Unsure what to do!

Learner_3

I have a lump sum to invest of around £150k and have had advice from an IFA and from the Nat West. The advisor from the bank suggests I invest in bonds, commercial 33% and the rest in another one which tracks the best fund managers. The IFA has been a little vague but mentioned fidelity and said we could look closer when I agree to invest with him. I know this type of question is often asked but I am struggling to decide what to do for the best. I am 38 and a basic rate tax payer, married and my attitude to risk is about 5 or 6 out of 10. Can anyone help please?

ReportInvestor

What is the purpose of this investment? A retirement nest egg?

By "bonds,commercial" do you mean corporate bonds? Is the purpose of this section of the portfolio to generate income or to balance the equity section?

Learner_3

The purpose is simply to make it grow as quick as possible so I can retire sooner rather than later. I don't have a mortgage and no debt and would like to be able to take a job that's less pressurised. As to what kind of bond, if i'm honest i'm not sure, but he tells me it's with the Norwich Union and that commercial property investment has recently performed well. I'm not up to speed on investments and don't really understand the market place. Have you heard of this product which follows the best fund managers, and do you think it's any good?

ReportInvestor

Given the aims you stated, I'm relieved that he's gone for commercial property - not corporate bonds.

Although commercial property has recently had a good run, it still has a place in a balanced portfolio and it can perform well when shares are doing less well.

oldfella

make sure you understand the costs - "tracks the best fund managers" usually have an additional layer of costs - one from the fund, one from the provider

Mike

Learner_3

The advisor tells me there are no set up costs and an annual charge of 1.5%. There are also penalties if I take my money out in the first 5 years on a sliding scale. Does this sound like a reasonable investment for growth?

ReportInvestor

Is there an initial charge (or bid/offer spread)?

Will the advisor rebate any of this back to you?

There may also be a "trail commission" to the advisor (e.g. 0.5% pa out of the 1.5% charges). If so will he / can he rebate any of that back to you?

dunstonh

I have a lump sum to invest of around £150k and have had advice from an IFA and from the Nat West.

Natwest have IFAs? When did that start?

Indeed, I can find a couple of holes in this which suggests that the adviser you are seeing is not an IFA but a tied salesman.

1 - Norwich Union, whilst being a very good product and 3 months ago being amonst the lowest charged, recently stopped a special offer the moved them below L&G and Clerical Medical on the charging front. Both of those two have similar funds so at this moment, there is no reason to recommend NU.

2 - Natwest are tied to Norwich Union for provision of investment products. What has your "IFA" recommended? NU.

Banks do not operate IFAs unless it is through their high net worth arms and then you pay massive charges for the benefit.

You need to see an IFA, not someone pretending to be an IFA.

Learner_3

We seem to have got our wires crossed. I have seen an IFA and also an advisor from the NatWest. The NatWest advisor has provided the portfolio which consists of the Norwich Union products but the IFA has not yet advised in detail on anything. In a nutshell I am am cautious about trusting anyone with my money but I do realise that at some point I will have to. Would you steer me away from the NatWest advice?

oldfella

The advisor tells me there are no set up costs and an annual charge of 1.5%.

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ask him if there are hidden costs in that the funds have already deducted 1.5% for their fees ?

Would you steer me away from the NatWest advice

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well I wouldnt buy investments from a bank - because of the high charges

Mike
Mike

cheerfulcat

Learner wrote:

In a nutshell I am am cautious about trusting anyone with my money but I do realise that at some point I will have to.

You don't have to. You can invest your money perfectly well by yourself; it just takes more effort.

I would suggest you stay well away from bank employees' advice as it is very unlikely to be the best for you.