investing in octopus

Myrmidon_J

crispy1955 wrote:

... the charges per annum are estimated at 2.3% this includes annual payment to IFA...

How much is the IFA taking?
What can you expect in terms of ongoing servicing?

Linton wrote:

Are you really sure you want to put 75% of your retirement fund, assuming it is reasonably meaty and a sizable proportion of your spare wealth, into a single investment? A range of different and unrelated funds would give some protection against economic storms.

I absolutely agree. If it were my money, I'd invest in a far more balanced portfolio and keep a large cash reserve...

dunstonh

2.3% is more than double a stakeholder (typically 0.9-1%) and for many people a modern personal pension would come in around 0.6%-0.7%. The HL option mentioned above is typically 1.5% although a similar portfolio set up via an IFA would be 1.25-1.5%.

That doesnt make 2.3% bad as higher risk investments in specialist areas do usually cost more. However, do you think the level of risk being taken for the amount of the portfolio involved is a good idea?

LongTermLurker

dunstonh wrote: »

2.3% is more than double a stakeholder (typically 0.9-1%) and for many people a modern personal pension would come in around 0.6%-0.7%.

wondered when you'd come along

Don't think he was looking at pensions though - mentioned ISAs?

The HL option mentioned above is typically 1.5% although a similar portfolio set up via an IFA would be 1.25-1.5%.

That doesnt make 2.3% bad as higher risk investments in specialist areas do usually cost more. However, do you think the level of risk being taken for the amount of the portfolio involved is a good idea?

HL do annual discounts though.

Allianz RCM BRIC AMC 1.425% after rebate
BR Gold & General AMC 1.425% after rebate
Invesco Perp Japan Smaller Companies 1.25% after rebate

How high risk and specialised do you want to go??? I think £1725 AMC for some guy to say "stick most of your money in one fund" is ludicrously expensive.

Incidentally, HL offer a couple of Octopus funds and they both charge a performance fee of 20% over libor :eek:

edit - They have a few VCTs as well including a couple of octopii - http://www.h-l.co.uk/investment-services/venture-capital-trusts/current-offers

dunstonh

Don't think he was looking at pensions though - mentioned ISAs?

Good spot. I had just come off a couple of pensions thread and had those on my mind

LongTermLurker

dunstonh wrote: »

Good spot. I had just come off a couple of pensions thread and had those on my mind

You'd have been right though then - HL don't give AMC rebates on pensions, so he would get the full charge - it's still a long way off 2.3% though. While it could be argued OP is paying for advice, it hardly sounds good advice on the face of it.

crispy1955

thanks for all your replies, its not looking good is it ? just to confirm we are all talking about the same product this is the link octopusinvestments.com/products/opm.html the annual fee to the IFA is 0.5%.
thanks again
as im new I cant post links so its the above with the www.

crispy1955

crispy1955 wrote: »

thanks for all your replies, its not looking good is it ? just to confirm we are all talking about the same product this is the link octopusinvestments.com/products/opm.html the annual fee to the IFA is 0.5%.
thanks again
as im new I cant post links so its the above with the www.

Features and Benefits

Octopus Portfolio Manager constructs a set of investments that is closelyaligned to your investment profile as determined by you and your adviser. It gives you access to a wide range of investment funds and experienced fund managers, within a single managed portfolio structure.
Octopus Portfolio Manager uses an approach that provides diversification of your investment portfolio, meaning you spread your money across many different funds and reduce the impact of any particular fund underperforming
Octopus Portfolio Manager reviews your portfolio of investments on a regular basis, and can adjust where your money is invested to ensure it stays invested in funds that match your needs. It gives you the peace of mind that your money is invested in the right place, working hard to provide you with consistent returns, without the costs traditionally associated with such a personalised service.
We offer you a choice of ways to invest within Octopus Portfolio Manager, including a SIPP and ISA, along with clear, straightforward and detailed reporting and communications, so you always know where your money is and how your investments are performing.
Ultimately, Octopus Portfolio Manager is designed to be flexible, tax efficient and able to evolve with you as your requirements change. It has been created to offer a lifetime solution to your investment needs

LongTermLurker

crispy1955 wrote: »

thanks for all your replies, its not looking good is it ? just to confirm we are all talking about the same product this is the link octopusinvestments.com/products/opm.html the annual fee to the IFA is 0.5%.
thanks again
as im new I cant post links so its the above with the www.

er no, we weren't - I must admit, forums do tend to build on assumptions sometimes and I followed on from previous comments about Venture Capital Trusts and single funds.

What you are being offered is neither of those, it's a managed service based on a number of multi-manager funds. Thus someone has picked a number of different funds, grouped them together in similar-type bunches and sell them as packages. Octopus also say they will monitor your portfolio and if your high-risk investments start to grow disproportionately, they will reduce them to prevent your portfolio becoming unbalanced - I would take that "monitoring" approach with a certain amount of salt, but basically that all explains why you are paying a premium to have it managed. I'm not saying that's a bad thing, it depends whether you have the time or inclination to do your own research and buy cheaper - would you do a DIY job at home or pay a tradesman to do it for you?

I guess one element of what you have above is an "Active Managed" fund - Jupiter Merlin Growth is an example which would cost you 1.25%pa if you bought it from HL http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/j/jupiter-merlin-growth-portfolio-accumulation - or balanced managed http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/j/jupiter-merlin-balanced-portfolio-accumulation

Or the Aberdeen MM one at 1.5%pa http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/a/aberdeen-multi-manager-equity-managed-accumulation

You'll see from those three that they each invest in different funds, meaning you get instant diversity, though you pay for that diversity. In short, you could choose a number of varied managed funds with good reputations for less than the Octopus option. Each Multi Manager will balance their own set of funds on a regular basis, but it would be down to you to balance the overall portfolio over time.

A cheaper approach still would be to research and buy a number of individual funds, but the multimanager approach could be an easy option with a fairly modest and stable return - you won't see any of them going into orbit.

Dopple

Don't put all your tenticles in one basket.

crispy1955

thanks everyone, as I said I dont know much about investing but you have all made me think more about it, I think I will reduce the amount and look into maybe a fixed rate for the rest, never had this much money before and probobly never will again so I want to be carefull and try to make it last.