IFA advising crisis driven fund switch- thoughts?

[seapod]

After years of almost silence apart from the annual review, my IFA has suddenly sprung into life and is recommending a fund switch for a proportion of my pension, about 25%.

They are recommending a switch from:

Vanguard FTSE UK All Share Index Inc 100%

Vanguard FTSE Developed World Ex UK Equity Index Inc 100%

into

MI Hawksmoor Distribution 100%

Here is their reasoning......: Following on from this and after detailed discussions with the team at Hawksmoor Fund Managers over the weekend, we believe the timing is right to take the opportunity to switch from the pure equity market Vanguard funds into the Distribution fund with Hawksmoor.

At Hawksmoor, the management team will be actively looking for “value” over the coming weeks and months from the global universe of asset markets. The culture of the team at Hawksmoor is to look for investments that try to protect capital, should things worsen still further but to also identify opportunities for value and growth, without simply relying on equity markets bouncing backBold Text


I am sensitive to fees and the fully loaded cost of Hawksmoor , as with the IFA management fee + vantage platform the total for this chunk of pension is circa 2.1%. What is it they are seeing in Hawksmoor that I may be missing? I already have about 7.5% of my pension with Hawksmoor but I haven't seen anything spectacular being delivered to date.

In the interests of full disclosure, I had a conversation with Nik at IM on the 13th March which had been planned long before the current debacle. I am still reviewing the pros of switching to their IM Optimum Growth portfolio. One of my concerns is that the market is so volatile at the moment, I don't feel comfortable being at the mercy of some arcane process to switch, where i have no control over the timing and the precise point I will be out of the market. 9% gain today anyone...!

I appreciate that I would be out of the market anyway if I were to stick with my existing provider while switching from Vanguard to Hawksmoor.

What is the view on Hawksmoor?
And with such volatility, is it crazy to risk being out of the market when in a few months (maybe) we will have a better idea of our future direction?

[Derek Chevalier]

seapod said:

After years of almost silence apart from the annual review, my IFA has suddenly sprung into life and is recommending a fund switch for a proportion of my pension, about 25%.

They are recommending a switch from:

Vanguard FTSE UK All Share Index Inc 100%

Vanguard FTSE Developed World Ex UK Equity Index Inc 100%

into

MI Hawksmoor Distribution 100%

Here is their reasoning......: Following on from this and after detailed discussions with the team at Hawksmoor Fund Managers over the weekend, we believe the timing is right to take the opportunity to switch from the pure equity market Vanguard funds into the Distribution fund with Hawksmoor.

At Hawksmoor, the management team will be actively looking for “value” over the coming weeks and months from the global universe of asset markets. The culture of the team at Hawksmoor is to look for investments that try to protect capital, should things worsen still further but to also identify opportunities for value and growth, without simply relying on equity markets bouncing backBold Text


I am sensitive to fees and the fully loaded cost of Hawksmoor , as with the IFA management fee + vantage platform the total for this chunk of pension is circa 2.1%. What is it they are seeing in Hawksmoor that I may be missing? I already have about 7.5% of my pension with Hawksmoor but I haven't seen anything spectacular being delivered to date.

In the interests of full disclosure, I had a conversation with Nik at IM on the 13th March which had been planned long before the current debacle. I am still reviewing the pros of switching to their IM Optimum Growth portfolio. One of my concerns is that the market is so volatile at the moment, I don't feel comfortable being at the mercy of some arcane process to switch, where i have no control over the timing and the precise point I will be out of the market. 9% gain today anyone...!

I appreciate that I would be out of the market anyway if I were to stick with my existing provider while switching from Vanguard to Hawksmoor.

What is the view on Hawksmoor?
And with such volatility, is it crazy to risk being out of the market when in a few months (maybe) we will have a better idea of our future direction?

Hawksmoor are a great steak house but I've not heard of them as a fund manager.

"At Hawksmoor, the management team will be actively looking for “value” over the coming weeks and months from the global universe of asset markets."

This is something that is out of the mid 90s pitchbook. Sounds plausible but realistically nigh on impossible to actually do.

2.1%pa is toppy, especially for a postman style service (delivering annual fund reports) but unfortunately all too common.

[mikeiow]

Sounds to me like a perfect time to ditch your distant IFA entirely, tbh.

If they were doing their job, they might have been proactively seeking decent partners, such as you describe, ahead of any crisis....not in the middle of it.
Contacting you now smacks very firmly of a finance organisation preying on FUD (fear, uncertainty, doubt) in their customer base, in order to take some extra percentage points (which you have luckily spotted) from your probably already depleted pot.

The current crisis WILL come to an end.
Things WILL pick back up in time, and I’m guessing they hope to come back in 12 months and say “look, didn’t we do well?”, when in all likelihood the market as a whole will probably have picked up. & no, I have no crystal ball....it could take anything from 6 to 30 months, but the point remains the same.

In your shoes, this would really force me to ditch them and move to IM. & no, I am not paid a penny by them (although hope to see some racing with them later in summer!!) - you know how genuine they are for yourself.

I would personally chose to split a large pot between the one you describe and the PHequity fund, just because I like the cut of it’s jib .
I also wouldn’t agonise over how it might be out of the market for maybe a week: right now you are as likely to gain from that as lose, IMHO. Maybe move a portion first if that helps spread the burden.

Clearly these have to be your decisions, but the facts you have posted have clearly raised firm doubts in your own mind.
Good luck!

[Derek Chevalier]

Derek Chevalier said:

seapod said:

After years of almost silence apart from the annual review, my IFA has suddenly sprung into life and is recommending a fund switch for a proportion of my pension, about 25%.

They are recommending a switch from:

Vanguard FTSE UK All Share Index Inc 100%

Vanguard FTSE Developed World Ex UK Equity Index Inc 100%

into

MI Hawksmoor Distribution 100%

Here is their reasoning......: Following on from this and after detailed discussions with the team at Hawksmoor Fund Managers over the weekend, we believe the timing is right to take the opportunity to switch from the pure equity market Vanguard funds into the Distribution fund with Hawksmoor.

At Hawksmoor, the management team will be actively looking for “value” over the coming weeks and months from the global universe of asset markets. The culture of the team at Hawksmoor is to look for investments that try to protect capital, should things worsen still further but to also identify opportunities for value and growth, without simply relying on equity markets bouncing backBold Text


I am sensitive to fees and the fully loaded cost of Hawksmoor , as with the IFA management fee + vantage platform the total for this chunk of pension is circa 2.1%. What is it they are seeing in Hawksmoor that I may be missing? I already have about 7.5% of my pension with Hawksmoor but I haven't seen anything spectacular being delivered to date.

In the interests of full disclosure, I had a conversation with Nik at IM on the 13th March which had been planned long before the current debacle. I am still reviewing the pros of switching to their IM Optimum Growth portfolio. One of my concerns is that the market is so volatile at the moment, I don't feel comfortable being at the mercy of some arcane process to switch, where i have no control over the timing and the precise point I will be out of the market. 9% gain today anyone...!

I appreciate that I would be out of the market anyway if I were to stick with my existing provider while switching from Vanguard to Hawksmoor.

What is the view on Hawksmoor?
And with such volatility, is it crazy to risk being out of the market when in a few months (maybe) we will have a better idea of our future direction?

Hawksmoor are a great steak house but I've not heard of them as a fund manager.

"At Hawksmoor, the management team will be actively looking for “value” over the coming weeks and months from the global universe of asset markets."

This is something that is out of the mid 90s pitchbook. Sounds plausible but realistically nigh on impossible to actually do.

2.1%pa is toppy, especially for a postman style service (delivering annual fund reports) but unfortunately all too common.

I've done some digging and think it's this

https://www.hawksmoorim.co.uk/how-can-we-help-you/...

https://www.hawksmoorim.co.uk/wp-content/uploads/2...

Assuming I've got it correct it's returned around 27% over the last 7 years (for their D fund which seems the cheapest, so I'm being as generous as possible).

I think it's worth asking your IFA to benchmark this against an a Vanguard portfolio containing a mix of equity and bonds and ask him how successful they have been in their hunt for value over the last 7 years (launched in April 12). What does he think will be different going forward.

Some interesting fund names in there

High Yield Bonds
Convertibles
Credit Opportunities
Equity Income
Emerging markets bond
Dividend Champions

[JulianPH]

Derek Chevalier said:

I've done some digging and think it's this

https://www.hawksmoorim.co.uk/how-can-we-help-you/...

https://www.hawksmoorim.co.uk/wp-content/uploads/2...

Assuming I've got it correct it's returned around 27% over the last 7 years (for their D fund which seems the cheapest, so I'm being as generous as possible).

I think it's worth asking your IFA to benchmark this against an a Vanguard portfolio containing a mix of equity and bonds and ask him how successful they have been in their hunt for value over the last 7 years (launched in April 12). What does he think will be different going forward.

Some interesting fund names in there

High Yield Bonds
Convertibles
Credit Opportunities
Equity Income
Emerging markets bond
Dividend Champions

Hi mate

Erm, the factsheet you link to states 90.4% return since launch (8 years ago next month).

I'm not sure where you have got the 27% over 7 years figure from?

The D class has a minimum investment of £30m, so I am guessing this won't apply for 25% of the OP's pension!

I completely agree that it is extremely expensive for what it is.

[55palfers]

Forgive my lack of knowledge here, but exactly what does the phrase "the management team will be actively looking for “value” " actual mean please?

It comes across as previously they've been sitting on their hands??

[anonymous-user]

You're paying the IFA to advise you. Either follow the advice or ditch the adviser. No point buying a dog and barking yourself.

By the way, any adviser who was putting 25% in one place wouldn't be my adviser at all.

[bmwmike]

rockin said:

You're paying the IFA to advise you. Either follow the advice or ditch the adviser. No point buying a dog and barking yourself.

By the way, any adviser who was putting 25% in one place wouldn't be my adviser at all.

+1 on both points. I don't have an IFA and there is nothing in this thread that makes me think I'm missing out.

[Robert-q32ja]

Folks we only have a limited amount of detail.

The first observation is that you are being encouraged to move from 100% equity funds (probably seen as high to very high risk) to a mixture of assets (that I suspect are rated as medium risk), so you need to understand what were you investing in and what is the proposed plan now.

What is your actual risk profile? If you are a 'medium risk' then this move might be the right sort of strategy, but no idea where everything else is.

The selection of that particular fund is not what I want to comment on - there are loads of balanced/medium funds to choose from.

Also moving now, while markets are 15-40% down to a fund that may have only lost 5-10% (because of the lower risk nature of the underlying assets) then futures returns or any bounce in value you might be hoping for are likely to me modest.

[Robert-q32ja]

I have just charted all three funds and the performance is not terrably different over last year and 3 years, so maybe new fund is more equity orientated that other distribtuon funds (which normally have lots of high yielding fixed interest assets mixed with higher yielding equities to create the distribution). You need more information on what you have and what is proposed.

[darreni]

The Vanguard stuff is well priced & performs well, just ensure you are in the funds appropriate to your risk tolerance.

The Hawksmoor stuff is not something that our firm would consider using.

[Derek Chevalier]

JulianPH said:

Derek Chevalier said:

I've done some digging and think it's this

https://www.hawksmoorim.co.uk/how-can-we-help-you/...

https://www.hawksmoorim.co.uk/wp-content/uploads/2...

Assuming I've got it correct it's returned around 27% over the last 7 years (for their D fund which seems the cheapest, so I'm being as generous as possible).

I think it's worth asking your IFA to benchmark this against an a Vanguard portfolio containing a mix of equity and bonds and ask him how successful they have been in their hunt for value over the last 7 years (launched in April 12). What does he think will be different going forward.

Some interesting fund names in there

High Yield Bonds
Convertibles
Credit Opportunities
Equity Income
Emerging markets bond
Dividend Champions

Hi mate

Erm, the factsheet you link to states 90.4% return since launch (8 years ago next month).

I'm not sure where you have got the 27% over 7 years figure from?

The D class has a minimum investment of £30m, so I am guessing this won't apply for 25% of the OP's pension!

I completely agree that it is extremely expensive for what it is.

Data from FE - D class is down 24% since the peak, so over last 7 years I see 27% and since launch (May 22) 54%. Factsheet to end of Feb I assume?

[Derek Chevalier]

55palfers said:

Forgive my lack of knowledge here, but exactly what does the phrase "the management team will be actively looking for “value” " actual mean please?

It comes across as previously they've been sitting on their hands??

It's meaningless guff.

[bitchstewie]

So they seem to be suggesting that having taken the "hit" of recent events you now switch into a fund that's arguably a lot more defensively positioned than the one you were in?

[Mr Pointy]

OP: don't rush into anything with the world markets in such a fluid situation. You (like many of us) need to act carefully given the "losses" we are currently experiencing.

Dump your current IFA & get a proper one and/or study the IM sticky thread:
https://www.pistonheads.com/gassing/topic.asp?h=0&...

[Derek Chevalier]

rockin said:

By the way, any adviser who was putting 25% in one place wouldn't be my adviser at all.

I would think the opposite.

I see an enormous number of offerings comprising of >20+ funds where the aim seems to be to give the perception that complexity adds genuine value. You only have to look at how some of these solutions have performed in the current markets to question where the value is.

Given that you can buy a single multi asset fund for buttons it's debatable what additional complexity and costs gives the client.

[55palfers]

Derek Chevalier said:

55palfers said:

Forgive my lack of knowledge here, but exactly what does the phrase "the management team will be actively looking for “value” " actual mean please?

It comes across as previously they've been sitting on their hands??

It's meaningless guff.

Thank you.

Doesn't inspire confidence.

[CharlesElliott]

Assuming you are not close to retirement......

At a high level - you just lost ~30% value by being invested in equities. It makes no sense to switch out of equities at the bottom (maybe) and miss the return in equities over the coming months and years. You will effectively crystalise the loss in one asset and then try to make back a smaller / more stable amount in another asset.

[seapod]

Thanks all, your contributions are much appreciated.

I am going to stick with the current mix, not make a switch to Hawksmoor and then prepare for a wholesale change to another provider in due course.

@JulianPH I would like to request a drive in a GT Car as well as attendance, if 25% of my pot is above £30m !

[Derek Chevalier]

bhstewie said:

So they seem to be suggesting that having taken the "hit" of recent events you now switch into a fund that's arguably a lot more defensively positioned than the one you were in?

Arguably being the key word. Defensive in the investing sense gets overused a lot IMO. Some things you think may be defensive aren't in the slightest and unless you dig you won't find out until it's too late.