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How best to put £255k in savings
Comments
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Apologies for being down on the comments here, but really - looking to invest / save £255,000 and relying on the opinion of people you have never met on an internet forum is somewhat foolish, if you'll pardon my saying.
Why would you not seek out a financial adviser and get some appropriate assistance?
Cos he'd end up with only £250,000 to invest.......illegitimi non carborundum0 -
Your attitude is exactly why people end up losing massive amounts of money.Cos he'd end up with only £250,000 to invest.......
Ok, so - he can do it himself, ask non-regulated and unqualified individuals on this and other forums. Great. How in the world can that be better than speaking to a properly qualified and experienced financial adviser?
Let's consider - he could go through the motions on here, take some "advice" (ha!) from some laypeople, and invest his £255,000 somewhere making 5% growth per annum. Excellent - well done. Alternatively, for the same level of risk, an experienced adviser may be able to turn that 5% into 6.5% instead through a proper asset allocation process in order to come up with a suitable investment as well as considering the taxation and trust elements which are often exceedingly complex.
Leaving the complicated elements aside, even if the only thing the adviser does is increase the return, what is the big deal? A 1.5% difference is nothing, right?
Well, let's consider that investing £255,000 for a 15-year period at 5% would give a return of £530,126.
Investing £250,000 for the same period at 6.5% would give a return of £642,960. That's a difference of £112,834.
So, using your interesting example of a £5000 fee, which is less than 2% of the original investment, what if the above happens? Would you not be happy to spend £5000 for an additional £112000 gain?
Not to mention the taxation issues, trust implications and everything else that the adviser can bring.I am an Independent Financial AdviserYou should note that this site doesn't check my status as an Independent Financial Adviser, so you need to take my word for it. This signature is here as I follow MSE's Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Not to mention the taxation issues
I'm not sure I'd be confident that your average IFA could give sound advice regards taxation and I'd definitely run anything they proposed past my accountant and also do my own research.
I've just had a check, and only 10% of my non-pension savings and investments are in vehicles organised and managed by an IFA. This figure is going to keep falling as 1) future investments will be into shares in companies/ITs, and bonds of my own choosing, 2) I'll soon be moving my IFA managed ISA (nee PEP) to a lower fee platform and managing it myself.
My advice to the OP would be to buy a good book on asset allocation even if they intend speaking to an IFA, and to also do their research regards the various underlying investments that might be recommended. If after reading/research they still feel they need a helping hand, then fine, speak to an IFA, but they must *never* take their eye off the ball as they *must* understand what's being proposed.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.0 -
Apologies for being down on the comments here, but really - looking to invest / save £255,000 and relying on the opinion of people you have never met on an internet forum is somewhat foolish, if you'll pardon my saying.
Why would you not seek out a financial adviser and get some appropriate assistance?
Im on a forum to get opinions, from people that have money invested/ in similar positions - to see what products they have found.....thats what these forums are all about. :eek:
Why dont you give us some free advice and tell us what you would do with your £255k?! :cool:0 -
Im on a forum to get opinions, from people that have money invested/ in similar positions - to see what products they have found.....thats what these forums are all about. :eek:
You'll get better advice regards this on the Motley Fool forums IME. There are many people there who have been through a number of economic cycles over the decades and they know how to invest for growth and income, but also how to be defensive.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.0 -
Because what I would do with my £255k is irrelevant.Why dont you give us some free advice and tell us what you would do with your £255k?! :cool:
What people do with their money is dependent on many things. Age, attitude to risk, income, health, job security, taxation status, domicile, residency status, dependants, and so on and so forth.
My point is that to try to tell someone what to do with £10k is bad enough, but doing the wrong thing with an amount like £255k could be potentially catastrophic. The opinion of an experienced and suitably qualified adviser should be sought on an individual basis.I am an Independent Financial AdviserYou should note that this site doesn't check my status as an Independent Financial Adviser, so you need to take my word for it. This signature is here as I follow MSE's Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
The opinion of an experienced and suitably qualified adviser should be sought on an individual basis.
Mandy Rice-Davies would have something to say about that!
Of course, there's nothing fundamentally wrong with consulting an IFA, as long as you do it on a fee basis and agree the fee up front.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.0 -
We live in a time of recession, banks, savings institutions, stocks and bonds are currently the lowest performing assets. Look at history to see how many times this has happened. Invest in a commodity that is increasing in value, not decreasing.
Theres many out there, mostly metals and most people advocate gold due its relationship with the monetary system. Even central banks still hold gold reserves and they have started to increase these over the last few years. Why do you think the largest financial establishments on earth are doing this? Do you think theres something they know that you dont?
Gold is arguably at or close to the top of the market and market experts will almost unanimously say the way to play them is contrarian -- ie buy at low price, sell at high. The largest financial establishments on earth have teams of highly paid full time experts studying markets and trends. They will have some intelligence as to when to sell their gold and other commodities. The average punter will not.
The stock market has declined in absolute value since 1999.
The way to play it, as others have suggested, is to diversify it. With that amount for a more mature person perhaps something like :- 10% instant access e-accounts, 60% fixed rate/term bonds over periods ranging from 1-5 years, 20% various managed and/or tracker equity funds, corporate bond funds and gilts funds, and 10% property funds and/or commodity funds. That won't make a killing but it's the best option out there at the moment without taking a massive gamble with the capital. If the risk profile is highly cautious rather than moderately cautious, reduce the funds content to 15% in total and increase the cash savings bonds accordingly.
I would not bother with an advisor for this sort of matter -- if they're that good why aren't they following their own advice and living the life of Riley in the Bahamas ? The many financial advice websites and comparison tables can give good indication as to which accounts and funds are 'best buy'.No-one would remember the Good Samaritan if he'd only had good intentions. He had money as well.
The problem with socialism is that eventually you run out of other people's money.
Margaret Thatcher0 -
Interesting.
I would suggest that the first word "fee" should be changed to "transparent" and the second "fee" should be changed to "remuneration".Of course, there's nothing fundamentally wrong with consulting an IFA, as long as you do it on a fee basis and agree the fee up front.
People need to get away from the idea that "commissions are inherently bad". The problem with commissions historically are that they are not transparent and unscrupulous advisers tried to hide them. Commissions, where used correctly, are just as valid a remuneration method as fees. I shall illustrate:
If a client has £100,000 to invest, and there is a £1,500 fee:
The client only has £100,000 - so he ends up giving you a cheque for £1,500 for your fee and another for £98,500 for his investment. This is a fee basis.
Alternatively, the client gives you a cheque for £100,000 which goes to the provider who then pays the adviser the £1,500. This is a commission. The net effect to the client is EXACTLY the same. Please explain to me why a commission is inherently a "bad" thing in this case?I am an Independent Financial AdviserYou should note that this site doesn't check my status as an Independent Financial Adviser, so you need to take my word for it. This signature is here as I follow MSE's Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Please explain to me why a commission is inherently a "bad" thing in this case?
Because a commission is an attempt to hide something that should be out in the open.
There are also cases where the fee comes from funds already in a pension or ISA, and where the limits of what you can put into those per year mean that paying directly for advice is the best approach.
I'd much rather have to pay *all* fees and costs associated with my pensions and ISAs from unwrapped funds as it would let me trickle more into them.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.0
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