Ancient Order of Foresters Friendly Society Ltd Child Trust Fund
Value For Money
Ancient Order of Foresters Friendly Society Ltd Child Trust Fund
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User Reviews
Value For Money
I Searched The Internet Looking At All The Child T
I searched the internet looking at all the Child Trust Fund Stakeholder providers. Many of them were the same, as the government guidelines seem very specific and the companies are regurgitating those guidelines in their blurb. The "TeddyTrust" from Foresters, however, did look different. They have obviously thought very hard about their package and are offering many incentives, both financial and practical. For example, upon request of an info pack you receive a small teddy in the well packaged box. Once an account has been opened your child receives a large boxed teddy, with certification, which if still around when the child is 18 they will receive a further present. The child will also be sent a birthday card each year until their 18th birthday. Financially the money is secure, as you are guaranteed to get back at least what you have put in. Along with many other financial incentives, this deal sounded great and I was well and truly hooked.
However, when I looked a bit further at the pack I realised that this wasn't a stakeholder account. The primary investment is in property and not shares. So whilst the money is still bound to grow, the account will not be subjected to the strict regulations that the government have detailed. For example, the government states that the management charges do not exceed 1.5%. So whilst the TeddyTrust charges are currently at 1.5% this could increase in the future, which I am sure it will! Also the minimum lump sum contribution that could be made is £100, which is quite a lot when other providers offer a minimum of £10.
So I have been put off by this account. I am sure that anyone investing in this account will still do well. However I did find the information slightly misleading at the beginning, as it took me a while to cotton onto the fact that it is not a stakeholder account. If they provided a stakeholder account then I would still be very interested, as this company seems to have put much more thought into what they are providing. But as it is at present I have to continue with my search for the best stakeholder going. Although to be honest all the others are looking like they all came out of the same production line, offering pretty much the same features.
Having invested in an endowment fund with the Foresters over the last 10 years it has far exceeded its competitors, and as a trully 'Mutual' society that does not have over paid fat cats at the helm, I think the Teddy Trust will out perform its competitors.
I would just say that you get what you pay for. A property-based investment involves the actual purchase of peoperty, which is a pretty secure form of investment and far less volatile than shares. This appeals to people who are risk averse. Property is more expensive to buy and sell than shares which is why they can't guarantee to do it in the long term for 1.5%. For example if the Government put up stamp duty, how would Foresters recover the extra cost?
Remember also that the Govt first set stakeholder charges at 1%. Now, a couple of years on it's 1.5%, a 50% increase! Relying on the charges remaining at 1.5% overlooks the fact the Govt can increase them.
I would suggest it is most important to avoid getting distracted by charges. The best performing funds in the market are certainly not the cheapest!
Q&A
What is the interest on this trust fund?