Hargreaves Lansdown & buying additiona/extra/other funds?

jem16

K_P83 wrote: »

For the very reason i created this thread - looking at adding a second, different, fund, would mean that i couldn't be all eggs-in-one-basket. At the same time, i wouldn't like 100 eggs spread over 100 baskets either.

My only question to you is why the need for a 2nd fund when you are already paying a Fund Manager to provide that for you? The Jupier Merlin Portfolio has about 16 funds in it.

http://www.jupiteronline.co.uk/ApplicationFiles/GetFile.pdf?docId=114

The Jupiter Merlin fund you are in is a Fund of Funds. It already contains an Asian Fund - First State Global Asian Equity Plus Class I.

Either use the Portfolio Fund (for which you are paying a higher TER for the Fund Manager's expertise) or do the job yourself by choosing individual funds. To mix both seems daft to me.

Nine_Lives

because i've clearly not understood in depth would be the likely answer :rotfl:

I thought the Aberdeen Asian was a totally different type of fund (so no eggs-in-one-basket). Plus looking at the charts, the progression on that seems to be much more than the Jupiter Merlin.

Clearly my choice of lumping with an IFA wasn't a bad one. Maybe one day i'll understand how all this works, hopefully.

jem16

K_P83 wrote: »

I thought the Aberdeen Asian was a totally different type of fund (so no eggs-in-one-basket). Plus looking at the charts, the progression on that seems to be much more than the Jupiter Merlin.

The idea behind choosing different funds is for diversification. You would never go gung-ho into the likes of Asia Pacific (unless of course you wanted a roller-coaster ride ) so you would choose different funds to give you that diversification. The Jupiter Portfolio fund is doing that for you and balancing out the risk, so some high risk, some medium and some low.

margaretclare

Hello K_P83

Sorry I didn't respond straight away to what you asked me. We were in a hotel and didn't want to pay for any more WiFi access via our laptop. Just got home, I've looked at my savings, and here's the answer:

I had some National Savings certificates which didn't seem to be attracting much interest. I cashed them in and I paid in £536 to my s&s ISA. At the same time I got fed up of cash ISAs, again, tiddly amounts of interest, and I transferred the contents of all my savings accounts to the s&s ISA, another £1K. Mostly over the past few years I've been paying £50 a month in regular savings, but last year I increased that to £100 a month and then from this spring it will be £200 a month.

So far I haven't dabbled in Asia Pacific. To my mind, although others may disagree, that is something to do when you have a good solid portfolio and you want to diversify from there. I started with UK equities and then went on to global equities more recently.

There is nothing wrong with investing £50 a month, especially as you and your brother are young and have all that time for your pot to grow. Invest in a good solid well-managed fund and leave it to grow. According to HL, one of the best fund managers in London is a man called Neil Woodford of Invesco. However, one at least of the funds he manages invests a lot in tobacco companies. That is something I absolutely will NOT have any of my investments in, not at all. And I don't invest in oppressive regimes overseas either.

It seems to me that you both have to decide what you want. Is it a pension, or is it savings under a s&s ISA umbrella? If you have no pension provision at all then the pension should be your priority. You can do this under a SIPP (self-invested personal pension plan) in the same way as the s&s ISA, with the added advantage that the nice taxman (or woman) adds a contribution. The tax rate may be different now, but it used to be the case that for every 80p you contributed the tax person added 20p, making a total pound to be invested and to grow. The drawback of this is, of course, you can't draw it out if you need the money desperately. It has various advantages, though, and you don't even have to draw on it when you reach the official retirement age (whenever that is going to be). I have a SIPP as well as other pensions provision and I don't draw on the SIPP funds because I don't need any extra income - but that's an extra little pot that is sitting there in case I ever do need it.

It can be a learning curve, but so what - it's fascinating, and it's possible to learn, even at my advanced age!! Many years ago I read an article about 'how to grow rich' and it was extolling the beauties of unit trusts - this was long before things like s&s ISAs. The article said 'put in a regular amount, build up a solid portfolio in one area then add another one, and by the time you've got 10 funds well-invested you have the key to the executive wash-room'. Over a few decades, even with all the ups and downs, the stock market has out-performed any other kind of investments. Read 'A Girl's Best Friend is Her Money' by Jasmine Birtles and Jane Mack. Also look on the Motley Fool site: www.fool.co.uk Lots of different opinions but also lots of help and ideas out there.

Best wishes

PS: Sorry about the confusion about DH. I'll call him my OH if you like. We have both been poor and don't want to go there again. We do pretty well because we have our own individual pensions provision and we share what we have.

Nine_Lives

Thanks for the reply MC. No worries about any delay. There's more important things than the tinterweb

margaretclare wrote: »

It seems to me that you both have to decide what you want. Is it a pension, or is it savings under a s&s ISA umbrella?

See, i had "decided" pension for myself.

Why? Because when you talk of retirement, people talk of pensions as a knee-jerk. That's the only reason.
Then MSE & the MSEers put S&S ISAs into my head as an alternative.

I was leaning towards the pension route due to the tax relief. I'd be paying £100 in a month (not £80 to make £100) to make £125 monthly contribution (inc tax relief).
I'm well aware this couldn't be touched for many years - but that wasn't an issue for me. I didn't care, because i wouldn't be touching it for 10 or so years AFTER i'd be eligible to touch it. So not being allowed access wasn't even a problem.

I spoke to an IFA who suggested that as i'm still living at home & saving to move out, but more importantly - my employer will only contribute when they HAVE to, i should look at S&S ISAs as my option, and that when N.E.S.T. comes into place & my employer is forced to contribute, then and only then should i get into pensions.

I relayed this advice to the MSEers & the majority of those replying agreed. They also seemed to suggest that if i was a 40% tax payer then it'd be a different story, but as i'm basic rate - they (the majority) agreed with the IFA.

I still can't help but think i'm missing out on £25 per month tax relief though, but i trust experts with their views (maybe i trust too much?) as i think they know more than i do.

My brother is perhaps a little different. I'm a self confessed tightwad, so i don't piddle my money down drains every week. My brother is different. There may come a time when he'll need to touch his savings in an emergency or whatever. That isn't likely to happen with me.
The end goal however is the same - to put money aside from now until retirement & (hopefully) only touch it once we're retired.

The only thing certain in life is death, so on that basis, i'm 99.99999999% sure i WONT need to touch mine until i retire. My brothers percentage will be a bit lower than that right now, but maybe if/when he matures, he will be in the exact same boat as me, who knows.


SO... the reason i'm in a S&S ISA is due to the advice given, despite feeling i'm throwing £25 per month away. I will be going into a pension when NEST arrives on the back of advice i've been given.

But nothing is set in stone. I'm not a blinkered type of person & i constantly welcome advice & opinions so i can (hopefully) make better decisions throughout.

margaretclare

Well, you've talked to an IFA, and as I said, I'm no expert. Thanks for explaining the difference between yours and your bro's situations so clearly and pithily!

In contradiction to what your IFA has said, I think in your shoes I'd still go down the pensions route. You'll find that book I referred you to explains it all in far more detail and far more clearly than I could. 25% extra to be squirrelled away and to grow over time is not to be sneezed at. Not sure what NEST is.

Every member of my family that I know of has either joined the employer's pension scheme from day one, or started some form of pension scheme. Or both. Most have not regretted it. Some people I know have done neither, and as time passed they have regretted it.

If you have a s&s ISA I believe you can convert it into a SIPP whenever you choose.

Whatever you decide, you sound to have a good head on your shoulders and will do well.

How did my investments get from £199 in April 2006 to £9159 in October 2011? Now £10,323.46 as of this morning? I'm still amazed and bemused by it. Wish I had another 50 years to live - I could be a rich woman by then! I'm just fascinated to see where it can all get to - a complete amateur, started life in real poverty, had good jobs but never able to save in my working life because there were always too many things that needed money spent on them. I did make a couple of good decisions - paid into the national scheme and also employment scheme. But savings/investing? I didn't really know about those things until I started reading and finding out.

Nine_Lives

Thanks for the reply.

I like to read up on things & have done plenty on this. I bought that which? book on pensions which was "ok", but my problem is i'm not really the type who can teach themselves. I'm more class-based - where i need someone teaching me. As a result, i come here & pester you guys with questions & more questions. I like to know something inside-out, or at least as best i can, before i jump in (especially where money is concerned).

For a light hearted example - i'm getting married this summer & the gf thought i'd go into a jewellers & pick a ring & come out. The reality is that she picked hers the day we went looking. I've been in & out, looking at this, looking at that, toying between 5mm, 6mm, 7mm, this metal, that metal, researching how different types of metal handle in a manual job, how different types can be cut off in the event of an accident, deciding on one metal, then changing my mind etc etc.
Why the dragging out? 2 reasons really - potentially a bit of money is going to be spent (the titanium are quite cheap, but the palladium are (to me) quite expensive (though i understand a few £100 on a ring to some is not expensive, it IS to me)). The other reason is this is a long haul decision. I only plan on getting married once (obviously), so this ring is for keeps, so i want it right.

Just a light hearted example of how i [perhaps] over-think everything.

margaretclare wrote: »

Not sure what NEST is.

http://www.nestpensions.org.uk/schemeweb/NestWeb/public/whatIsNEST/contents/what-is-nest.html

My understanding in a summarised version is:

In the coming years, every employer will be forced into contributing into an employees pension. I believe they pay 3% while the employee pays 5% (minimum figures). Everyone will be opted in & you will have to opt out yourself.
I believe the date i read was 2017 (i think), but my IFA reckons it'll come in sooner (personally, i doubt).

dunstonh

In contradiction to what your IFA has said, I think in your shoes I'd still go down the pensions route.

Its a judgement call. Neither is right or wrong. Its just a variation of the same thing. I have seen people in a similar situation and with some I have used pension and some I have used S&S ISA. I think it does no harm to get used to having to pay the pension early and know it is a proper commitment. The ISA allows a get out and some people do not have the financial awareness or financial control and need protecting from themselves.

Doing something is better than doing nothing.

margaretclare

Doing something is better than doing nothing.

Absolutely. I couldn't agree more.

One of my biggest regrets is seeing a newspaper ad for unit trusts, this is way back in the 60s. I thought 'what a good idea'. The basic idea: pay in a little on a regular basis and allow the investments to grow.

I did nothing!!!

The way you think is the same as my OH. Look at buying a new sofa, he'll go back and sit on it a dozen times before he commits any of his money to buying it!

Nine_Lives

Indeed!! I know i think things through a lot, but it's worse when money is in the equation.

I see & agree with dunstonh's post there. I still don't fully see why my IFA suggested S&S ISAs though.
His reasoning was -
* get out when you like
* have never moved from home, so don't know what it's like
* can use these savings towards a deposit (even though i told him we wouldn't be - it's retirement money. House deposit money is house deposit money which we have to one side also)
* you can't touch a pension until way in the future (i told him i knew this & this didn't bother me).
* he'd only advise pension if 1) my employer was contributing 2) i was on 40% tax 3) i was paying in considerably more
* as a result of which, he recommends only joining a pension once NEST comes in to place.

So he's actually given me his reasons & i understand them, but i still don't see how a S&S ISA approach is better - due to the 20% loss each month (by which i mean there's no 20% injection in a S&S ISA).
I understand the pros & cons of each, i just don't understand why the ISA is better for me. Yes i know i have no employer contributions & i'm 20% not 40%, but at the same time, i've shown i can manage money well. I don't piddle it away.

With that said, i trust the man on his judgement on the basis of i'd like to hope he knows what he's doing having been in the job for many years, so while at 28, my handling of money may be unusually organized for him, i'm still no different to what he's seen in the past.