Any thoughts or experience with SEI?

[Ari]

I've been talking with an independent financial planner about the best thing to do with a fairly sizeable portfolio of investments, currently all run through BestInvest. As far as I can understand it, the main thrust (apart from the usual advice about ISA and trusts and so forth) revolves around putting it all with these guys https://www.seic.com

I'm assured that the IFA gets no commission or kickbacks, they charge me directly annually as a percentage of the total value of the invested amount, and they say that their research has brought them to the door of this company as being the best way forward.

I've had a look on their website of course, and it all looks very impressive, but I have never heard of them and of course have zero experience with them. Just wondered whether anyone had, and what the general thoughts were?

[Mogul]

AFAIK Bestinvest already use SEI as their custodian.

https://www.bestinvest.co.uk/help/legal-and-protec...

Is ‘your adviser’ steering you in the direction of a direct relationship with SEI (because he cannot extract fees from Bestinvest as it is a non-advised platform)?

Not sure what other prospective upside there would be for you to move.

Curious to know how you arrived at holding a large portfolio on Bestinvest?

[Ari]

That's very interesting, thank you.

To answer your question without going into too much personal detail if I may, the investments have been built up over a very long time with a very great amount of input and advice from a close family member. That person is no longer with us and I am at an age where I'd like to start to consolidate it into something that's 'parked' and going to give a regular income over the next (I hope!) circa 25 years. I'm well aware that what constitutes a good investment today may not be next year and almost certainly won't be in 10+ years time, and I'm also well aware that I lack the knowledge to realise what is and isn't a good investment and will only know when it's too late.

What I'm trying to do is work out what the best strategy is at this point, and need some expert help, hence talking to an independent financial advisor, hence this person (having almost made the St James Place mistake previously and realised the importance of someone truly independent). This route has been suggested, but it's certainly not a cheap route, coming as it does with five figure annual fees which I'm okay with, if I feel I'm getting value from them, and the investment is broadly safe (I appreciate that any investment has inherent risks, again hence wanting expert help to try and spread that risk sensibly).

[Mogul]

Makes sense.

If you have inherited a portfolio, it could make sense to have someone review it and help you decide how it could serve you.

It could be a complex portfolio, with many components, built by someone who had strong conviction, but it could also be a bit random with no clear vision.

One way or another, it would be relatively simple to adjust it to suit you.

It just depends on whether you are happy to pay 5-figures pa to ‘manage’ it for you, and/or ‘advise’ you, or if you can find the time to educate yourself and DIY.

You would need to have approx £6m in Fidelity World Index Fund P Accum to rack up £10k pa in annual fees…

Something to think about.

[Ari]

Yes, understand that completely. There's also a strong argument to be made (I understand) for sticking the whole lot into an All World Tracker with minimal fees. I seem to recall Warren Buffet himself offering a wager to any managed fund that could beat it after expenses and no one has.

It's really hard to know what do do for the best, and what I normally do in circumstances where it's important and I have little knowledge is ask/use an expert, which is where I'm at currently, but then how do you then validate that advice (hence the question on here in case anyone had strong views either way)?

It's a very nice problem to have, but a problem none the less.

[Derek Chevalier]

Ari said:

I've been talking with an independent financial planner about the best thing to do with a fairly sizeable portfolio of investments, currently all run through BestInvest. As far as I can understand it, the main thrust (apart from the usual advice about ISA and trusts and so forth) revolves around putting it all with these guys https://www.seic.com

I'm assured that the IFA gets no commission or kickbacks, they charge me directly annually as a percentage of the total value of the invested amount, and they say that their research has brought them to the door of this company as being the best way forward.

I've had a look on their website of course, and it all looks very impressive, but I have never heard of them and of course have zero experience with them. Just wondered whether anyone had, and what the general thoughts were?

Is it this outfit?

https://assetmanagementuk.seic.com/solutions/strat...

Do you know what the costs you are paying for investment management (I'm seeing 1% in some of the factsheets) and platform in % terms?

[Derek Chevalier]

Ari said:

Yes, understand that completely. There's also a strong argument to be made (I understand) for sticking the whole lot into an All World Tracker

I'm not aware of that argument, assuming it's in the context of creating a sustainable retirement income in retirement.

Ari said:

I seem to recall Warren Buffet himself offering a wager to any managed fund that could beat it after expenses and no one has.

Nor this.

[Ari]

Derek Chevalier said:

Is it this outfit?

https://assetmanagementuk.seic.com/solutions/strat...

Do you know what the costs you are paying for investment management (I'm seeing 1% in some of the factsheets) and platform in % terms?

No, not heard of those.

Funds under management annual fee is 0.65%, but I've been told that with platform fees and investment fees expect it to be about 1.7%.

I have no idea whether that's good or bad. I do appreciate that self managing it all through something like BestInvest would of course be a fraction of that cost, but if the result is me losing money by investing in the wrong things (or the right things becoming the wrong things and me being blissfuly unaware until it's too late), then maybe it is a cost worth bearing.

These SEI guys are supposed to be red hot. Arguably, they would say that as they're using them, but equally arguably, they're using them because they believe that they are red hot.

[Ari]

Derek Chevalier said:

Ari said:

Yes, understand that completely. There's also a strong argument to be made (I understand) for sticking the whole lot into an All World Tracker

I'm not aware of that argument, assuming it's in the context of creating a sustainable retirement income in retirement.

Ari said:

I seem to recall Warren Buffet himself offering a wager to any managed fund that could beat it after expenses and no one has.

Nor this.

This is the Warren Buffett one: https://www.investopedia.com/articles/investing/03...

The other one was a YouTube video that was widely discussed on here a couple of years ago, it was very compelling. I did a quick search but couldn't find it for you.

[Derek Chevalier]

Ari said:

Derek Chevalier said:

Is it this outfit?

https://assetmanagementuk.seic.com/solutions/strat...

Do you know what the costs you are paying for investment management (I'm seeing 1% in some of the factsheets) and platform in % terms?

No, not heard of those.

Funds under management annual fee is 0.65%, but I've been told that with platform fees and investment fees expect it to be about 1.7%.

I have no idea whether that's good or bad. I do appreciate that self managing it all through something like BestInvest would of course be a fraction of that cost, but if the result is me losing money by investing in the wrong things (or the right things becoming the wrong things and me being blissfuly unaware until it's too late), then maybe it is a cost worth bearing.

These SEI guys are supposed to be red hot. Arguably, they would say that as they're using them, but equally arguably, they're using them because they believe that they are red hot.

General thoughts:

Fees:

There are (up to) five costs to consider in an ongoing advised relationship.

1. Fund fees
2. Fund transaction fees
3. Discretionary fund manager (DFM) fees
4. Platform fees
5. Adviser fees.

You can buy a globally diversified portfolio for around 0.3% a year (#1 and #2); DFMs (#3) start at under 0.1% (e.g. Timeline), but for many, they are arguably not necessary. #4 and #5 (often) reduce in % terms as the pot gets bigger.

My guess is that your 1.7% a year excludes #2, so I would estimate 2% all in. Broadly similar to SJP on an ongoing basis.

I'd suggest 2% pa is probably typical for the adviser market for the average SJP client level with £175k invested, but less competitive as the pot gets bigger. I'm not sure how big yours is (snigger), but I'd target closer to 1% as you approach seven figures. The majority should be going to the adviser (IMO), as that's where the value should be added.


Investments:

There are very few retail offerings that will outperform a low-cost, globally diversified portfolio, so I'd really question why you'd want to pay more than the 0.3% a year mentioned above. A "red hot" offering is extraordinarily unlikely to be available to us commoners in the retail investment management space!! The eggheads typically run closed shops.

[Ari]

That's really useful, thank you!

low-cost, globally diversified portfolio

I suppose the trick is knowing what makes up a good one of those, and that's where expert advice is presumably helpful, and that's where we came in...

[Derek Chevalier]

Ari said:

That's really useful, thank you!

low-cost, globally diversified portfolio

I suppose the trick is knowing what makes up a good one of those

This is by far the easiest and least consuming part of the retirement planning process. You don't need to pay an adviser to construct this for you.

[Ari]

Okay, any suggestions? Because I honestly don't know where to start with it.

[trevalvole]

Read this: https://www.amazon.co.uk/Smarter-Investing-Simpler...

[Derek Chevalier]

Ari said:

Okay, any suggestions? Because I honestly don't know where to start with it.

To give yourself the best chance of finding an adviser who undertakes genuine financial planning (rather than a traditional investment-focused adviser), I would look at the CISI's (one of the UK professional bodies along with the CII and LIBF) Wayfinder tool.

It contains a directory of advisers holding the CFP qualification (considered the global gold standard of financial planning)

https://www.cisi.org/cisiweb2/wayfinder/home


As they point out, there are no guarantees, but it's where I would start.

https://www.cisi.org/cisiweb2/wayfinder/what-is-fi...

Although we do not guarantee their work, the CFP™ certification can only be used by those who have fulfilled rigorous international standards of financial planning by achieving very specific qualifications and requirements. Every CFP™ professional must commit to high ethical standards, as well as adhere to the CISI’s Code of Conduct, before they can use the internationally recognised CFP™ certification.

[Sheepshanks]

Ari said:

..... I am at an age where I'd like to start to consolidate it into something that's 'parked' and going to give a regular income over the next (I hope!) circa 25 years. I'm well aware that what constitutes a good investment today may not be next year and almost certainly won't be in 10+ years time, and I'm also well aware that I lack the knowledge to realise what is and isn't a good investment and will only know when it's too late.

Are you retired, or looking to retire soon? It's unclear if you're in accumulating or decumulating mode.

[Ari]

Derek Chevalier said:

To give yourself the best chance of finding an adviser who undertakes genuine financial planning (rather than a traditional investment-focused adviser), I would look at the CISI's (one of the UK professional bodies along with the CII and LIBF) Wayfinder tool.

It contains a directory of advisers holding the CFP qualification (considered the global gold standard of financial planning)

https://www.cisi.org/cisiweb2/wayfinder/home


As they point out, there are no guarantees, but it's where I would start.

https://www.cisi.org/cisiweb2/wayfinder/what-is-fi...

Although we do not guarantee their work, the CFP™ certification can only be used by those who have fulfilled rigorous international standards of financial planning by achieving very specific qualifications and requirements. Every CFP™ professional must commit to high ethical standards, as well as adhere to the CISI’s Code of Conduct, before they can use the internationally recognised CFP™ certification.

That's very helpful, thank you. I've just Googled him and it says:

...has gained chartered status and is a fellow of the CII as well as chartered fellow of the CISI

[Ari]

Sheepshanks said:

Are you retired, or looking to retire soon? It's unclear if you're in accumulating or decumulating mode.

At the moment, still working and fully funded through that, so I don't actually need to draw on this money, I want it to accumulate.

But I'd like the option to be able to wind back the business sometime over the next five to ten years so that I'm probably still doing it part time, but have the option to be drawing from this as well, or maybe even instead.

[Cheib]

I use Transact which is a wrap provider, hold ISA’s, SIPP’s, GIA’s and cash all in the same place. You have to go through an IFA to use them but with what I am guessing are the amounts you are talking about you do need some advice….as much about making sure you’re making investments in the most efficient way possible as well as advice on where and how to invest. You can literally invest in any fund, listed equity or bond globally through them.

I’ve used Transct for 20 plus years, used to work in investment management so have seen both sides of the fence. On £1mil Transacts fees will be about 0.25%. They’ve got £50bil plus on the platform, were I think pretty much the first and probably the most consistently profitable (no debt and plenty of cash which is what you want from your custodian). There are cheaper providers of simialr services but they don’t have the financial security/reputation.

Up to you to negotiate with an IFA what they will charge over and above that