Standard Life GARS

Seaniemac

I recently received a substantial compensation payment following an accident. I was introduced to a local Independent Financial Consultant who advised me on what I could invest some of the money in that would carry a low risk to my capital. One of the products that he recommended was the Standard Life Global Absolute Return Strategies or GARS Fund. It was suggested that I invest €500,000 of my settlement in this fund. I am more or less illiterate when it comes to anything to do with Finance or Investments. I would welcome any input from anyone that may know something about this type of investment.

Browney7

Firstly is capital security important to you or can you afford to potentially lose some of your investment? Are you dependent on the money to readjust your lifestyle after the accident?

Has your adviser mentioned the management fee that is applicable? Did he/she give you a "reasons why" as to why he/she is recommending investing a very substantial amount in just one fund - in fairness its a very diversified fund with a decent track record.

Seaniemac

Hi Browney7,
Capital security is very important to me. I probably could afford to loose some of my investment but I would rather not. This is money that is left over after allowing for lifestyle changes. It is money that I would like to provide some sort of monthly income to the household. He did say that we didn`t have to pay any management fee and that that would be payed by the Investment Company. He also said that the Annual Management charge is 1.35% and an adviser fee of .25%. He said that the Investment was with one of the stronger companies on the market at the moment..

Browney7

Seaniemac wrote: »

Hi Browney7,
Capital security is very important to me. I probably could afford to loose some of my investment but I would rather not. This is money that is left over after allowing for lifestyle changes. It is money that I would like to provide some sort of monthly income to the household. He did say that we didn`t have to pay any management fee and that that would be payed by the Investment Company. He also said that the Annual Management charge is 1.35% and an adviser fee of .25%. He said that the Investment was with one of the stronger companies on the market at the moment..

Is the adviser fee of 0.25% on top of the management fee? 1.6% would be steep enough to be honest when you'd expect Gars to grow by 5% per annum. Has the advisor committed to review your policy on an ongoing basis - I'd insist on this if your advisor is insistent on charging you this 0.25% p.a.

Has your advisor disclosed to you how much he is getting paid for his services? Obviously the advisor should get paid for their services but you need to satisfy yourself that you are happy with this because you will be paying for it in ongoing charges

Seaniemac

Hi Browney7,
I`m meeting with him again this afternoon and I`ll find out a bit more about these charges. I know that he has to get paid for his work but I`ll have to find out a bit more about it.....

Seaniemac

Hi Again Browney7,
He also said he would be reviewing the Investment every 6 months....

gordongekko

Have you looked at property investments?

NewCorkLad

Hi Seanie

The Standard Life GARS Fund is an excellent fund which has acheived an annualised return of 8%with a low volatility since it was set up in 2006. However this is a mostly equity based fund as such there are risks involved and potentially you could lose some money in it. If capital security is something you are very concerned with I would be hesitant to tell you to invest your entire sum in the one fund. I would be looking to set up a portfolio of investments with the GARS fund at the centre of it.

With regard to the fees the GARS fund does have a higher annual fee 1.35% than standard investment funds this is paying for the expertise behind this fund and the adviser fee of 0.25% is fairly standard. However I would be looking to try and get extra allocation for a lump sum of this size.

Seaniemac

Hi gordongekko,
I haven`t really looked into Property with the exception of buying a lockup shed adjoining my own house yesterday for €22,000. It will, I feel, add value to my own house. As a result of my accident I no longer live in that house but I don`t want to sell it either. I`m currently living in Rented accommodation while I am building a new house. I would consider buying some property at the right price but I`m inclined to be a bit lazy and would rather Invest the money in something relatively safe and have an income from that..

Seaniemac

Hi NewCorkLad,
I`ve been thinking that €500,000 is quite a lot to be investing in a single investment. I wonder If I went with €200,000 or even €100,000 would it be better or even put it in the Post Office altogether. Any Ideas????

Browney7

Cork Lad is correct that it is a good fund that has performed well.

It has a very good track record. I do feel the 8% annualised growth over 5 years is a little misleading because it grew by over 20% between March 2009 (The bottom of the market crash) and March 2010 and since then the performance has been 6% between 2010 and 2011, 9.4% between 2011 and 2012, 5.3% between 2012 and 2013 and 3.4% between 2013 and 2014 - I'm getting all these figures from their factsheet.

Standard Life rate this fund a 4 on their risk/volatility scale.

On the other hand with interest rates being so low - 3 year An Post savings certificates are 4% gross return (DIRT free though) - you have to take a bit of risk to make reasonable returns.

gordongekko

500k is a huge sum to invest in one fund. However if your net worth is 100 million then it's just a drop in the ocean. It sounds like you own a property and don't live in it and are building another so you may already have enough exposure to property.

NewCorkLad

Seaniemac

Alot would depend on your circumstances. You stated that you want this money to provide you with a monthly income, will the return off these funds be your only income? Do you have any major financial commitments further down the road? If so the An Post savings will probably not provide you with enough of a return to get by. As stated above the 3 year bond would provide a return of 4% after 3 years which would be €6,687 a year on the €500,000. Taking some risk with your money to get a good return could be your best option, but the important point is to find the level of risk you are happy with and then diversify so all your eggs arent in 1 basket.

willietherock

I suggest you shop around and try a couple of "Independent Financial Consultants" .I've no experience of financial consultants but as I understand it they are two types - 1. sales people only interested in earning a commission and 2. those who are paid a flat fee and are "independent". Given the importance of the investment you should spend sometime educating yourself on what options are out there for you before making any commitment.

Seaniemac

Well after a lot of deliberation and soul searching I`ve decided to Invest €200,000 in the Standard Life GARS Fund. I`m going to sit on the rest of the money for a while and weigh up my options but in the meantime Thank You All for your help and advice......

gordongekko

Seaniemac wrote: »

Well after a lot of deliberation and soul searching I`ve decided to Invest €200,000 in the Standard Life GARS Fund. I`m going to sit on the rest of the money for a while and weigh up my options but in the meantime Thank You All for your help and advice......

If you have time watch last night's prime time tosee some potential pit falls. However sl are a1 and I'm not suggesting they would employ any of the tactics chc did.

NewCorkLad

Seaniemac wrote: »

Well after a lot of deliberation and soul searching I`ve decided to Invest €200,000 in the Standard Life GARS Fund. I`m going to sit on the rest of the money for a while and weigh up my options but in the meantime Thank You All for your help and advice......

Good luck with your investment. As I said previously said try to negotiate a good allocation rate for yourself. Becareful also to not leave the remaining funds sitting in a currrent account even a low deposit rate is better than nothing if you are gonna be sitting on it for a few months.

Seaniemac

Thanks Guys.....I did see Prime Time and it would make you jittery but as Del boy used to say "He who dares wins".....

gordongekko

Seaniemac wrote: »

Thanks Guys.....I did see Prime Time and it would make you jittery but as Del boy used to say "He who dares wins".....

Ah not with that type of money.

Seaniemac

The bank that I use, Permanent TSB, also asked if I would like to meet with a Wealth Management Consultant who works with Irish Life Financial Services. Would Irish Life have a few better options where my money is concerned? I`m begining to think that under the mattress is the safest place for it...

gordongekko

Seaniemac wrote: »

The bank that I use, Permanent TSB, also asked if I would like to meet with a Wealth Management Consultant who works with Irish Life Financial Services. Would Irish Life have a few better options where my money is concerned? I`m begining to think that under the mattress is the safest place for it...

No harm in talking to him you might learn something. However ptsb Is a tied agent to Irish life and Irish life will just sell you one of their policies. Your ifa should have had access to Irish life policies as well.

Seaniemac

Hi gordongekko,
My ifa has put some money in Irish Life for me also. I have another question. What are your feelings on the An Post 4 year and 10 year National Solidarity Bonds? The 4 year pays 6% and the 10 year pays 30%.