AFH Wealth Management - discretionary fund management info

[giger]

Hi all, not sure if this is a bit too specific.

My IFA is now part of AFH Wealth Management - a midlands based conglomerate that seems to take on IFA and FA firms.

I have a pension with Aegon that has performed quite well over the past 6 years but hasn't been touched since set up. Called up my IFA to review some of the funds and he is now try to upsell the AFH discretionary managed fund saying it will give much better returns and it is a waste of my money paying him to review my existing Aegon pension funds (which I can self-manage via the Aegon portal).

I do not put any new money in to my Aegon pension and have seen growth of about 10% in the past year.

Cost to me to transfer to the discretionary managed fund is 4% of my pot (no direct fee to IFA) and on-going 1% fund cost (in addition to any specific fund fees).

I have used my IFA for years, though more recently my folks have fallen out with him due to some investment advice that they didn't feel was right.

Issue I have is I don't know whether to stick with my Aegon pension and self-manage, pay for his fund advice, or move to the new discretionary fund and buy in to my IFA's hype.

I understand how discretionary funds work (or at least I think I do), but how do I decide if it is a good move? In theory it removes my need to have any formal pension review if I trust the discretionary fund works as it should and I can just put my feet up and watch my pot grow. Do they really work like that?

[giger]

Thanks all, that's what I needed to hear. Both my family and I have a long history with the IFA in question, but he is now part of a larger company and things seem to have changed. Shame really as you build up trust in people and expect that to continue.

TBH I have been thinking of self managing for a while - my portfolio is spread across multiple funds with varying risk ratings that suit my profile. I think I'm prepared to read the fact sheets and self manage myself until I find another IFA (where to look?!). I have managed most of my other finances myself for much of my life so am clued up more than your average punter (but not as much as some of you guys!).

[giger]

Thanks all, your responses have brought some reflection to the discussion.

The 4% covers the transfer of value of my aegon pension into the new vehicle and gets it all up and running. But yeah, 4% is a considerable set up cost. Apparently this is 'better for me' as I don't have to find the fees up front.

I was concerned that I would also be tied into their proprietary investment platform, Where as anyone can ascertain my risk and advice on appropriate aegon funds going forwards.

[giger]

So stick with my Aegon pension and self manage for 12 month and see how it performs? That was my thought. Thinking of moving 50% of my UK Smaller Companies fund in to something with a higher risk rating and see how it performs.

Can anyone recommend a good source where I can read up about some of the funds that I am interested in?

[giger]

mickv said:

Be wary about over self-managing too. Unless you are confident/experienced in investment matters, a decent multi asset fund has a lot going for it. It's a tricky time out there at the moment too, with major equity markets arguably looking fully valued and the risk of economic and political shocks feels quite high to me.

Good luck whatever you decide to do. Pay attention to charges - because they are for certain, whereas returns are not.

Thanks - sound advice. Can I use this place as a sound board for my Aegon funds. I've seen some decent growth in the past 12 months (20% in some cases). It is naïve to presume this will continue but would be good to get the views of others. Do we have a thread here for that?

[giger]

K12beano said:

I see AFH are mentioned. I have nothing specific to say, but in general as they are one of a handful of quite ambitious "consolidators" in the industry.

In simple terms, one firm taking over another tends to happen for one of several core reasons, but undoubtedly the objective of the takeover is for the subsequent business to continue to make or increase income to repay, almost invariably, the borrowing which allowed the acquisition.

So, in simple terms, the business model is shifting. That's not necessarily a bad thing, however that leaves no room for any nostalgia or "loyalty" for continuing patronage from the customer's perspective. Ruthlessly review what qualities the "new" firm has to offer....

Thanks. I did get the sense that I was almost being forcibly taken down this new route, and made to sound like an idiot for even questioning it. As such, and following feedback here I will definitely not be pursuing this.

[giger]

K12beano said:

Post Script:

Also - unless your circumstances have shifted - you need to ask why this solution wasn't presented to you considerably before the firm change, yet "inexplicably" is the answer today. If it is suitable now and nothing has changed why didn't you get this 1/3/5/10 years ago, eh?

The answer being that they didn't have such a marvellous, no brainer, one size fits all system available to them a few years ago!