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Worth seeing an IFA?

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  • fairleads
    fairleads Posts: 595 Forumite
    jamesd wrote: »
    I didn't forget to include the AMC. The returns used are after fund charges, as normal when quoting fund returns, except the commission paid to the adviser portion that I split out so I could report it.

    I didn't split out the charges on the savings account either, just reported the interest paid to the customer.

    So a person who invests a total of 65k can expect to receive 65k (minus 326 IFA fees) in their pocket after 10 years?
    Further, the growth rates you mention imply that the gross rate of return that one could reasonably expect over 10yrs would be 7-9% plus inflation of say 3.5% plus amc of say 1.5%. Sadly not true. and therefore again misleading
  • dunstonh
    dunstonh Posts: 119,623 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I was speaking to a couple recently who said, "Oh, we tried the stock market, but one day we checked our investments - and we're glad we did - and 30% of the money had gone! Well, we got the rest out as quick as a flash, and we won't be "investing" there again!"

    I've seen that so many times over the years. They probably invested above their risk profile and without a clue what they were doing. Because of that, they will probably not invest again and suffer shortfall risk and inflation risk in future.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • fairleads
    fairleads Posts: 595 Forumite
    jamesd wrote: »
    Only if they had no investment growth at all.

    And, conveniently, no amc - which is misleading.
    Further, real returns of 7-9% have been anything but readily achievable. And probably less so in the future.
  • oldtoolie
    oldtoolie Posts: 750 Forumite
    If you don't want to spend much time with it the simple way is to put what you have in an NS&I inflation linked bond. This will take an hour or two. Then open an ISA account with with a fund supermarket and set-up a direct debit to feed into a a UK index tracker fund. This might take a bit more time depending on how much time you spend researching which providers to use. Then you are done for the year. Next ISA year, pick out a different index tracker for the USA, Europe or the developing world. Do the same each year. Job done, requiring about 10 hours to get started and no more than two hours each year after that.
  • dunstonh
    dunstonh Posts: 119,623 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Then open an ISA account with with a fund supermarket and set-up a direct debit to feed into a a UK index tracker fund.

    Although be wary that this option is only cheap for another year or two.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • DiggerUK
    DiggerUK Posts: 4,992 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    ....
    ...I think this and Isa's would be my best option but to be frank I'm really not sure I can be arsed. For the little gain in interest from either of these tax free options I just don't see the point. A few hundred quid just doesn't seem worth it. Persuade me otherwise if you can...

    If you are holding ready cash only option is to put it were you get some interest i.e., Isa or PB's.
    PB's do same with a bit of fun thrown in, that's all.

    Only savings strategy that works sensibly, is to match inflation with something on top. Not a great deal of choice at moment, which is why I made the deleted suggestions I did.

    Dreams of becoming a winner in the investment casino are, at best, a nice fantasy for the foreseeable future. Any advice to choose a 'diverse portfolio' is as daft as suggesting you put bets on 35 numbers on the roulette wheel.

    Get rich slow, or get poor quick.
  • dunstonh
    dunstonh Posts: 119,623 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    If you are holding ready cash only option is to put it were you get some interest i.e., Isa or PB's.
    PB's do same with a bit of fun thrown in, that's all.

    Premium bonds do not pay interest.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    DiggerUK wrote: »
    Any advice to choose a 'diverse portfolio' is as daft as suggesting you put bets on 35 numbers on the roulette wheel.

    You don't invest in assets that are highly correlated.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    edited 3 August 2011 at 11:58AM
    jimjames wrote: »
    The amounts you have mentioned are pretty low for an IFA to deal with
    At what level do IFAs normally come into play?
    Porcupine wrote: »
    I think you underestimate the power of both compound interest and lethargy.
    Agreed.
    Porcupine wrote: »
    For example, some fixed rate deals have an 'early exit with XX days loss of interest': I did the sums for one and worked out that it'd still beat an instant access account unless I took out the money within 9 months.
    Interesting point.
    oldtoolie wrote: »
    If you don't want to spend much time with it the simple way is to put what you have in an NS&I inflation linked bond.
    Agreed. Martin's article says:
    Uses RPI from two months prior to account opening. The RPI figure used is the one from two months before you apply, so get the account in June and it'll be April's RPI percentage.
    If I opened an account today would the RPI value from June be constant for the next year or would it track the RPI?
    oldtoolie wrote: »
    Then open an ISA account with with a fund supermarket and set-up a direct debit to feed into a a UK index tracker fund. This might take a bit more time depending on how much time you spend researching which providers to use. Then you are done for the year. Next ISA year, pick out a different index tracker for the USA, Europe or the developing world. Do the same each year. Job done
    With no experience in S&S ISAs I'm not confident. Can anyone recommend some sites I can read up on?
    dunstonh wrote: »
    Although be wary that this option is only cheap for another year or two.
    Hopefully I'll read more on this on any suggested sites above.
  • xrjtg
    xrjtg Posts: 600 Forumite
    If I opened an account today would the RPI value from June be constant for the next year or would it track the RPI?

    Ignoring the bonus, the certificates track the value of the Retail Prices Index. The RPI inflation figure for June is not relevant, but is roughly what you'd have earned so far had you bought a certificate a year ago.
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