Which investment? All options open...
Discussion
Apologies in advance if this is the equivalent to 'what car?' in GG; I've tried to do diligence, but currently lacking conviction. For some reason I believe the advice on here will be more impartial/wide-viewing than someone trying to sell me a particular product or portfolio. Not that I expect a black and white answer...
I've got a decent amount of money to invest and am not sure where to put it. I'm not sure if the exact number matters, but it's adequate to get a single BTL with no mortgage...not that I'm necessarily leaning that way. I have no significant debts (just £12k of student debt left that I'm tempted to squash), no mortgage...happy to die in my current house. Options are therefore pretty open, and it seems like a bad move to just have the spending power of this money eroding due to current interest/inflation rates. The main constraint I can see is I'm early 30s, so don't-much fancy dumping it into my pension which seems like the current no-brainer. I might want to liberate the funds to buy my son an education or house in ~15 years...by which time I would hope that wouldn't be all of it!
I've spoken to Santander and an independent financial adviser, and both set my bulls
t detector off to varying degrees. The Santander 'high risk' product seemed to barely outpace inflation, which I suppose may just be the current market. The return on premium bonds and ISAs seemed a bit rubbish. The independent adviser wasn't willing to talk details/expectations without me paying for him to do some research on what would suit me best (which seems odd from a pure numbers perspective), but I pressed him for his view of the market, and he seemed to think interest rates were going to rise soon. Both Santander and the independent wanted significant upfront fees which would set the gains back years, which put me off immediately dabbling. I also got the impression sequence risk isn't on my side right now, given rumblings from China. I could be talking arse, I just subconsciously absorb BBC R4...
I'm from modest means, so the notion of handing over large amounts of money for someone else to play dice with my money is alien to me! I suppose if the product is diverse enough then in the long-term it's hard to lose, and I should probably just get on with it. Advice really appreciated.
I've got a decent amount of money to invest and am not sure where to put it. I'm not sure if the exact number matters, but it's adequate to get a single BTL with no mortgage...not that I'm necessarily leaning that way. I have no significant debts (just £12k of student debt left that I'm tempted to squash), no mortgage...happy to die in my current house. Options are therefore pretty open, and it seems like a bad move to just have the spending power of this money eroding due to current interest/inflation rates. The main constraint I can see is I'm early 30s, so don't-much fancy dumping it into my pension which seems like the current no-brainer. I might want to liberate the funds to buy my son an education or house in ~15 years...by which time I would hope that wouldn't be all of it!
I've spoken to Santander and an independent financial adviser, and both set my bulls
t detector off to varying degrees. The Santander 'high risk' product seemed to barely outpace inflation, which I suppose may just be the current market. The return on premium bonds and ISAs seemed a bit rubbish. The independent adviser wasn't willing to talk details/expectations without me paying for him to do some research on what would suit me best (which seems odd from a pure numbers perspective), but I pressed him for his view of the market, and he seemed to think interest rates were going to rise soon. Both Santander and the independent wanted significant upfront fees which would set the gains back years, which put me off immediately dabbling. I also got the impression sequence risk isn't on my side right now, given rumblings from China. I could be talking arse, I just subconsciously absorb BBC R4... I'm from modest means, so the notion of handing over large amounts of money for someone else to play dice with my money is alien to me! I suppose if the product is diverse enough then in the long-term it's hard to lose, and I should probably just get on with it. Advice really appreciated.
My current place is lovely - big enough to be a bit of a challenge to maintain, sizable garden, and only one immediate neighbour. Great compromise between seclusion and access to city centres too. Hence happy to die there.
I had tenants in my old house for 2 years (waiting for the market to recover before selling, now liquidised)...I'm not keen to be a landlord again, honest!
I had tenants in my old house for 2 years (waiting for the market to recover before selling, now liquidised)...I'm not keen to be a landlord again, honest!
One would hope the answer to this would be "pay an IFA for some impartial advice" and I'd expect it to cost in the ballpark of £100 an hour, and you'd be paying for a few hours. I'd imagine that would be sufficient to define your broad objectives and to outline the options available. Thereafter you'd be able to manage your investments for yourself and perhaps with the occasional professional review. Unless you're taking about a serious amount of money or you're looking to use tax arrangements that sail fairly close to the wind, I would think you'd be well set.
I have no idea if customers are prepared to pay that kind of money for advice or if IFAs offer those services without any expectation of going on to earn sales commission.
Most of the questions we'd like to have answered are unanswerable. What asset class will out-perform? Who knows. Are european stocks a better bet than Asia, US,etc? Who knows. Should I be spivving the FX markets via some dodgy bd in Bermuda? Probably not.
All you can expect is some guidance on the relative risk of asset classes, a description of how they've performed in the past with a huge caveat attached that that tells you not much about the future, the transaction and management fees you may incur, and the tax implications for you of different products and the wrapper in which you hold them. In addition to the discussion of relative risk of asset classes, I'd expect there to be advice on holding diversified positions across and within asset classes.
But above all the key thing that should be discussed is your financial circumstances now and your reasonable expectations of how they may develop, your investment objectives, your risk appetite. That's the bed rock for everything else.
I have no idea if customers are prepared to pay that kind of money for advice or if IFAs offer those services without any expectation of going on to earn sales commission.
Most of the questions we'd like to have answered are unanswerable. What asset class will out-perform? Who knows. Are european stocks a better bet than Asia, US,etc? Who knows. Should I be spivving the FX markets via some dodgy b
d in Bermuda? Probably not.All you can expect is some guidance on the relative risk of asset classes, a description of how they've performed in the past with a huge caveat attached that that tells you not much about the future, the transaction and management fees you may incur, and the tax implications for you of different products and the wrapper in which you hold them. In addition to the discussion of relative risk of asset classes, I'd expect there to be advice on holding diversified positions across and within asset classes.
But above all the key thing that should be discussed is your financial circumstances now and your reasonable expectations of how they may develop, your investment objectives, your risk appetite. That's the bed rock for everything else.
ATG said:
One would hope the answer to this would be "pay an IFA for some impartial advice" and I'd expect it to cost in the ballpark of £100 an hour, and you'd be paying for a few hours. I'd imagine that would be sufficient to define your broad objectives and to outline the options available. Thereafter you'd be able to manage your investments for yourself and perhaps with the occasional professional review. Unless you're taking about a serious amount of money or you're looking to use tax arrangements that sail fairly close to the wind, I would think you'd be well set.
I have no idea if customers are prepared to pay that kind of money for advice or if IFAs offer those services without any expectation of going on to earn sales commission.
Most of the questions we'd like to have answered are unanswerable? What asset class will out-perform? Who knows. Are european stocks a better bet than Asia, US,etc? Who knows. Should I be spivving the FX markets via some dodgy bd in Bermuda? Probably not.
All you can expect is some guidance on the relative risk of asset classes, a description of how they've performed in the past with a huge caveat attached that that tells you not much about the future, the transaction and management fees you may incur, and the tax implications for you of different products and the wrapper in which you hold them. In addition to the discussion of relative risk of asset classes, I'd expect there to be advice on holding diversified positions across and within asset classes.
But above all the key thing that should be discussed is your financial circumstances now and your reasonable expectations of how they may develop, your investment objectives, your risk appetite. That's the bed rock for everything else.
Paying for both the IFA advice and the execution of said advice is indeed a stumbling block for me...I've dealt with enough estate agents and solicitors (not conveyancing) recently that the whole "think of a number, double it" practice for fees, combined with variable fees depending on the value of the transaction really grates. If anyone can recommend a good IFA in Bristol/Bath I'm all ears. My situation is a bit unstable at the moment in that I'm between contracts and really need to change fields, which adds to the reluctance to seek personalised advice. I have no idea if customers are prepared to pay that kind of money for advice or if IFAs offer those services without any expectation of going on to earn sales commission.
Most of the questions we'd like to have answered are unanswerable? What asset class will out-perform? Who knows. Are european stocks a better bet than Asia, US,etc? Who knows. Should I be spivving the FX markets via some dodgy b
d in Bermuda? Probably not.All you can expect is some guidance on the relative risk of asset classes, a description of how they've performed in the past with a huge caveat attached that that tells you not much about the future, the transaction and management fees you may incur, and the tax implications for you of different products and the wrapper in which you hold them. In addition to the discussion of relative risk of asset classes, I'd expect there to be advice on holding diversified positions across and within asset classes.
But above all the key thing that should be discussed is your financial circumstances now and your reasonable expectations of how they may develop, your investment objectives, your risk appetite. That's the bed rock for everything else.
Taking a large bite out of the funds pre-geometric growth is really damaging...some clever IFA design me a package where I pay the fees on cashing out!
Thanks for the recap, it's stuff I've talked over with the IFA, but it's a useful reference written down.
One of the good things about RDR is that it has made a lot of advisers think about the value of what they have with clients. Most I know, me included, take a very small or zero amount for business transaction. The days of an adviser creaming off 1/2/3% for whacking off an app are gone. Where you may have to pay is the provision of a planning report which will cover many things, including any subsequent transactional activity.
But again, if you find an adviser who takes a pragmatic business view of working with you, or if you can can convince him or her of the merits of you both working together and point out the benefits of a long term relationship via ongoing remuneration mainly or only, you may get lucky. I don't take on many new clients anymore and like (try!) to keep my existing clients happy by doing the right thing and adding genuine value on an ongoing basis.
At the end of the day, Financial Services *is* retail (albeit responsible retail, or so you'd hope). Cheapest isn't always bestest, but don't pay too much either, where you don't need to. You need to find an adviser that's a good long term fit for both of you and where your interests are aligned (rather than yours being subordinated). Find one (imho) who doesn't limit him/herself to that godawful process.. the annual review.
But again, if you find an adviser who takes a pragmatic business view of working with you, or if you can can convince him or her of the merits of you both working together and point out the benefits of a long term relationship via ongoing remuneration mainly or only, you may get lucky. I don't take on many new clients anymore and like (try!) to keep my existing clients happy by doing the right thing and adding genuine value on an ongoing basis.
At the end of the day, Financial Services *is* retail (albeit responsible retail, or so you'd hope). Cheapest isn't always bestest, but don't pay too much either, where you don't need to. You need to find an adviser that's a good long term fit for both of you and where your interests are aligned (rather than yours being subordinated). Find one (imho) who doesn't limit him/herself to that godawful process.. the annual review.
If you are just looking for a simple managed product something like this could be worth investigating:
http://www.hl.co.uk/funds/portfolio-plus
http://www.hl.co.uk/funds/portfolio-plus
Mud_ said:
Paying for both the IFA advice and the execution of said advice is indeed a stumbling block for me...
Please can you explain what you mean?The IFA advice is to determine your needs and recommend suitable products to meet those needs. This is likely to include determining your risk appetite and explain which types of investment strategy would be consistent with this.
Implementing that advice requires entering into a product with a provider - they will make charges for the administration of the product and implementing the investment strategy.
Why shouldn't this be paid for?
CaptainSensib1e said:
If you are just looking for a simple managed product something like this could be worth investigating:
http://www.hl.co.uk/funds/portfolio-plus
Thanks, I am investigating that further.http://www.hl.co.uk/funds/portfolio-plus
sidicks said:
Please can you explain what you mean?
The IFA advice is to determine your needs and recommend suitable products to meet those needs. This is likely to include determining your risk appetite and explain which types of investment strategy would be consistent with this.
Implementing that advice requires entering into a product with a provider - they will make charges for the administration of the product and implementing the investment strategy.
Why shouldn't this be paid for?
I may be improperly lumping together the IFA and the provider, but from a customer(/layman/philistine) perspective I would simply like the provider to tell me why their product within whatever category is good (by some empirical metric). Choice of the category seems like it could be taken from a pamphlet, not a £100/hour consult. Naive I suppose. Obviously someone (ideally singular) needs to get paid, although why the fee should be proportional to the transaction value is another question - if the provider is motivated to get good returns then larger transactions should be in their interest, surely? Rhetorical question really since whatever the answer is it won't help me invest.The IFA advice is to determine your needs and recommend suitable products to meet those needs. This is likely to include determining your risk appetite and explain which types of investment strategy would be consistent with this.
Implementing that advice requires entering into a product with a provider - they will make charges for the administration of the product and implementing the investment strategy.
Why shouldn't this be paid for?
Mud_ said:
I may be improperly lumping together the IFA and the provider, but from a customer(/layman/philistine) perspective I would simply like the provider to tell me why their product within whatever category is good (by some empirical metric). Choice of the category seems like it could be taken from a pamphlet, not a £100/hour consult. Naive I suppose. Obviously someone (ideally singular) needs to get paid, although why the fee should be proportional to the transaction value is another question - if the provider is motivated to get good returns then larger transactions should be in their interest, surely? Rhetorical question really since whatever the answer is it won't help me invest.
As explained above, the IFA providing the advice will often charge on an hourly basis - unrelated to the size of the investment. If you think you know the product you want, then you can avoid the need to pay for the advice of an IFA, and simply do your own research online. The IFA is unrelated to the product provider - hence the name!
Investment costs ARE typically related to the size of the investment.
Yes, that was all understood - I thought it was obvious I was referring to the IFA as the £100/hr consult and the provider as charging proportional to the transaction, but I suppose I could have been clearer. Since you may never meet the provider it's easy to think in terms of 'us' and 'them'. If my comments have caused you some implied slight then please understand they were only intended to help you fathom the mindset of how this unexperienced(/ignorant) person is struggling to find a definitive plan - i.e. empathy. Pragmatically it isn't likely to change anything. Let's move on.
Mud_ said:
Yes, that was all understood - I thought it was obvious I was referring to the IFA as the £100/hr consult and the provider as charging proportional to the transaction, but I suppose I could have been clearer. Since you may never meet the provider it's easy to think in terms of 'us' and 'them'. If my comments have caused you some implied slight then please understand they were only intended to help you fathom the mindset of how this unexperienced(/ignorant) person is struggling to find a definitive plan - i.e. empathy. Pragmatically it isn't likely to change anything. Let's move on.
I'm simply trying to help you understand what you are paying for and why!I've no personal stake in this, so no 'slight' on me!
CaptainSensib1e said:
If you are just looking for a simple managed product something like this could be worth investigating:
http://www.hl.co.uk/funds/portfolio-plus
There is a wealth of information on HL to read and it's very easy to manage them yourself a very handy website. Of course I'm sure an IFA knows the intimate details of hundreds of different funds or they may just have their favourites. I personally enjoy doing the research and picking my own rather than paying someone for advice whatever you decide on doing reading as much as possible can't be bad. http://www.hl.co.uk/funds/portfolio-plus
Remember the two key rules of investing,
OzOs
- If things go well, it's due to the brilliance of the "added value" advice you have been given.
- If things go badly, it's down to "unforeseeable market forces beyond the control of your adviser".
OzOs
Just to add - IMO advice is worth having so long as it is related to thorough analysis of your own circumstances and then leads on to sensible asset allocation. i.e. the old issue of risk and return.
Personally I do not believe that equities (stocks & shares) are high risk over the medium/longer term. At the end of the day if BP, Tesco, Vodafone, Pfizer and Google have all got into difficulties then your day-to-day problems are likely to be about whether there's any food for your family to eat rather than fretting about the value of your investments! Or you can put your cash "safely" in the bank and watch it shrink...
Personally I do not believe that equities (stocks & shares) are high risk over the medium/longer term. At the end of the day if BP, Tesco, Vodafone, Pfizer and Google have all got into difficulties then your day-to-day problems are likely to be about whether there's any food for your family to eat rather than fretting about the value of your investments! Or you can put your cash "safely" in the bank and watch it shrink...
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