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How best to put £255k in savings
Comments
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Even if you've agreed in advance that £1,500 is the cost and that any additional commission would be rebated to you? That seemed to be the context of the question.gadgetmind wrote: »No, I won't, and the reason I won't is because I deeply suspect that you have chosen an investment that maximises the £1500 you get rather than maximises my long-term return.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
You make no sense, and I feel that you are scrambling around trying to continue your quest to make the commission look evil.gadgetmind wrote: »No, I won't, and the reason I won't is because I deeply suspect that you have chosen an investment that maximises the £1500 you get rather than maximises my long-term return.
You give the provider £100,000. They give £1,500 to me. That is my "commission" for placing the deal. £98,500 is invested for you. End of transaction. The £1,500 is paid, so how can it be "maximised" in the future?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 -
Taking the DIY approach is ok with small sums.
A DIY approach that takes a sensible approach to asset allocation will scale to any size sum you care to name. The argument for using an IFA does get stronger with larger sums but this is only because their fees become a smaller percentage of the pot.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 -
Your attitude is exactly why people end up losing massive amounts of money.
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.
The problem is that theres no guarantee that an IFA will turn 5% into 6.5%.
My question to you is, would you take an incentivised commission e.g. nothing upto the 5%, and say a fifth of any growth over 5% in year one? Or smooth it over five years if you want?illegitimi non carborundum0 -
You make no sense, and I feel that you are scrambling around trying to continue your quest to make the commission look evil.
No, I'm trying to explain to you why commissions are *not* in the best interests of the customer, and the FSA agree with me. That you don't agree comes as no surprise to me, nor does your scrabbling around trying to justify fat commissions.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 -
The biggest problem with commission, as I see it, is that it tempts IFAs to take on relatively poor clients who cannot afford to pay fees, or will only agree to fees coming from commission ... in order to make a living for themselves.
To take Meeper's £100K portfolio example. He agrees a fee of £1500, to be taken from commission. He then HAS to recommend complex/investment products paying a hefty commission or else he doesn't get his fee ... or lands the client with a bill just for telling him to put it into a couple of building society accounts or national savings etc. OK he might not charge the first widow/orphan he comes across for such advice if its appropriate, but he won't make a living if all his clients are like that.
BTW nothing personal - I'm having a dig at the industry rather than Meeper personally !0 -
But the chances are increased.The problem is that theres no guarantee that an IFA will turn 5% into 6.5%.
Of course not. How could anyone run a business on that basis?My question to you is, would you take an incentivised commission e.g. nothing upto the 5%, and say a fifth of any growth over 5% in year one? Or smooth it over five years if you want?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 -
Even if you've agreed in advance that £1,500 is the cost and that any additional commission would be rebated to you? That seemed to be the context of the question.
The crux of the matter is that investments should be chosen to maximise the return to the investor. If an IFA starts by eliminating all investments that don't pay a commission (such as ITs, ETFs, trackers and the like) then you're on the back foot even before taking the commission into account.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 -
BTW nothing personal - I'm having a dig at the industry rather than Meeper personally !
Yup, me too, and I apologise if it doesn't always come across that way.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 -
Go back to my example. Tell me EXACTLY how they are different. One is a fee, one is commission, and they are EXACTLY the same remuneration levels.gadgetmind wrote: »No, I'm trying to explain to you why commissions are *not* in the best interests of the customer, and the FSA agree with me. That you don't agree comes as no surprise to me, nor does your scrabbling around trying to justify fat commissions.
Please, break it down.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
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