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Whats the best thing to do

Discussion in 'General Investing Discussion' started by zoila, 24th Mar, 2008.

  1. zoila

    zoila Member

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    Ok I am a person who made a big mistake. After a divorce with hubby had some money after settlement. Not wanting to waste the money and while going back to school for the next 3yrs wanted to put the money somewhere safe until I could get a loan for a house. It was sugested by my bank to go see their finance advisor which i did bigest mistake I ever made. He sugested instead of a term deposit that I place the money in managed funds. I told him my conern in losing the money as it was all the money I had in the world for me and my two children. He assured me that I would never lose my inital money that it was the only the interest it generated that would be at risk so I followed his advice. Now my question is a year later not only have I not made any interest I have also lost $5000 of my inital money. an oportunity has come up for me to buy a house and when I rang about retrieving the money was greeted with this news. My adviser has been very impatient with me and wont explain anything and seems to get cranky when I ask whats happening as I know little about all of this. The mistake is mine I should of researched properly before entering into this, but now with no idea what effects lay ahead I am trying to decide is it beter to take my $5000 loss and take my money out now go a head with buying the house? or do I wait hoping the money will go back up? the advisor seems to think if I wait the 3yrs as planed it will all be fine but I am scared of losing it all. (not to mention have little faith in him now) can anyone give me their opinion. thanks

    Zoila
     
  2. AsxBroker

    AsxBroker Well-Known Member

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    Hi Zoila,

    I'm glad it's not a planner who works for the same bank I do (we don't have any branches in WA).

    Did the planner give you a Statement of Advice (SoA)? If so, read it cover to cover.

    Did the planner give you a Financial Services Guide (FSG)? If so, read the back under complaints resolution. It sounds like you've already tried the first part of contacting your adviser but he doesn't seem to care about you. The next step in the FSG is to write to the Compliance department of the bank. They have 30 days to write back to you. If you are still not happy you can speak to Financial Industry Complaints Scheme (FICS) to which the member is bound but you are not.

    Both the SoA and FSG should have been provided to you by the planner as this is a legal requirement.

    BTW what managed fund did the planner put you into?

    Cheers,

    Dan
     
  3. crc_error

    crc_error The Rule of 72

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    Managed funds can go up and down in value... and if you indicated your time frame was 3-5 years, then he would most likely put the money something outside term deposits.

    If you indicated to him you wanted the money at call, and can use it any times, then shares should not have been selected.

    Should you take a $5000 loss? $5000 out of how much? $200,000?

    In buying a house, I don't think $5000 is much money in the transaction.. so if the house is such a good deal, then take the loss.
     
  4. The Stig

    The Stig Well-Known Member

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    Sounds like he put you in something capital protected if he promised you it wont lose any capital.
     
  5. zoila

    zoila Member

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    Hi guys, thanks for the replies all information is appreciated, and thanks for the details in loging a complaint about my advisor which i wanted to do just wasnt sure how to go about it. I feel like he has treated me like an annoying child which is agrivating considering I trusted him.

    I have lost $5000 of my 75,000, which i know it wasnt a great deal of money only to me it was. I went through ANZ and the manage funds are one awnser in ing plus. By taking my money out now I also lose 3% on what ever amount I take out. He did explain that to me but as i knew i had 3yrs of study left to do i didnt see my self being able to get a house in that time so I thought it was fine. I didnt realise though I would lose an additional $5000 on top, and though I can pass on this oportunity that is come my way to by a house now, i am scared that if I wait the 3yrs I will have lost more then the $5000 so I find it very hard to know what decision is best. Understanding little about it all. I can still go a head with the house even after the loss, but it leaves me with very little buffer in the way of savings.
    though a large part of me tells me its worth it. I guess what I am wondering is what are my chances of makeing that $5000 back if I wait? thanks

    zoila
     
  6. The Stig

    The Stig Well-Known Member

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    So the fund is called "One Answer" and it is in ING Plus??
     
  7. zoila

    zoila Member

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    yes

    thanks Zoila
     
  8. The Stig

    The Stig Well-Known Member

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    I just googled it.
    One Answer is their platform. What funds are you in?

    Is there anyway that you can leave the investment alone and use ING or ANZ to borrow all the money you need?
     
  9. zoila

    zoila Member

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    No not really. ANZ or Ing woudnt be able to lend me the amount i need as I am on a single parent pension. The only reason I have been able to get a loan (which i thought would ofhad no chance before now) is one the money I am puting in and two I am going halfs with an extremely good friend. (someone I have known since we were 11 and were roommates before I got married and for the last year year since the seperation and yep we are having contracts legaly drawn up between us) I need the money to go towards the house and pay the extra that I couldnt loan. I can give up this oportunity but what really concerns me is that will i have lost more of the 75000 in the three years. I cant see myself being able to go longer then the 3 years possable 5 but as things stand at the moment. rentals are harder to get especialy being a single parent I get knocked back a lot. not to mention I am currently paying $400 a week in rent for a small place. much rather have that money going into my own home. But I could wait the 3yrs keep renting but I am nervous that the money wont make a recovery in that time. to my knowlege the funds are in the ING plus.

    Thanks

    Zoila
     
  10. The Stig

    The Stig Well-Known Member

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  11. zoila

    zoila Member

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    yes thats it.

    Zoila
     
  12. The Stig

    The Stig Well-Known Member

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    Taken from the PDS....
    Performance to 31 August 2003*
    1 year 3 years p.a. 5 years p.a.
    Distribution 5.94% 7.03% 6.60%
    Growth 0.56% -0.89% 0.29%
    Total 6.50% 6.14% 6.89%

    What was the performance for the last 5 years with this fund?

    I would hope it is a lot better than above. Otherwise term deposits with ING would have performed better I suspect.
     
  13. Glebe

    Glebe Well-Known Member

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    My advise would be to get your money out ASAP because Zoila I don't think you have the mindset required to "roll with the punches" of the sharemarket. The sharemarket can be rewarding, but it can be very stressful and risky if it doesn't suit you. I love the thought of owning small portions of the world's best companies, but it certainly isn't for everyone.
     
  14. TryHard

    TryHard Well-Known Member

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    Opportunities

    Hi Zoila

    No one likes to lose money but everything happens for a reason. Consider the opportunities you might lose by NOT taking up this chance to get into property :

    1. Security for you and the kids
    2. No reliance on landlord's whims etc.
    3. An asset for future borrowing and for passing on to the children
    4. Something to borrow against later if you ever decide on shares (hopefully with a better understanding of what they are offering you) or more property
    5. There's not going to be any bargain rental rates out there in the near future

    There are far worse horror stories out there compared to a loss of $5k from $75k and maybe this is just a necessary step in the longer journey.

    If you're comfortable with your choice of financial partner in the purchase and you both independently get legal advice/contract to cover the unforeseen things that 'might' happen, hopefully you'll look back on the property investment with fonder memories than this foray into shares :)

    Best of luck
    Carl
     
  15. zoila

    zoila Member

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    Thanks guys for all your advice I appreciate it, it helped me make up my mind. I have decided to take my money out and go with the house. Thanks very much.

    Zoila
     
  16. Billv

    Billv Getting there

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    Not for me thanks, I prefer to be able to drive past my investments.
    and I know how easy it is to screw up a company anyway...:eek:
    Zoila take the money...:D
     
  17. crc_error

    crc_error The Rule of 72

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    cool.. prehaps leave something in the managed funds, if you have some spare money left over from buying the house.
     
  18. The Stig

    The Stig Well-Known Member

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    I love to drive past an ATM and a bank branch and think how my investment is going too :D

    I hate driving past my investment property and wondering if my tenant has paid his rent :-(

    There is an argument for every camp. :D
     
  19. crc_error

    crc_error The Rule of 72

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    Me to.. I also love to drive past a BHP quarry and see how they are digging out all my steel out of the ground!

    Horses for courses.. I recon a mix of both is the smart thing to do...
     
  20. handyandy

    handyandy Well-Known Member

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    Be it that the managed fund you are invested in seems to be lousy, <7% over the last 5 years when we have been through a boom wtf. That adviser should be hung and 1/4ed.

    The Perth property market has just been through a boom and is in all likelihood currently somewhat overpriced I really don't see a real need to rush unless this is a really good deal.

    Cheers