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Stanley Gage
Posted: 09 September 2010 12:33:27(UTC)
#1

Joined: 04/09/2010(UTC)
Posts: 3
I would welcome advice from anyone who has experience with plans such as Investec FTSE 100 Bonus Income Plan 10 which currently offers 6.50% pa and full capital return provided the FTSE stay above 50% of its starting level. My intention would be to hold this and similar derivatives in a SIPP to provide a regular income.

Thanks
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Chairman2
Posted: 09 September 2010 16:14:19(UTC)
#2

Joined: 26/06/2009(UTC)
Posts: 11
structured products such as this have been a very expensive way to invest.

they pay tax, when you dont in a SIPP - which seems like a bad idea.

The return is superficially attractive

but if there were to be a market crash your capital would be very exposed
at exactly the time when every other investment you own would be looking
very sick.

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SP
Posted: 09 September 2010 18:23:33(UTC)
#3

Joined: 18/06/2010(UTC)
Posts: 3
Structures appear to have a downside protection (normally set at 50%) which OEICs don't offer in the main... I would seriously look at the counterparty risk first rather than the coupon available.
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Stanley Gage
Posted: 09 September 2010 18:46:23(UTC)
#4

Joined: 04/09/2010(UTC)
Posts: 3
Thank you for your responses and could I just confirm that the counterparty risk you mention is the supporting financial institution.
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SP
Posted: 09 September 2010 19:00:02(UTC)
#5

Joined: 18/06/2010(UTC)
Posts: 3
Some companies sometimes use themselves as counterparty (barclays, investec as examples), however there are those who select another company as the counterparty (Meteor, Gilliat... may use the likes of Lloyds or Rabobank)... as examples. These types of plans tend to change / get updated on a regular basis, so best to wait until you think you have the best coupon and counterparty. In all cases you need to speak to an adviser, and preferably an independent one.
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Stanley Gage
Posted: 09 September 2010 19:22:46(UTC)
#6

Joined: 04/09/2010(UTC)
Posts: 3
Thanks very much for your sound advice
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SP
Posted: 09 September 2010 19:55:24(UTC)
#7

Joined: 18/06/2010(UTC)
Posts: 3
not a problem..... let me know if you would like a selection of independent advisers to choose from and i can provide you with some in your local area.

hope all works out
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