I'm normally loathe to give financial advice to someone over the internet - I mean it's your money and all that.
But.
I've got a horror story about Liberty (pretty much the same story as you)
A guy in my team has just cancelled his ten year endowment with them 5 years in after he realized he's lost quite a bit with them.
I would honestly quit and take the hit - easy for me to say for sure but that would be my advice.
The issue with that type of investment is
A - they take their commission up front which leaves no incentive for them to care about the performance of the product after wards
B - it typically includes some sort of death benefit which is why you've lost so much already - not all your 50K goes to investing
C - they're not flexible - you can't cancel, stop contributions etc
Look take this from whence it comes - some random guy on the internet - but I would try get out. Even go to the Ombudsman, as this product really doesn't look like it suits you.
Yeah not one person has told me 1 good thing yet so far, and it does not seem to nearly what i have asked for.
Here's what another advisor told me, so i think i will just be cutting it, send an email out coppying my FA in as well as whichever liberty email i can find and cancel asap
Thank you for allowing us the opportunity to advise.
With regards to the Liberty performance which you sent, there are some factors to take into account.
1. Platform: Liberty Investment Builder – this an endowment product designed with a minimum 5 year time in mind
2. Portfolio: Allan Gray Balanced and Coronation Balanced Plus funds – these funds have a moderate risk mandate and will experience volatility over the shorter term
2. Date of Commencement: June 2018 – the performance is not a true reflection of the portfolio as a return of 2% – 3% above inflation should be targeted on a rolling 3 year basis
It would be interesting to see what commission is taken (upfront and annual) and the effective annual cost of the plan (the quote will have these details).
Based on the information you have provided a cautious portfolio in a linked investment plan should rather be considered on a cost effective platform like Allan Gray .
For a 12 – 36 month view balanced funds might not achieve the desired return and there is a chance of selling the units at a lower price over this duration.
For consideration, please find attached an Allan Gray linked investment plan quotation for the lump sum of R***** and the monthly premium of R******
The portfolio is mostly conservative with the lump sum allocation of 50% to the Allan Gray Stable fund and 30% to the Coronation Balanced fund.
Some risk has been applied however with 20% to the moderate Investec Opportunity fund.
The monthly premium is allocated 40% to the Allan Gray Stable fund and 30% to each of the other funds.
The initial commission is waivered while a 0.75% advisor fee is applied annually.
The effective annual cost (a summary all fees and charges) over the first 3 years of 2.69% is very competitive.
If your son does not want any risk to be taken on the lump sum and/or premiums we do offer the Investec CCM Bank account which has a current rate of 7.01% on balances of R10,000 or more.
The fee is 0.5% so the effective rate is currently 6.51% (the rate is linked to the top 4 performing money market rates).
This account can also facilitate forex transfers (transfer to or from his offshore account) at low fees.
Please feel free to pass this email onto your son and request any further information if required.
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