# Acorn life experiences



## richieg (1 Apr 2008)

Does anyone have any experience of dealing with the above. I have been talking to them about savings schemes for my kids?
They are talking about a growth policy spreading 20% in bonds/cash & 80% in equities/property.
Charges are 0.5% p/a with spread charges which I am not sure about

How have their funds performed and what is the spread charges?
Would you advise going with them or somewhere else?


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## ubiquitous (1 Apr 2008)

They are notorious for high charges and pushy sales tactics. Use only as a last resort.


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## Brendan Burgess (1 Apr 2008)

I agree with Ubi.

They have a very complicated charging system which means that most of your first two years' contributions go in charges. 

If you stay invested for 20 years, they might be good value. But most people's investment plans change every few years.

brendan


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## camel (1 Apr 2008)

I put in about 10000 euros into a policy with them about 8 years ago. It's now worth less. Granted the timing was awful with the dot-com bust, but in fairness that doesn't excuse not even being able to track indices.


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## ClubMan (2 Apr 2008)

Was it an index tracker?


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## camel (2 Apr 2008)

No it wasn't, it was a with-profits.


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## F. Kruger (2 Apr 2008)

richieg said:


> Charges are 0.5% p/a with spread charges which I am not sure about


 
If you don't understand it, don't buy it!

Ask the following questions, and request that the reply is in writing:

1. Is there a nil allocation period - ie. at what stage is your contribution actually buying units in the fund and how much of your contribution goes to buy these units
2. Is there life insurance on the policy - if so how much does it cost
3. What is the policy fee
4. What are the annual management charges on the various funds available to you
5. Is there a bid/offer spread on buying/selling units

Have you received a 'disclosure quote' from them based on a specified contribution per month/year? This will give you an indication of the effect of charges on the plan.


camel,

Are you positive it was 'with-profits'?


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## ClubMan (2 Apr 2008)

camel said:


> No it wasn't, it was a with-profits.


Well then comparing it to an index tracker makes no sense. And _WP _funds are notoriously difficult to value or assess in terms of the impact of charges. For example the surrender value of your fund would be worth less than the original amount because (a) charges were high (b) the surrender value involves the deduction of an _MVA _(c) the surrender value does not include bonuses only paid on maturity etc. etc.


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## camel (2 Apr 2008)

ClubMan. I wasn't comparing with-profits policy with an index tracker. I suppose the reason I brought up an index tracker is that that's the minimum I performance I would expect when investing in any fund now. Back when I bought the policy I hadn't a clue what I was buying.
And the reason I say the surrender value is now less than what I bought it for was to point out that this is my experience of Acorn products....bad.


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## ClubMan (2 Apr 2008)

camel said:


> ClubMan. I wasn't comparing with-profits policy with an index tracker.


Eh?


camel said:


> I put in about 10000 euros into a policy with them about 8 years ago. It's now worth less. Granted the timing was awful with the dot-com bust, but in fairness that doesn't excuse not even being able to track indices.


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## z106 (2 Apr 2008)

camel said:


> ClubMan. I wasn't comparing with-profits policy with an index tracker. I suppose the reason I brought up an index tracker is that that's the minimum I performance I would expect when investing in any fund now.


 
I agree.

At the very least, these professionaly managed funds manged by 'experts' should perform as well as an index tracker.

If not, then what expertise are they actually bringing to the table ?


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## LDFerguson (2 Apr 2008)

qwertyuiop said:


> At the very least, these professionaly managed funds manged by 'experts' should perform as well as an index tracker.
> 
> If not, then what expertise are they actually bringing to the table ?


 
Not comparing apples with apples.  A With Profit fund is designed to be a lower-risk fund than an index-tracking equity fund, which is higher risk.  Lower risk = lower potential return.  It is only to be expected that a With Profit fund will underperform an index-tracker.  (What index are we tracking by the way?)    

Not saying camel's Acorn Life policy was any good, by the way - any that I've seen have featured high charges to the extent that any positive fund performance was practically smothered by the charges anyway.


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## ClubMan (2 Apr 2008)

qwertyuiop said:


> At the very least, these professionaly managed funds manged by 'experts' should perform as well as an index tracker.
> 
> If not, then what expertise are they actually bringing to the table ?


As _Liam _says - comparing a _WP _fund with an index tracker or managed fund is arguably meaningless. Different horses for different courses.


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## z106 (2 Apr 2008)

LDFerguson said:


> Not comparing apples with apples. A With Profit fund is designed to be a lower-risk fund than an index-tracking equity fund, which is higher risk. Lower risk = lower potential return. It is only to be expected that a With Profit fund will underperform an index-tracker. (What index are we tracking by the way?)


 
Fair enough - I stand corrected.


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## camel (2 Apr 2008)

That does make sense. I retract the comment that I'd expect the WP fund to perform as well as an index tracker. And re-phrase:

At the time I didn't know what I was buying (as I just wanted to put money somewhere and forget about it and concentrate on enjoying a year in Oz!!...financially nieve). At a very high level I would expect a 'fund', of whatever form, to have more value when redeeming than I bought it for. With this fund that I have it's not currently the case after something like 8 years, and so I would say...stay away from Acorn to the OP.


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## ClubMan (2 Apr 2008)

camel said:


> At the time I didn't know what I was buying (as I just wanted to put money somewhere and forget about it and concentrate on enjoying a year in Oz!!...financially nieve). At a very high level I would expect a 'fund', of whatever form, to have more value when redeeming than I bought it for.


That is indeed very naive. You really should have sought independent advice if you didn't know what you were doing.


> With this fund that I have it's not currently the case after something like 8 years, and so I would say...stay away from Acorn to the OP.


As I said above if it's a _WP _fund then the current surrender value may reflect an early encashment _MVA _penalty, not include terminal/maturity bonuses etc. so it may be difficult to say with accuracy what it is worth at the moment other than if you cash it in before maturity.


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## camel (2 Apr 2008)

ClubMan said:


> That is indeed very naive. You really should have sought independent advice if you didn't know what you were doing.



I agree! But show me a 23 year old with 10 grand to spend in 1 week though who would sit down rationally and seek independent financial advice. To me back then Mr.Acorn = Mr. Independent Advice.



ClubMan said:


> As I said above if it's a _WP _fund then the current surrender value may reflect an early encashment _MVA _penalty, not include terminal/maturity bonuses etc. so it may be difficult to say with accuracy what it is worth at the moment other than if you cash it in before maturity.



Cool. I hope so. It matures in 2 years I think. Why doesn't it state this on the statement?


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## F. Kruger (3 Apr 2008)

camel said:


> Why doesn't it state this on the statement?


 
I don't think it is a with-profit bond. I can't recall HSBC or Acorn having a with-profit product.

If it was a WP Bond, the nominal value should be in poisitive territory at this stage. (MVAs excluded).


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## camel (3 Apr 2008)

Sorry, maybe I'm talking through my hat! I've a few funds on the go, maybe I'm mixing up companies. I'll try the hunt down the latest statements I have and post back.

Edit: By the way, regardless of whether or not I've got the policy type wrong, the value as of a few months ago (about 8500 euros) is still less than the original investment (7000 Irish Pounds). Although I accept that maybe there are early encashment charges built into the current surrender value as suggested by ClubMan. Will have to investigate further.


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## ClubMan (3 Apr 2008)

camel said:


> Edit: By the way, regardless of whether or not I've got the policy type wrong, the value as of a few months ago (about 8500 euros) is still less than the original investment (7000 Irish Pounds).


So (a) as suggested above it may not be a WP fund at all and (b) unless it's some sort of guaranteed fund the possibility of the surrender value being less than the amount invested may simply be an characteristic of the investment especially depending on things like charges, what exactly it's invested in etc.


> Although I accept that maybe there are early encashment charges built into the current surrender value as suggested by ClubMan. Will have to investigate further.


Indeed - it saves other posters' time and helps to avoid confusion if the information posted is accurate.


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## camel (4 Apr 2008)

Apologies to Acorn. The policy is a bond and is now worth just over 9 grand, I was quoting a year old statement. Still not a good performance.


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## ClubMan (4 Apr 2008)

It's always possible that performance is OK but the charges are hefty. It's really difficult to comment meaningfully if people don't post accurate or complete info.


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## ninsaga (24 Oct 2008)

Just came across this thread while doing a search. 

I think I'll echo most of the comments above - but perhaps a little stronger. I would not only advise people not to go with Acorn Life.... I would actually give people a *warning* to stay away well from them. I've been quite happy to share my experiences with family, collegues, friends all along. I have had a running dispute with them now for a number of years & have got zero satisfaction from them. 

The blew about 25% of my contributions over the last 10yrs. Part poor performance was blamed upon the post 9/11 downturn.... however in the following boom period, the fund continued to perform badly...... so.....

- the fund value was below what was invested during boom times.... but they 'did not track the market' - that's their quote by the way.
- but now that the markets are down then more money was wiped off... 

so in good times it lost money, in bad times it lost more money.... make sense!

Avoid them like the plague........ 

ninsaga


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## CageyMoney (1 Dec 2008)

Had my SSIA with them and got 25K. Much cheaper for life assurance too, 45eur per month less than ArkLife. Haven't got pension details though.


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