Intelligent Money - your investment questions answered

[Phillippe Lambert]

Julian, Nik, NRS,

Thank you for all the valuable input and sensible advice, it's certainly made me look at some things in a different light.

Nik - If it's alright with you, I'll drop you an email to discuss further?

[Intelligent Money]

Very happy to help, look forward to hearing from you,

Nik

[guywilko]

JulianPH said:

Hi Guy

Absolutely none whatsoever!

We have offers to buy us about 4 times a year, have had private equity companies wanting to take a stake and have been approached regarding handling a flotation, but we are just not interested.

I am the majority shareholder and the other shareholders are all key people within the company. So we are completely privately owned and and view IM as being an extension of ourselves and our personal values.

Were we to float this would become lost in satisfying the demands of external shareholders (quite rightly).

I don't want external downward pressure on staff costs (I believe you should pay people what they are worth, not just what you can get away with) and upward pressure on charges/margins (I believe in adding honest value for all our clients).

I hope that makes sense.

Out of interest, if you don't mind, what made you ask?

Cheers

Julian

I was just thinking of HL and AJB and preferential share allocations for clients.

I like your rationale

Cheers Guy

[JulianPH]

guywilko said:

I was just thinking of HL and AJB and preferential share allocations for clients.

I like your rationale

Cheers Guy

Thank you Guy!

We have been approached before by clients looking to invest in our own shares and I think that if were ever to consider taking on board other shareholders it would be limited to a small tranche of stock being made available to existing clients only, as their interests would be aligned to ours.

As I say, this is not something we are looking at right now though, but if we did it would be the same as preferential share allocations for clients, just without opening this up to the market pressures of a full listing.

Right now though our focus is firmly on delivering a new range of investment portfolios, a General Investment Account and our International Private Clients service over the next few weeks. We are also working with a number of charities to deliver a sustainable and socially responsible charity investment account, which is a very interesting area.

Cheers

Julian

[Patch1875]

Been reading this thread with interest.

I’ve currently got a HL sipp that’s through my limited co. It’s fairly small at around 20k but feel it’s currently treading water so looking to let someone else do the work! Is this something you would take on? It does have a small amount of Woodford in it so don’t know if that’s an issue.

I’ve also got another pension with Standard life from a previous employer which I’m sure has around 24k in it but I think I got told it’s best to leave it due to high exit fees?

[Intelligent Money]

Hi Patch,

We would be very happy to have a look at what your current SIPP and the Standard Life Pension are doing for you and take you through the options you have.

PM me at [e-mail] and I will see how we can help.

Nik

[KTF]

Patch1875 said:

his something you would take on? It does have a small amount of Woodford in it so don’t know if that’s an issue.

I’ve also got another pension with Standard life from a previous employer which I’m sure has around 24k in it but I think I got told it’s best to leave it due to high exit fees?

Have you spoken to Standard Life as I also have a pension with them and was told there were no fees for transferring out.

[JulianPH]

Patch1875 said:

Been reading this thread with interest.

I’ve currently got a HL sipp that’s through my limited co. It’s fairly small at around 20k but feel it’s currently treading water so looking to let someone else do the work! Is this something you would take on? It does have a small amount of Woodford in it so don’t know if that’s an issue.

I’ve also got another pension with Standard life from a previous employer which I’m sure has around 24k in it but I think I got told it’s best to leave it due to high exit fees?

Hi Patch1875, I'm glad you have found this thread interesting and can see that Nik was able to get back to you more quickly than I was!

We would be very happy to help you decide upon the best course of action and could certainly take over the running of your pension(s) if you wanted us to do so.

Cheers

Julian

[JulianPH]

KTF said:

Have you spoken to Standard Life as I also have a pension with them and was told there were no fees for transferring out.

A good point - and of course the FCA has capped pension exit fees at 1% now.

It may be an old style "With Profits" pension that has a Market Value Adjuster though (which is just another way of saying exit fee, but it gets round the cap rules).

Nik will go over all of this with him, so he will soon know the full picture.

Cheers

[Patch1875]

KTF said:

Patch1875 said:

his something you would take on? It does have a small amount of Woodford in it so don’t know if that’s an issue.

I’ve also got another pension with Standard life from a previous employer which I’m sure has around 24k in it but I think I got told it’s best to leave it due to high exit fees?

Have you spoken to Standard Life as I also have a pension with them and was told there were no fees for transferring out.

It was years ago so may have changed?

[Patch1875]

Intelligent Money said:

Hi Patch,

We would be very happy to have a look at what your current SIPP and the Standard Life Pension are doing for you and take you through the options you have.

PM me at [e-mail] and I will see how we can help.

Nik

Thanks

Will send you a message when i get a chance later.

Derek

[Intelligent Money]

A big part of the service that the Private Client Service team offer is helping clients make informed decisions about the course of action they want to take.

This often includes making you aware of things that may not be immediately obvious and debunking a lot of the financial language used in documents so that you understand what options you have and what the pros and cons of a given course of action will be.

It then means that you can be confident in any decisions you make without falling foul of unintended consequences.

Our experience is that some clients of all the moving parts and have taken into consideration all that they should have and are grateful and more confident once we have been able to confirm that things are as they thought they were. But often there are areas that people just haven't considered as they were unaware that they existed and having taken the new information into account the decisions that are made are often quite different to the one they expected to be making.

My team make sure that you have full picture and understand the options you have so you can be confident in the decisions that you make.

Nik

[tighnamara]

JulianPH said:

Following on from a question raid on another thread:

DeuceDuece said:

OP - would you mind taking a moment to look into the actual effect paying 1% in additional fees will have on your pension fund in 30 years?

I gave a response. On the basis (as I did not know the OP's exact circumstances) of using round numbers, this was:

• £100,000 fund value

• £1,000 flat monthly contributions

• 7% average annual return after fund charges

• 30 years of growth (the OP is 35) and 20 years of income drawdown

The answer was the annual 1% adviser fee cost the client c. £1,000,000 on his £460,000 of total lifetime contributions.

So the adviser charge was reducing the pot at a rate of over twice the amount the client invested, with the client taking all of the investment risk and the adviser taking none of this.

I said I would post other examples here, but as none will accurately represent those of each individual, I will only give a handful of examples and invite anyone who would like a personal comparison to contact us for a completely free summary of their own adviser costs.

This will enable you to compare the costs against the value provided (and we can go over this with you too).

We are not aiming to devalue financial advice, simply to enable you to understand the cost of such financial advice, so you are able to come to your own conclusions.

Quick Samples

The impact of a 1% annual adviser charge - everything else being based upon a 7% average annual return after investment (and platform) charges:

• £50,000 invested for 30 years = c. £100,000 loss.

• £100,000 invested for 30 years = c. £200,000 loss

• £1,000 a month invested over 30 years = c. £210,000 loss

• £2,000 a month invested over 30 years = c. £420,000 loss

And so on...

So my basic message is that you need to be certain you are receiving some pretty stupendous 'value' for such fees (I doubt you are though).

Obviously having a qualified and experienced financial professional available can indeed add value.

But can they add more value than the compound growth you could have received on the total amount of money you invest over your lifetime (without their fees)? I think not.

It is financial planning (not transactional financial advice) that adds the most value. This is something we offer our Private Clients for free. I'll post on this in the morning.

Cheers!

Julian's previous post on adviser costs over investment lifetime. Keep it at hand to remind me what I didn't know.

[JulianPH]

tighnamara said:

Julian's previous post on adviser costs over investment lifetime. Keep it at hand to remind me what I didn't know.

Thanks very much for posing this again, Mr Pointy was trying to find this on another thread - Ongoing Financial Advice...what's reasonable and fair? - https://www.pistonheads.com/gassing/topic.asp?h=0&... and I couldn't remember where I had posted it!!!

Cheers

Julian

[tighnamara]

JulianPH said:

tighnamara said:

Julian's previous post on adviser costs over investment lifetime. Keep it at hand to remind me what I didn't know.

Thanks very much for posing this again, Mr Pointy was trying to find this on another thread - Ongoing Financial Advice...what's reasonable and fair? - https://www.pistonheads.com/gassing/topic.asp?h=0&... and I couldn't remember where I had posted it!!!

Cheers

Julian

I meant to post it on the other thread but old age took over.

[JulianPH]

tighnamara said:

I meant to post it on the other thread but old age took over.

Thank you anyway. If you want to post it there then I will delete my post as reading it back I think I may be in danger of breaching PH rules by me posting it off the IM thread (though you wouldn't).

Cheers, and thanks again!

Julian

[highpeakrider]

Firstly let me say I know very very little about investing and would not have a clue about building a portfolio.

So I have my pension lump sum on the way as i head to retirement.
I have a good pension that will handle day to day spending.

Of course I have set objectives for my investment, bit of a lie, I have no idea other than, I will get older and at some point
i'll want access to it to spend.

I've had a meeting with 'Wealth at Work' not that impressed with the fees and the advise to put £50K under the bed.

I've created an account on Vanguard with a view of putting an amount of shall we say shorter term spending in a lifestyle 20/40 fund and some in a higher risk fund for longer term.

I will also be working potentially till 2021 where I should have a monthly amount to save/invest.

Vanguard seems to work by providing a method for lump sum investment plus monthly top ups.

How would IM work for me and would I have access to an online view of my account?

Cheers Phil

[JulianPH]

highpeakrider said:

Firstly let me say I know very very little about investing and would not have a clue about building a portfolio.

So I have my pension lump sum on the way as i head to retirement.
I have a good pension that will handle day to day spending.

Of course I have set objectives for my investment, bit of a lie, I have no idea other than, I will get older and at some point
i'll want access to it to spend.

I've had a meeting with 'Wealth at Work' not that impressed with the fees and the advise to put £50K under the bed.

I've created an account on Vanguard with a view of putting an amount of shall we say shorter term spending in a lifestyle 20/40 fund and some in a higher risk fund for longer term.

I will also be working potentially till 2021 where I should have a monthly amount to save/invest.

Vanguard seems to work by providing a method for lump sum investment plus monthly top ups.

How would IM work for me and would I have access to an online view of my account?

Cheers Phil

Hi Phil

IM works in a very similar way to Vanguard LifeStrategy in that we also offer a range of ready made portfolios with different levels of equity/bond exposure.

There are 2 key differences though. Firstly we actively manage these portfolios in a way that Vanguard don't. So in effect, rather than just tracking the markets we have human involvement to be able to react to any market changes.

The second difference is we also provide you with a named Private Client Manager who is available whenever you need him to go through all of your financial planning, tax efficiency, etc. This is not just limited to your IM investments, but your whole financial position.

Obviously this means we cost a bit more than Vanguard (IM is 0.87% all inclusive), so if this is not something you require and you are happy without having the human management element then you may be better off sticking with Vanguard, they are very good.

If I were you I would have a chat with Nik (the Private Client Manager assigned to PHers) and just talk through things. He will be very open and honest with you, probably be able to give you some valuable insights and raise things you may have not considered.

This is a free service and there is absolutely no obligation whatsoever for you to proceed with us.

I should also point out that in September we are launching our IM Index portfolios which come with the same Private Client service highlighted above but the charge is just 0.57% a year (again, all inclusive).

These work in the same way as Vanguard (100% equities dropping to 80%, 60%, 40% and 20%).

You can get Nik at [e-mail]

Cheers

Julian

[highpeakrider]

Thanks Julian I’ll drop him an email

[Intelligent Money]

Hi

Sorry to say we have some IT gremlins at moment. There is an intermittent fault on in the online application process that is causing a DOB error and gives an error message saying you need to be over 16 to use the service.

Apologies if you have tried to apply and have had this message. We are working to fix it.

In the meantime enjoy the fact that system obviously thinks you are looking good and under 16!

Nik