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  • FIRST POST
    • jacob.uk
    • By jacob.uk 17th May 17, 8:21 PM
    • 10Posts
    • 2Thanks
    jacob.uk
    so confused after meetings with IFA
    • #1
    • 17th May 17, 8:21 PM
    so confused after meetings with IFA 17th May 17 at 8:21 PM
    I have recently received a very large compensation payment.
    I have sort the advice from an independent Financial advisory and I am left so confused, more confused than ever.
    I spoke to 3 separate companies, as that was the approach I read I should take on here.
    The amount we are looking to invest is in excess of 300k.

    I explained my circumstances that I think I am a Cautious Investor, I am not comfortable with risk at all, Actually I would go as far to say I am a defensive investor and just want to offset losses to inflation.

    Financial Adviser A) produced a report that says that I should invest everything with a Discretionary Fund Manager through a Offshore Bond, he says that the use of the offshore investment bond would provide protection of 90% of the funds held in a long term insurance plan under policyholder protection.
    * He explained that I would be entirely protected under this insurance policy and so if everything went wrong, the most I stand to lose is 10% of my funds.
    That seems to good to be true, I said the same to the FA, I do not understand how any investment that includes investing in stocks and shares can offer protection for 90% of your capital. though he assures me this is the case.

    Financial adviser B) had me in for a free consultation which lasted almost 2 hrs, which was really a fact finding mission for the FA, who at the end told me that to proceed I needed to pay 500 just to see their written advice. There was not even a hint of a suggestion of how I would invest, how much risk and potential gains / losses to expect as a cautious investment portfolio

    Financial adviser C) I only spoke to on the phone, lovely lady, who through just discussing my circumstances on the phone, felt that I was a cautious Investor and I should really just consider products that I can access through high street banks, though she suggested spreading my money through various banks to ensure i receive the maximum FSCS through a variety of banks. She felt I should wait until I got my head around receiving such a large amount of compensation and become comfortable with that before making any rash long term decisions.

    Financial Adviser A) seems to good to be true
    B) I am furious that he wasted my time and got me to his office under false pretences, how this was a free consultation I have no idea.
    C) Trustworthy, but is this right for me and should i take a small leap of faith.

    I am more confused and scared than ever of making the wrong choices
Page 2
    • Heedtheadvice
    • By Heedtheadvice 18th May 17, 8:45 PM
    • 396 Posts
    • 187 Thanks
    Heedtheadvice
    You are getting lots of good advice on this thread and for what it is worth I tend to agree with much of it.

    What I glean from your aims is you want safety and hopefully a little growth too over a reasonably long period.

    Diversification ought to be key, not just between cash and investments but also medium and longer term potential returns/losses, investment types, geography, low and higher risk, straight growth and those paying income.
    As has been mentioned, apart from a few accounts with relatively limited amounts, cash currently will lose you money and over ten years that will be significant in real terms. At present cash is probably best IMHO for a bit of smoothing (volatility risk reduction) and immediacy of availability such as will be required from an emergency fund.
    Investment will generally have short term fluctuations of market linked but over the longer term, especially if you have no outside influence causing you to sell at a specific time, you should not only equal but beat inflation.
    If you think you will need the capital in say ten years time as that period approaches, if you find yourself beating inflation, crystallise your gains? If you are up by 20% in real terms you are a winner. All you need to do is accept that you might miss out on further gains and otherwise protected against losses. You may be told not to time the market, I tend to agree, but that might just meet your objective!
    A very 'safe' approach might be your instinct to be cautious, but I agree with Atush about a higher amount in S&S as caution in one area just leaves you open to risks in other areas!

    I am a fan of investment trusts, they are not for everybody but like other investments they are collective and help with diversity which helps with safety. Some of the best historically not only protect capital but also provide increasing income which can be reinvested for even better risk reduction and growth.
    It does sound to me that you do need help and selecting an IFA to give you correct advice is not easy and can be hit and miss (you might do worse than using Dunstonh!) but there are alternatives with good stockbrokers who will advise and manage your investments for you given the amount you have. You may pay a little for this but their gains on your capital should outway that. Those that run ISAs could be best as you will then, over the years, build up the finance within the USA and protect to a degree against capital gains tax should your investments do really well.

    I would not rate much any of the IFA advice you have currently had but that advice e will also depend on the emphasis you have given regarding your objectives. Can seems closest but the original caution you posted later seems to be more relaxed a little when you talk of making some gain.

    Last, but not least, having mentioned quick access emergency funds, also consider the longer term and adding to any pension you may have. Again this will be a sort of diversification!
    • TallGirl
    • By TallGirl 19th May 17, 9:04 AM
    • 4,016 Posts
    • 8,321 Thanks
    TallGirl
    I used an IFA when I got a large sum of money but I'm not a cautious investor so that makes things easier. I drop feed mine into investment funds and put money into my pension have you considered topping up your pension.

    Sounds like for now just stick it all on deposits and premium bonds then learn more this course is excellent and I think it could help you understand investments a lot better it's free too Open University so not biased.

    https://www.futurelearn.com/courses/managing-my-investments


    Take your time, enjoy the financial security this has hopefully brought.
    Save 12k in 17 no 93
    2750/12k
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