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How safe are Irish held funds.

  • 22-05-2012 8:39pm
    #1
    the keen edge
    Closed Accounts Posts: 1,533 ✭✭✭


    A senior relative of mine has a substantial sum of money invested in a managed fund of stocks and share with Bank of Ireland private banking.

    The fund is his lifes savings and he is understandably worried about its security given the state of the eurozone atm.

    So, are his savings safe in the event of a collapse of the Euro?
    Secondly, if they are not safe what are the alternative safe havens?


Comments

  • #2
    kermit_the_dog
    Banned (with Prison Access) Posts: 159 ✭✭kermit_the_dog


    the keen edge wrote: »
    A senior relative of mine has a substantial sum of money invested in a managed fund of stocks and share with Bank of Ireland private banking.

    The fund is his lifes savings and he is understandably worried about its security given the state of the eurozone atm.

    So, are his savings safe in the event of a collapse of the Euro?
    Secondly, if they are not safe what are the alternative safe havens?

    bank of ireland were only the broker of the investment , in all liklihood the fund is managed by one of the main wall st banks


  • #3
    bridgepeople
    Closed Accounts Posts: 72 ✭✭bridgepeople


    Hi. I would advise that you don't panic. Ireland leaving the eurozone is still a very unlikely outcome in my opinion.

    It sounds to me as though your relative is quite risk averse which is natural for a person in their retirement years (I'm interpreting senior to mean elderly here). It is quite unusual for someone in that age bracket to hold all their savings in an equity fund (i.e. shares).

    I suggest you search out a financial advisor who can come up with a portfolio for your relative that better meets their needs. Without knowing anything more about the person, this portfolio is likely to have a significant weighting to bonds and commodities. Don't shy away from fund of fund products for hedge funds (sometimes called absolute return) and/or alternatives such as private equity and infrastructure. You may also wish to spread the currency exposure so it is not all in Euro.

    At all times, be aware of the fees being charged. A management fee over 1% is steep, especially for equity and bond funds. Anything over 2% is penal. Ideally you should not pay any up front fees. Institutional investors never pay these.

    When making an investment in a fund product, ask for a copy of the prospectus. Make sure the fund is structured so that it is a separate legal entity from the parent firm. That way if Bank of Ireland or whoever becomes insolvent, your assets are safe. Also make sure the fund has an auditor and custodian that are household names.

    Good luck!


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