Bio-Medical, Banking, Energy etc...

There is no sure safe place to put it. Look for companies that has good earning potential and cash reserves. One such is apple inc. They have $30B in cash, no depths, have beat all guidance over the past two years, seem to be recession proof, have new iPods being announced in about 2 weeks, have an updated operating system launching tomorrow, and possibly will have a tablet mac announced (or launched) within the next 3-6 months.

BOI are doing OK at the moment, but I am unsure where they will be in a few weeks. It all depends how NAMA goes.


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## sam h (28 Aug 2009)

firewire said:


> Spread over a different sectors: Technology, Bio-Medical, Banking, Energy etc...
> 
> There is no sure safe place to put it. Look for companies that has good earning potential and cash reserves. One such is apple inc. They have $30B in cash, no depths, have beat all guidance over the past two years, seem to be recession proof, have new iPods being announced in about 2 weeks, have an updated operating system launching tomorrow, and possibly will have a tablet mac announced (or launched) within the next 3-6 months.
> 
> BOI are doing OK at the moment, but I am unsure where they will be in a few weeks. It all depends how NAMA goes.


 
Firewire - I don't believe AAM allows advising about individual companies people should invest in - you may be right (happy days)...you may be wrong (bad days).  You advise about diversifying your portfolio and researching company/industry dynamics seems like good advise.  

(by the way, one of the companies you mentioned has apparently been having an issue with a key product which has been spontaniously combusting, which may affect the price)


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## Rois (28 Aug 2009)

Is she reliant on this money to provide for income now or in the near future ?

Might she need it to pay for nursing home/medical care in the near-medium term future? 

How long is she willing to invest for i.e. would she need access to this money in a crisis situation?


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## mercman (28 Aug 2009)

firewire said:


> There is no sure safe place to put it.



This may be correct but equally there is one sure place not to put it -- in the funds you have suggested. There is enough threads on AAM about the Evergreen fund and the funds of New Ireland and BoI to ensure that your relative should look elsewhere to invest the money.

Accordingly, if the relative is a Pensioner, would they not be best holding on to the Cash rather then giving themselves heartache and headaches.


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## Raskolnikov (28 Aug 2009)

shilling said:


> A relative has 250k to invest. She is a retired pensioner and has received professional advice in relation to investing the funds as follows:
> 
> Option 1 - Invest in an Evergreen Fund (no return guaranteed) with BOI or bank the money on deposit.
> Option 2 - to invest some of the value in an Energy Fund and some in a Hydro Fund and place the remainder on deposit.
> ...


That is absolutely shocking advice. Infact, it's so bad that if a relative of mine had recieved it; I would complain to the financial regulator about a product being blatantly mis-sold.


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## mercman (28 Aug 2009)

Raskolnikov said:


> Infact, it's so bad that if a relative of mine had recieved it; I would complain to the financial regulator about a product being blatantly mis-sold.



You mean complain to the Financial Services Ombudsman as well. And this should be done as the Financial Investment Industry is a complete mess, with a free for all for those unscrupulous sales people and Financial Providers that simply do not give a damn.


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## bsloe (28 Aug 2009)

Raskolnikov said:


> That is absolutely shocking advice. Infact, it's so bad that if a relative of mine had recieved it; I would complain to the financial regulator about a product being blatantly mis-sold.




I totally agree with Ras - cannot belive that someone would recommened such risky funds to a pensioner....

Shilling - can you advise if it was BOI who recommended this funds? I agree with other posters, get fee based independent advice that covers more than 2 risky irish funds....


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## ringledman (28 Aug 2009)

Raskolnikov said:


> That is absolutely shocking advice. Infact, it's so bad that if a relative of mine had recieved it; I would complain to the financial regulator about a product being blatantly mis-sold.


 

Yes its unbelievable. Financial advisors are generally so poor at giving advise. 

Your relative should stick to fixed income for her age. If she still wan't to invest in stocks then it should be conservative blue chip high yield income producing shares / funds with low management fees. 

This in itself comes with capital and dividend risk.

To give advise to invest predominently in the high risk and high volility energy & water sector to a pensioner is truely shocking.


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## dockingtrade (28 Aug 2009)

i wonder what the fees would be


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## North Star (28 Aug 2009)

Guys check my earlier post, we havent got an answer form Shilling if the profesional advice came from a bank "adviser" who is in affect a tied agent/salesperson


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## Friday (28 Aug 2009)

The term pensioner does not necessarily mean she is in penury. Maybe the advisor knows something we don't about her circumstances.


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## mercman (28 Aug 2009)

Friday said:


> The term pensioner does not necessarily mean she is in penury.



This is a daft statement. The world and their wives know that the Evergreen fund is one to steer well away from, especially if the Investor is a Pensioner. Why would anybody offer credible advice of investing in a fund which is mainly invested in Ireland where the short term outlook remains bleak.


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## noel 2006 (28 Aug 2009)

Savings certs or bonds from An Post are worth considering.  They are straight forward, state guaranteed and tax free.


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## round1 (28 Aug 2009)

I would look at  An Post Saving Bonds and Saving Certs. Fully secure and no Dirt payable on interest. Maturation terms are 3 and 5.5 years respectively so may not be suitable for regular income.


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## shilling (28 Aug 2009)

Thanks for all the replies. I should have mentioned before that she is not dependent on this money. She was given advise by Bank of Ireland & I shall pass on your comments to her regarding the advice she received.

It was also suggested to her to put money in a 2 yr deposit account at 7%, where you can access up to 50% of the funds if required.

I will recommend that she go & see someone independent.


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## mercman (28 Aug 2009)

Please make sure she seeks advice were she may choose to pay for the advice rather than the advisor earning commission. And the Banks ?? Just look at the mess they have made of their own business. Why oh why would or should anybody think they will look after the customer  money any better.


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## North Star (29 Aug 2009)

Hi Shilling glad we got to the bottom of that. 
I have had that experience with lots of clients who previously trusted the bank despite lots of evidence  similar to what you have provided i.e the bank tries to flog them one of their products irrespective of suitability or there being much better third party alternative. Good luck with your search
kind regards Vincent Digby


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## ringledman (29 Aug 2009)

North Star said:


> Hi Shilling glad we got to the bottom of that.
> I have had that experience with lots of clients who previously trusted the bank despite lots of evidence similar to what you have provided i.e the bank tries to flog them one of their products irrespective of suitability or there being much better third party alternative. Good luck with your search
> kind regards Vincent Digby


 
Out of interest what percentage of a financial advisor's income comes from the financial providers and how much from individual's paying a fee for totally independent advise? 

I would guess it is heavily skewed to the former. 

So called independent financial advisors are not that independent when they get a huge return for selling high fee products from providers that apparently to the client they have no links to. I bet a lot of clients would be shocked if they learnt about the full fees that are earned by FAs, long after the so called independent product is sold.

This is my problem with financial advisors (whether independent or working for a bank) that they have far too many vested interests in what they can earn from the financial providers. Its a huge scam. 

I also have a problem with financial advisors thinking they are being conservative by selling you yesterday's investments. i.e. the things that have risen greatly already. They seem to love past performance as it can cover their ass should the asset tank down (which is often the case for things that have risen greatly in the past).

My pension advisor in 2006 said too be in 80% commercial property at 27yo. He never once mentioned the extremely low yields applicable at the time which mean't that commercial property was hugely overvalued and about to crash. I am glad I didn't take that advise.

How many financial advisors would recommend 10% in gold at the moment? Very few no doubt. Or a decent allocation to the future growth markets of Asia & Brazil? Few again no doubt. Stick to the 60/40 equity/bond split and you should be ok...hmmm... 

The best financial advisor is yourself. The professionals rarely know much more than a well read individual who reads from a number of independent and contrarian sources.


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## ringledman (29 Aug 2009)

..


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## Rory Gillen (29 Aug 2009)

shilling said:


> A relative has 250k to invest. She is a retired pensioner and has received professional advice in relation to investing the funds as follows:
> 
> Option 1 - Invest in an Evergreen Fund (no return guaranteed) with BOI or bank the money on deposit.
> Option 2 - to invest some of the value in an Energy Fund and some in a Hydro Fund and place the remainder on deposit.
> ...


 
I believe North Star (Vincent Digby) is an independent financial advisor. I have met Vincent and I think you would be in good hands with him, perhaps you should email him separately.

Rory


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## North Star (29 Aug 2009)

Ringledman- there are two sides to that story. As an Authorised Adviser I run a fee based advice service. The initial research/fact find/ market  review is always fee based. When it come to transactions I offer clients the option of a) fee based proposal or b) transparent commission related terms.
I would prefer to have a fee only based model but clients seem to dislike direct payment for products even when its in their best interests. I have to offer the client the choice, because thats what the clients want.
If people across the country demanded a fee based service I would be delighted but what people say and what they actually do is sometimes different.

As to expertise or lack therof: I can only  state my own credentials of 20 years fromt line Capital Markets experience. There are other well qualified experienced advisers out there who will work in the clients best interests and whose quality I can vouch for.
Unfortunately there is no real mechanism to help individuals find these advisers. The AA, MAI or tied agent means little to the general populace.
As far as I know there is no listing for fee only financial advisers. Please correct me if I am mistaken. Perhaps AAM may have a potential role here?
For anyone reading this is there a demand to have a list of fee based Authorised Advisers available on AAM?
If there is perhaps we can raise it with Brendan or other moderators.
Regards Vincent Digby


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## Rory Gillen (29 Aug 2009)

You got an independent financial advisor on this site - You should email North Star separately. 

Rory


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