I had a visit from a NU financial adviser.
I told him that I was ultra, ultra cautious; I could not afford to
lose any of my capital.
He told me their Capital Protected Plan was for me. Sounds good -
just the job.

Now call me old fashioned but if I was looking to invest some money in
a plan called : "Norwich Capital Protected Plan" - then I would have
thought that my original investment ie my Capital would be
"safe"/"protected"/"guaranteed".

In the booklet provided it does say: "What you get back depends on how
your investment grows and on the tax treatment of the investment."
Good - sounds fine - I realise that the investment may not grow - but
- I will not lose it.

However, what that sentence should say is:

"What you get back depends on how your investment grows and on the tax
treatment of the investment, and on whether the company from who we
purchase the corporate bond is still in business"


As elsewhere it does say there is a possibility that the company
(providing the bond) could fail or become insolvent, your investment
could be at risk, and you could lose some or all of it.!!

Perhaps I'm just old-fashioned.

In uk.finance judith wrote:

Now call me old fashioned but if I was looking to invest some money in
a plan called : "Norwich Capital Protected Plan" - then I would have
thought that my original investment ie my Capital would be
"safe"/"protected"/"guaranteed".

Bear in mind that any such investment is eroded by inflation so, while
you might have the same number of pounds as you started with, you won't be
able to buy as much with the money as you could when you invested it.

However, what that sentence should say is:

"What you get back depends on how your investment grows and on the tax
treatment of the investment, and on whether the company from who we
purchase the corporate bond is still in business"

That sounds a bit odd - the point of corporate bonds is that there's a risk
the company might default; otherwise they'd be a dead cert for income.
There must be some difference between this and a plain old corporate bond
fund.

As elsewhere it does say there is a possibility that the company
(providing the bond) could fail or become insolvent, your investment
could be at risk, and you could lose some or all of it.!!

Are you sure that's related to your plan specifically? It might just be
generic boilerplate language for all the investments listed of which the
Capital Protected Plan is only one.

I don't know what NU do, but usually Guaranteed Equity Bonds have some other
mechanism in place (autocalls, preference shares etc) to guarantee the
capital. This seems to be the case if this is the plan:
http://www.norwichunion.com/press/st...pital-plan.htm

If NU goes bust then I think you're covered up to 48,000 by the FSCS. I
don't know what happens if the fund is managed by someone else and they go
bust.

BTW, you do realise that 33% of it is linked to house prices? This might be
a riskier time to invest on that front, as they have to rise by 26% over 6
years to keep up with inflation at 3%.

Theo

On Jul 23, 12:42*pm, judith wrote:

However, what that sentence should say is:

"What you get back depends on how your investment grows and on the tax
treatment of the investment, and on whether *the company from who we
purchase the corporate bond is still in business"

As elsewhere it does say there is a possibility that the company
(providing the bond) could fail or become insolvent, your investment
could be at risk, and you could lose some or all of it.!!

Your understanding is correct.

Details - http://www.nuinvest.co.uk/protected

As Theo said, if you cannot afford to lose any capital then some form
of index linking is the only option, so the product does not sound
suitable. The only suitable products are NS&I Index LInked Savings
Certificates -
http://www.nsandi.com/products/ilsc/index.jsp
or index linked government loan stock (aka index linked Gilts) -
http://www.dmo.gov.uk/index.aspx?page=About/About_Gilts

This article says it all, really -

"For the risk-averse investor, the financial strength of the medium
term note provider is crucial and a factor that would need
consideration given the current economic climate."

http://www.ftadviser.com/FinancialAd...cted-plans.jsp

Make sure you find out what commission the FA is receiving, it may pay
to go to a independent financial advisor who can rebate some or all of
the commission, perhaps in exchange for a fee -
http://www.moneysavingexpert.com/sav...nancial-advice

These products are generically know as Guaranteed Equity Bonds (GEB),
the benchmark product being the NS&I GEB -
http://www.nsandi.com/products/geb/index.jsp

There isn't one available at the moment - they become available every
few months. You could sign up for the email notification, but NS&I
have recently taken to spamming.

The NS&I varient is effectively guaranteed by the government, so can
be considered more secure.

hth

--
Daytona