Fully managed online pension & ISA

[Jammie Dodger]

Hi all, this is my first post so please go gently with me! I've lurked around for quite a while now and seen some great advice so appreciate any help.

I basically lost touch with my IFA who I have a small pension with. I use Hargreaves Lansdown for my ISAs but am not comfortable picking my own funds and constantly worry about this.

Hargreaves have "ready-made portfolios" and that is right up my street so I was going to move my ISAs to them and thought about moving my pension too.

The only issue though is their charges are nearly 2% a year (1.44% for the adventurous growth portfolio and 0.45% for the platform - I don't have anywhere near the funds to qualify for a cheaper platform rate).

Then, out of the blue last week my IFA got in touch offering me basically the same thing at nearly half the price (1.17%) all inclusive. It does have a "transaction fee" of 1.5% on any money paid in, but I would make that back in two years compared to the Hargreaves charges.

https://acumenifa.md.intelligentmoney.com/

Am I missing something? I've got 25 to 30 years to invest before I take income. What are your thoughts?

Thanks in advance!

[Derek Chevalier]

Jammie Dodger said:

Hi all, this is my first post so please go gently with me! I've lurked around for quite a while now and seen some great advice so appreciate any help.

I basically lost touch with my IFA who I have a small pension with. I use Hargreaves Lansdown for my ISAs but am not comfortable picking my own funds and constantly worry about this.

Hargreaves have "ready-made portfolios" and that is right up my street so I was going to move my ISAs to them and thought about moving my pension too.

The only issue though is their charges are nearly 2% a year (1.44% for the adventurous growth portfolio and 0.45% for the platform - I don't have anywhere near the funds to qualify for a cheaper platform rate).

Then, out of the blue last week my IFA got in touch offering me basically the same thing at nearly half the price (1.17%) all inclusive. It does have a "transaction fee" of 1.5% on any money paid in, but I would make that back in two years compared to the Hargreaves charges.

https://acumenifa.md.intelligentmoney.com/

Am I missing something? I've got 25 to 30 years to invest before I take income. What are your thoughts?

Thanks in advance!

Depending on the size of your investment pot (not sure how large your total investment pot is when combining your "small" your pension is when combined with your ISAs) I would suggest there is a third option - find a decent adviser that will engage with you to undertake some proper financial planning. Your current adviser seems to be offering a transactional based offering which IMO is something that is becoming increasingly commoditized.

I think JulianPH will be able to give a bit more info on the offering.

[JulianPH]

Derek Chevalier said:

Depending on the size of your investment pot (not sure how large your total investment pot is when combining your "small" your pension is when combined with your ISAs) I would suggest there is a third option - find a decent adviser that will engage with you to undertake some proper financial planning. Your current adviser seems to be offering a transactional based offering which IMO is something that is becoming increasingly commoditized.

I think JulianPH will be able to give a bit more info on the offering.

Hi Derek, yes it is all run by Intelligent Money and supported by your adviser. This is my (advised) SIPP company and I use Managed Direct for my ISA account (with the same adventurous portfolio that is in my SIPP) as I don't need any advice on this.

It's all online and does what it say's on the tin basically.

OP - you are not missing anything, it is very similar to what Fiver a Day (GingeR) does using Parmenion, this is just your adviser (Acumen) offering the same sort of thing with Intelligent Money.

The only difference here is that you also have the option of using target dated portfolios that reduce the level of risk/reward being taken as you get closer to wanting to take income (at no extra charge). The 1.5% fee is only applied when you put money in. Switching portfolios is free, as is drawing down income from your pension/SIPP.

Let me know if you need anything else (PM me if you prefer) and check out GingeR's profile on here if you want to compare it to something else (though that would mean changing advisers).

Cheers

[Jammie Dodger]

Thanks Derek and Julian, I was just worried that I could have been missing something as it all sounded a bit to good to be true with the timing and for my personal circumstances.

I had a look at Fiver a Day but it is not currently taking new business. I found that worrying as whilst reasons were given I am not sure why an online service has to be shut down because they are busy.

I also looked at Intelligent Money and feel far more comfortable using them and keeping my old adviser in place.

I think I was worrying over nothing, so thanks again!

[JulianPH]

No problem, and welcome to the forum!

[SiT]

Just been reading a few threads around the same thing, I need to start (too late!) putting some money away for the future but am totally clueless, was hoping something like Fiver A Day or Money Farm would be my answer. Like you say Fiver A Day is currently down and Money Farm got a bit too 'committed' early on so not really sure where else to look - is there anywhere else you would recommend taking a look at?

I want to sideline a chunk of cash each month into something that (hopefully!) will provide some return later down the line, there is a middle length term circa 10 years (when my daughter turns 18) and a longer term circa 30 years (when I turn 65) where I am looking to draw from these funds.

Any advice most appreciated as I literally don't have any idea!

Si

[ringram]

Dont forget the Vanguard lifestrategy funds.
Much more low cost. Just pump the cash as and when into the one fund that suits. If your circumstances change you can switch funds or just start a new one up.

I dont see any value add for an IFA other than to tell you to stop being retarded. But if you can control yourself and act rationally they offer nothing you cant do yourself. After all, at one point they were clueless oiks too!

[Ginge R]

Jammie Dodger said:

Thanks Derek and Julian, I was just worried that I could have been missing something as it all sounded a bit to good to be true with the timing and for my personal circumstances.

I had a look at Fiver a Day but it is not currently taking new business. I found that worrying as whilst reasons were given I am not sure why an online service has to be shut down because they are busy.

I also looked at Intelligent Money and feel far more comfortable using them and keeping my old adviser in place.

I think I was worrying over nothing, so thanks again!

Hi,

I’m glad you have a solution. Fiver isn’t currently not taking on new clients as it is still, essentially, an advised service that requires input from me that I can’t dilute.

It is distinct from the likes of Hargreaves and Nutmeg which have their strengths and other facets, but which aren’t advised. If Fiver wasn’t advised, it would be ‘live’. As one or two people will be aware, my hands are full with other matters, and I simply do not have the opportunity, capability or the intent to get it going again until I have more time and focus. The funds are still being run and managed as normal. In fact, I manually submitted a £20,000 ISA into it this morning.

Funnily enough, I have a meeting at the regulator the week after next in order to allow me to brief one or two people on the events which have absorbed me for the best part of the past five months or so (Julian will know what I’m talking about, who would have thought where it would have lead?). At the end of a convo I had with my point of contact there, I was told “Oh. Whilst you’re here, we can give you some interim feedback about the robo advice thematic review if you like”. I had completely forgotten about *that*!

[JulianPH]

Ginge R said:

Hi,

I’m glad you have a solution. Fiver isn’t currently not taking on new clients as it is still, essentially, an advised service that requires input from me that I can’t dilute.

It is distinct from the likes of Hargreaves and Nutmeg which have their strengths and other facets, but which aren’t advised. If Fiver wasn’t advised, it would be ‘live’. As one or two people will be aware, my hands are full with other matters, and I simply do not have the opportunity, capability or the intent to get it going again until I have more time and focus. The funds are still being run and managed as normal. In fact, I manually submitted a £20,000 ISA into it this morning.

Funnily enough, I have a meeting at the regulator the week after next in order to allow me to brief one or two people on the events which have absorbed me for the best part of the past five months or so (Julian will know what I’m talking about, who would have thought where it would have lead?). At the end of a convo I had with my point of contact there, I was told “Oh. Whilst you’re here, we can give you some interim feedback about the robo advice thematic review if you like”. I had completely forgotten about *that*!

Hi Al, good luck in getting the FCA to actually take some action on that. For those who don't know Al (Ginge R) is being quite modest, he has been helping British Steel workers who have be subjected to 'alleged' pension scams.

[JulianPH]

SiT said:

Just been reading a few threads around the same thing, I need to start (too late!) putting some money away for the future but am totally clueless, was hoping something like Fiver A Day or Money Farm would be my answer. Like you say Fiver A Day is currently down and Money Farm got a bit too 'committed' early on so not really sure where else to look - is there anywhere else you would recommend taking a look at?

I want to sideline a chunk of cash each month into something that (hopefully!) will provide some return later down the line, there is a middle length term circa 10 years (when my daughter turns 18) and a longer term circa 30 years (when I turn 65) where I am looking to draw from these funds.

Any advice most appreciated as I literally don't have any idea!

Si

I looked at the latest accounts for Money Farm - Turnover = £167,682 with costs of £6,548,837 leaving a loss of minus £6,367,998!!!

So then I looked at Nutmeg - Turnover = £2,556,406 (sounds good), but costs of £11,937,856 and a loss of £9,347,751 for the year!

I saw Scalable Capital come up in the add results - Turnover = £5,002! Costs = £1,436,144! The only thing with any scale seems to be is it's losses!

Are any of these new robo-adviser firms actually going to survive?

[bitchstewie]

When I was reading up on what to do with my small pot I read this https://www.scmdirect.com/fintech-financial-fantas...

[JulianPH]

bhstewie said:

When I was reading up on what to do with my small pot I read this https://www.scmdirect.com/fintech-financial-fantas...

I had seen, but forgotten, that! I think that was the start of my search...

I laughed out loud at ‘the company may require further cash injections to continue to develop and market its product offering and to build its customer base and its assets under management’. It has now had over £100m injected into it!!!

[Jammie Dodger]

SiT said:

Just been reading a few threads around the same thing, I need to start (too late!) putting some money away for the future but am totally clueless, was hoping something like Fiver A Day or Money Farm would be my answer. Like you say Fiver A Day is currently down and Money Farm got a bit too 'committed' early on so not really sure where else to look - is there anywhere else you would recommend taking a look at?

I want to sideline a chunk of cash each month into something that (hopefully!) will provide some return later down the line, there is a middle length term circa 10 years (when my daughter turns 18) and a longer term circa 30 years (when I turn 65) where I am looking to draw from these funds.

Any advice most appreciated as I literally don't have any idea!

Si

My adviser made a big deal about how I could let family and friends know about this (that was one of the things that put me off originally).

So you could use it if you wanted. I have to say I am impressed so far, everything actually is online and I called them today simply to check someone was there (after moving one ISA to try it). Call answered by a human who confirmed everything.

Perhaps I need to stop being so cynical, but better safe than sorry in my book.

Thanks again for everyone's help. Much appreciated.

[Jammie Dodger]

Thank you everyone, I'll stick with my adviser and Intelligent Money. It seems safer.

[anonymous-user]

Jammie Dodger said:

Thanks again for everyone's help. Much appreciated.

A word to the wise. There's one person who pops up on here being "helpful" when a new name arrives with money to invest....

If you follow the main forum posts for a while you should soon get the hang of the basics from successful DIY investors who participate. Some of them are very experienced. Also some of the professionals are helpful while others write long sentences that don't say very much in the hope of netting an inexperienced fish.

One more point. You can IMO usefully stop reading any thread as soon as you encounter the words "Bitcoin" or "Buy-to-let"!

[Derek Chevalier]

bhstewie said:

When I was reading up on what to do with my small pot I read this https://www.scmdirect.com/fintech-financial-fantas...

Was listening to podcast the other day where it talked about Wealthfront moving to an active model charging 50bps

https://www.wired.com/story/beware-roboadvisors-we...
https://www.pragcap.com/wealthfronts-risk-parity-f...

maybe that's the only way to raise margins sufficiently to turn a profit (ambitious?)

[bitchstewie]

Derek Chevalier said:

Was listening to podcast the other day where it talked about Wealthfront moving to an active model charging 50bps

https://www.wired.com/story/beware-roboadvisors-we...
https://www.pragcap.com/wealthfronts-risk-parity-f...

maybe that's the only way to raise margins sufficiently to turn a profit (ambitious?)

That wealthfront article is interesting.

If anyone offered me the opportunity to put my money into "an internal “risk parity” fund, which in turn is invested mostly in complex derivatives known as total return swaps" I literally wouldn't have a clue what they were selling me.

Perhaps that's my lack of understanding, but when their whole model is pretty much "Just set your risk level and trust us" that would concern me personally.

[Jammie Dodger]

bhstewie said:

Derek Chevalier said:

Was listening to podcast the other day where it talked about Wealthfront moving to an active model charging 50bps

https://www.wired.com/story/beware-roboadvisors-we...
https://www.pragcap.com/wealthfronts-risk-parity-f...

maybe that's the only way to raise margins sufficiently to turn a profit (ambitious?)

That wealthfront article is interesting.

If anyone offered me the opportunity to put my money into "an internal “risk parity” fund, which in turn is invested mostly in complex derivatives known as total return swaps" I literally wouldn't have a clue what they were selling me.

Perhaps that's my lack of understanding, but when their whole model is pretty much "Just set your risk level and trust us" that would concern me personally.

Should I be worried about this? I have no idea what it means either.

[bitchstewie]

Jammie Dodger said:

Should I be worried about this? I have no idea what it means either.

This is of course a personal opinion but if I'm handing someone my money I want to have some idea what they're doing with it.

I'm a little uncomfortable with the idea of just answering a few questions and being given a risk level but having no idea where my money has actually gone.

On the other hand if you go look at something like Fundsmith it makes sense what they're doing with your money so for me personally I "get it" more, probably just because it's simpler for me to understand

Like I said, just a personal opinion and I say that after a couple of months trying to understand what to do with my ISA allowances.

[JulianPH]

Jammie Dodger said:

Should I be worried about this? I have no idea what it means either.

No, this is a completely different company in America.

What your adviser is offering you is an actively managed portfolios of ETF/Index Trackers, nothing like what that American company is now doing.