Mother has £140,000 to invest

baldbloke_2

steveksullivan wrote:

Having read the above post, particularly those by Baldbloke and Schiff I'm sitting here feeling quite sick ........

I have a similar amount of money, however it's not 'invested' - simply in savings ...... earning me a paltry 4.5 - 5% (before tax!!)

I have been deterred form 'properly' investing my money by two things, prompting two questions:

1. Lack of understanding of where to go to discover how a 'beginner' invests in funds and similar investment products, and how to find the best performers ...... which prompted my second problem/question

2. How do you find a 'good' IFA ..... I have consulted one over a pensions issue .... he has come back nearly a month later saying what he told me a month ago 'wasn't quite right' and there are now further charges ......
Also I cant help but notice that ther seems to be quite a bit of disagreement between IFA's on this site .... I understand that peoples situations vary, but surely IFA's shouldn't be disagreeing over basic advice ...

So a combination of the two .... not knowing how best to invest for myself and not knowing how to find a 'trustworthy' IFA, have lead to my funds languishing for over a year in low paying savings accounts .....

Any help gratefully received !!!!

I can only say what I have done and hope you know when to ignore the experience of someone who knows nothing but is committed to learning.

I think that to go from a non-investor to an all out investor is a difficult decision to make - too many unknowns even with the help of an IFA - unless one has so much money suddenly that the matter was almost taken out of your hands - such as a large lottery win or unknown uncle leaving you his Russian gas company in his will ...

I read bits and pieces on here and elsewhere and then tried to make sense of the info on https://www.morningstar.co.uk which is an excellent site in my opinion. I decided to invest a small amount - my annual ISA allowance for last year and this - in a spread of funds offered by a provider I recognised. Since then I have watched them daily and have them detailed on my 'Money' Programme.

The investment of £6k plus a monthly purchase to continue through the year is enough to keep me interested and anxious to learn more - but similarly a drop in the funds price will not cause me to rush for the window ledge.
It is amazing how having an investment makes you look to compare and contrast your own funds with others and slowly the jargon and statistics make a little more sense. When I am truly comfortable with what I have then I shall start to look around more - and maybe at some stage an IFA would be a wise head to involve. But I want to understand as much as I can before I do that.

I have chosen medium & medium/high risk funds just to get me started and I have to admit that checking the figures daily (& unnecessarily) has added considerably to the pleasure I get from having money put by.

As I say it's the path I've chosen and that's mainly because I did not want to commit too much too soon. I am naturally cautious but, like you, even I was getting frustrated at having to search out endless best-rate Bank & BS accounts and bonds.

Good Luck

steveksullivan

Dont know why, but I always have trouble finding the 'Thanks' link .... but anyway ... Thanks Baldbloke !!! Seems like sound advice to me ......

I will check the links you recommend ..... was your selection as you imply simply because you recognised the provider's name or did u do some other research ? ..... Not sure if you picked up on it but my investment amount is circa £150,000 ..... does that change the view on whether an IFA is needed ..... and if so .... back to my second question ....where do I get good Independent Advice on how to find a good Independent Financial Advisor !?!?!?!?!

baldbloke wrote:

I can only say what I have done and hope you know when to ignore the experience of someone who knows nothing but is committed to learning.

I think that to go from a non-investor to an all out investor is a difficult decision to make - too many unknowns even with the help of an IFA - unless one has so much money suddenly that the matter was almost taken out of your hands - such as a large lottery win or unknown uncle leaving you his Russian gas company in his will ...

I read bits and pieces on here and elsewhere and then tried to make sense of the info on https://www.morningstar.co.uk which is an excellent site in my opinion. I decided to invest a small amount - my annual ISA allowance for last year and this - in a spread of funds offered by a provider I recognised. Since then I have watched them daily and have them detailed on my 'Money' Programme.

The investment of £6k plus a monthly purchase to continue through the year is enough to keep me interested and anxious to learn more - but similarly a drop in the funds price will not cause me to rush for the window ledge.
It is amazing how having an investment makes you look to compare and contrast your own funds with others and slowly the jargon and statistics make a little more sense. When I am truly comfortable with what I have then I shall start to look around more - and maybe at some stage an IFA would be a wise head to involve. But I want to understand as much as I can before I do that.

I have chosen medium & medium/high risk funds just to get me started and I have to admit that checking the figures daily (& unnecessarily) has added considerably to the pleasure I get from having money put by.

As I say it's the path I've chosen and that's mainly because I did not want to commit too much too soon. I am naturally cautious but, like you, even I was getting frustrated at having to search out endless best-rate Bank & BS accounts and bonds.

Good Luck

baldbloke_2

Two quick things.

I compared entry charges and annual charges for a number of providers and analysed - as best I could - the ratings and risks on the morningstar site together with the detailed info provided on the sites of the fund managers themselves.

I must say that if you re looking to dive in with a sum as large as £150k then DO NOT do as I did. I hoped to convey the idea that I was prepared to invest as I did simply because the sums involved were relatively small as a percentage of my savings. I would have sought professional advice for the sum you speak of.
Other posts and threads do give details on how to find an IFA and what to ask upfront when you do find one. Others on here will answer your questions better than I can.

schiff

steveksullivan

I was so concerned about you being upset about some things you had read on this thread (and involving me) that I read it through from start to finish!

Brasso and I are to blame I think (not baldbloke), brasso for going slightly off topic and me for rising to his bait. It was just a diversion on the thread covering the risky way to go about things! (Now I have to make my peace with brasso but I think he'll know what I mean. )

The rest of the thread contains some good stuff. I'm a bit surprised dunstonh hasn't been along - but give him time! If you look for all his posts you'll find mounds of stuff about choosing an IFA (which HAS to be your route) and, in particular, why choosing a new age IFA is better for your pocket.

best of luck! :beer:

dunstonh

Also I cant help but notice that ther seems to be quite a bit of disagreement between IFA's on this site

You rarely see any difference in opinion on this site between the IFAs. I think you are assuming that certain posters are IFAs when they are not. There are quite a few disagreements on tactics in certain scenarios but that is no unusual with investments. After all, its about opinion.

Not sure if you picked up on it but my investment amount is circa £150,000 ..... does that change the view on whether an IFA is needed ..... and if so .... back to my second question ....where do I get good Independent Advice on how to find a good Independent Financial Advisor !?!?!?!?!

£150,000 can mean that you are entering investment bond (onshore or offshore) territory. It can also mean utilising ISAs, some unit trusts and a bond to ensure maximum tax efficiency. Some of the best providers in these need an IFA agency to deal with. Now, someone like Cavendish could do it for you if you knew which one(s) to use but do you know that?

If you avoid salesforce IFAs and ideally look for "new model advisers" who are cheaper and tend to be much more investment focused, then you are on the right track. If an IFA recommends one or two funds, then he/she just isnt investment experienced enough to handle your transaction. £150k would be at least 10 funds.

The rest of the thread contains some good stuff. I'm a bit surprised dunstonh hasn't been along - but give him time!

I'm here finally. Good thread by the way.

New Model Adviser (NMA is it is mentioned on other threads) is the way to go. I am biased as I am an NMA. So need to say that first.

However, NMAs will charge around 1% initial commissio/fee and take 0.5% fund based p.a. This makes them significantly cheaper than old model IFAs that take 7% up front with no performance linked or servicing commission. The charges are the same to you as the 7% involves giving up that 0.5% p.a. to get more upfront. However, with the NMA only taking 1% up front, you typically get a 3-4% rebate on the commission. So, on £150k, an NMA would gift you £4500 which an old model adviser wouldnt.

NMAs focus on funds under management. Thats the business driver for the IFA. Not getting big initial commissions. The incentive is then to keep the funds under managment and make them grow as much as possible as you are getting paid 0.5% of that fund value every year. The more it grows the more the IFA gets paid and of course, the happy you would be. Because the business model is more of an investment focus, the advice in investments tends to be of a higher quality.

It is a win/win scenario for adviser and client. NMAs are in the minority at this time and the business model is suited to smaller more efficient firms. This can make finding an NMA IFA much harder to find. We are gradually increasing in numbers though.

cheerfulcat

steveksullivan wrote:

I have a similar amount of money, however it's not 'invested' - simply in savings ...... earning me a paltry 4.5 - 5% (before tax!!)

I have been deterred form 'properly' investing my money by two things, prompting two questions:

1. Lack of understanding of where to go to discover how a 'beginner' invests in funds and similar investment products, and how to find the best performers ...... which prompted my second problem/question

2. How do you find a 'good' IFA ..... I have consulted one over a pensions issue .... he has come back nearly a month later saying what he told me a month ago 'wasn't quite right' and there are now further charges ......
Also I cant help but notice that ther seems to be quite a bit of disagreement between IFA's on this site .... I understand that peoples situations vary, but surely IFA's shouldn't be disagreeing over basic advice ...

Hi there,

Not everyone who posts on investment is an IFA so I wouldn't worry too much on that count. It is still useful to look at every argument on its merits, regardless of the source.


Just for balance -you do not need an IFA, even for large amounts of money; it is perfectly possible to choose and monitor your own investments, and many people do just that (have a look at the Motley Fool site, in particular the Fool School and the basics of investment area. The discussion boards are full of information too. Incademy has a series of free courses, including one on unit trusts). This does take considerably more time and effort but is IMHO far more rewarding in every sense than the IFA route, assuming that you have an interest in matters financial. Anyone who does not have such an interest would probably be better off with an IFA.

HTH

Cheerfulcat

jem16

steveksullivan wrote:

So a combination of the two .... not knowing how best to invest for myself and not knowing how to find a 'trustworthy' IFA, have lead to my funds languishing for over a year in low paying savings accounts .....

Any help gratefully received !!!!

This was exactly my position 4 months ago. I had a similar amount sitting in a savings account earning approx 2.7% after the tax man got his 40% chunk.

I knew I didn't know enough myself to invest £100k but was wary of being ill-advised as my friend has. However I knew I had to do something and started by asking questions here as you are.

In the end I was fortunate enough to find a trustworthy IFA who took the time to answer all my questions, even the stupid ones! My investment is earning around 15% so far - yes I know it's early days and this could change - so I'm more than happy with the route I took.

schiff

cheerfulcat

In saying to the original poster that he should take the IFA route, I was trying to judge him/her by his/her original comments. These did seem to indicate a lack of experience and a level of nervousness, not really attributes with which to enter the financial world with all its risks and pitfalls.

If however he/she, after due deliberation and self-education, did decide it could be interesting, perhaps he/she could go the IFA route with say £110K to £130K and handle the rest him/her self? He/she certainly has sufficient capital to invest in more than one way.

Lea37

I rarely come across anyone that is satisfied with premium bonds

---

My partner put £6,000 in Premium bonds less than 3 years ago. He won five £50 prizes and then won a whopping £100,000 so I'd definitely say put money in premium bonds! We never expected to win £1000 never mind £100,000 and we only invested a relatively small amount.
I actually came on this thread to get some tips on what to do with the £76,000 we have left (we put £24,000 straight back in Premium Bonds).
Basically, they're great anyway as you don't lose anything and the time it takes to get them out can serve as a deterrant against impulse buying.
There are now two £2 million draws each month now also.

We're in total shock at the moment!

EdInvestor

You may want to dip a toe in the water by trying a bit of DIY with a smallish amount of the money first, to see how you go.There's no rush, take it step by step.

This thread had a lot of helpful information on it about which cheap broker to use, which fund supermarket, and how to find good funds.

http://forums.moneysavingexpert.com/showthread.html?t=177397&highlight=Bestinvest