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Kind of fortunate (definitely) situation here.
My mum died last year - left behind a decent amount (out of all proportion to her way of living, I guess that's the key - she wouldn't give the appearance of someone comfortably off - used to colour in carpets with felt tip pen rather than replace them).
Anyway, it prompted me to think about our lives, our pensions, and what to do with the amount mum left behind. Trot along to local IFA who had done good things for mum. Next thing I know, I'm getting a bit of a sell about their preferred choice of investment fund, rather than fund manager, and a bit of a sell to sell up our pensions with one provider and put them into their choice of funds. All seems a bit wary to me, and makes me question if I just like having control.
Our pensions are currently in a SIPP (self mangled, seems OK), and some shares with a manager in Glasgow. Mum's shares are with a manager in London.
Obviously I don't know how to judge the ultimately competing views on tracker funds, active funds and relatively passive or program funds. Which is part of it. Then the idea of switching pensions is another step of "hang on" that I'm instinctively wary of.
Bt I don't then know who to turn to for meta -advice as most folk in the industry will realistically be of one or other camp. I guess I can ask to pay them for advice rather than switch / commission funded.
There is no right choice.
With your IFA, I would ask for a list of all fees for their recomended products and then compare them with your SIPP etc.
Personally I manage my own, just buy a mix of managed / tracker funds and hold them in a low cost SIPP and wait for 20 years...
The two sources I tend to look towards are the ukpersonalfinance sub on reddit and the meaningful money podcast.
Those should start your research into what's best for you. Bear in mind what's best for me may obviously not be best for you.
General investment (>5yr horizon) advice is stick money in a low cost, diversified index tracker such as vanguard at 0.22%, preferably in a S&S isa wrapper.
1. Diversification is good, so leaving different pots of money with different managers/vehicles or whatever makes sense.
2. Rock bottom fees is key. The old 2 and 20 fee model is ludicrous for a lot of what is offered (systematic, automated, well-established investing strategies).
3. Investing 101 strategy of "risk parity" (equal exposure to long equities and long bonds) is a good starting point. Should be able to get that for fractions of a percent fee per year, and no performance fee. This is the sort of thing that cheap tracker funds offer.
4. If you want to get adventurous, and you already pay a lot of income tax, the EIS and SEIS schemes make it attractive to invest in small companies.
There is no right choice.
Very much this. My nephew is our IFA & even he doesn't 'tell' us what to do. He 'advises' on risks vs loss/gain & we make the choices. (He does have the authority from us to move money around though)
Check they really are fca registered
https://register.fca.org.uk/
Make sure you understand all management and commission charges and their long term impact on your holdings. Really do this.
Check out other ways of paying an ifa and compare their impact with that of long term commission.
Look at the funds they are trying to sell you/you are invested in and compare how they have done in comparison to the market/ other funds in the same market area/type
https://www.trustnet.com/
http://www.morningstar.co.uk/uk/
Other websites are available
Companies like Hargreaves Lansdown allow you to self invest, provide a range of prebuilt managed funds and do some fixed interest cash stuff now as well(as do quite a few other companies)
Review your decisions and each fund performance at least annually (and keep an eye on how taxation changes will impact decisions)
Edit - if your are over ?50not sure have a look at pensionwise you get a free consultation and in my case the bloke was knowledgeable.
Brewin Dolphin in Glasgow. Extremely good fund managers.
Brewin Dolphin in Glasgow. Extremely good fund managers.
Definately. My Dads cousin was a bank manager & they looked after his investments with VERY profitable results!
The key to good financial advice is all about the planning not just making investments.
What are you likely to want to do with the money and when. What else have you got in terms of insurance, assets, liabilities etc.
All of this depends hugely on your situation and needs tailoring. Once you got that sussed, and know how much you have to invest for how long and critically how much you can afford to lose the. I would suggest looking at investments.
Firms like Brewin Dolphin more recently do a lot of work with models, where a decent research team justify a strategy which a discretionary investment manager will charge you ~1.1% to invest in. Typically similar or even the same can be purchased on an execution only basis, i.e. you self invest, for a fraction of the cost (in terms of ongoing charges).
I work in 'wealth management' (not as an investment expert) and get a 'staff' rate on services yet have chosen to go execution only with Vanguard, mostly in trackers. If I was aggressively seeking growth I would probably hold a number of investments in single companies, again with me managing it, but I'm comfortable sitting back and letting typical market growth happen and take whatever I get over the course of a few years, without losing big chunks of the potential gains to someone in the middle.
In terms of good advisors (and to be more helpful than my reply above) you can ask what qualifications they have, and for examples of what they have done for other clients.
I really suggest speaking to at least 3 people to get a feel for them. As well as your local guy can try a couple of national firms maybe.
Big firms do huge amounts of analysis in the background which is a plus, but I wouldn't assume all their investment managers pay much attention to it. It is still an industry where big knobs will stick money in FTSE 250 firms because their clients are familiar with the names as it is easier.
cheers all. There's obviously anxiety to get it 'right' - consequences of failure not good - it's a bit difficult as we're pretty rural, so limited easy choices. The local guys are qualified - that's not in doubt - and competent - as long as they're not following the script of products, I'll be visiting again.
They were part of Brewin Dolphin as it happens, but they shut the office - they're now attached to another more regional outfit.
We did have decent financial planners - worked on a fee basis - but I think they disbanded. Hopefully speak to our fund managers in Glasgow with an open mind as well to get an alternate viewpoint.
Cautious by nature, would rather leave some of the growth to others and preserve the cash that we have.
Plenty to ponder. Appreciate the responses.