Best place to hold existing portfolio

funhouse

grey_gym_sock wrote: »

i bet you could get 2 diaries if you haggled

You are probably right. I'm just starting to get paranoid as to whether some clients are getting calenders too...and are there pencils and pens up for grabs...every company has pens. Hm, what else could I demand :think:

funhouse

dunstonh wrote: »

They are an investment manager rather than adviser. They control the investments but they do not provide advice. If they want to switch something around they will. An adviser has to run their advice past you first for you to agree to change it or not.



Discretionary investment managers typically use shares, direct assets and clean share classes on investment funds (where possible). Remember that the same funds in clean form are cheaper than in retail form. Hence why you get an explicit charge on top.

Some people swear by discretionary investment managers. In nearly 20 years, you can count the number of people I have referred to discretionary investment managers on one hand. If you portfolio is that big then maybe it is value. However, for most people it will just be added cost. BD have a good enough reputation though so there is unlikely to be any issue with what you have.

The three options are DIY, IFA or Discretionary investment management. (FA is ruled out given limitations leaving you with the three mentioned)



I would agree with them. People that pull out after drops and invest after recoveries miss out and end up worse off in general. Punching through it and coming out the other end is usually the best option along with some rebalancing in between.



Are you letting hindsight get in the way there? No-one can predict the sale of a drop and when drops do happen they tend to be quick and if you pull out after the drop, you miss the bounce typically.

Thanks for a useful response. I appreciate the clarification on the role BD play; I guess even though I understand that its 'discretionary management', I have simplified it to the term 'Financial Adviser' as I perceive them as acting as 'Financial manager' and haven't really made much of their general lack of interactive debate (i.e. the adviser activity you cite).

Interesting too your comments regarding the 'clean form' issue as I had started to wonder if they have been pocketing underlying commissions. From your comment, I'm assuing not and that the management charges and fees on any sale/pruchases, represent their money out of my holdings.

I was curious about your comment that in 20 years, the number of referrals you have made to discretionary managers has been very small. If you have a moment and feel it approriate, I'd be interested to know why this has been the case. In my case, the portfolio is over 500K. So don't know if this would make it a case which you would maybe be more likely to consider for discretionary management, or is it a case of the ability of a client to be able to understand/act on advice (rather than the sums involved).

I realise that there are highs and lows with investments and making the right call at any point in time is difficult...but VERY easy with hindsight. So I certainly don't want to be too critical of BD's approach/response. However, it seems to me that in the last four difficult years, there has been no capital growth to speak of and there has been no significant income return. So, things more or less stand where they were four years ago...having gone through a 100k drop and currently standing at around 40k below their high. So, like any fund manager, there comes a time when you question whether they played it right...and whether they will play it right going forward. I accept too that they might be well placed for any uplift when the 'golden days of summer' return:rotfl:. I sometimes feel investments are a bit like musical chair and its only when the music stops playing that you know whether you still have a chair or not.

vectistim

funhouse wrote: »

However, it seems to me that in the last four difficult years, there has been no capital growth to speak of and there has been no significant income return. So, things more or less stand where they were four years ago...having gone through a 100k drop and currently standing at around 40k below their high.

Some will have done better, some will have done worse than that, but here are two numbers for you to consider:
FTSE100 Dec 5 2007: Close 6,457
FTSE100 Dec 4 2012: Close 5,869

funhouse

vectistim wrote: »

Some will have done better, some will have done worse than that, but here are two numbers for you to consider:
FTSE100 Dec 5 2007: Close 6,457
FTSE100 Dec 4 2012: Close 5,869

Quite agree with you. I'm sure too that for many property price figures on those two dates they will be on the same lines, save, it seems, London...and also some will have done better and some worse. Equally, if one were to look at bonds, or gold, it might be different. Take gold for example
7 Dec 2007 $794
5 Dec 2012 $1688

So, it can come down to judgement as to which assets you back...and I realise that luck plays its part too. At the end of the day, I'm not expecting to be at the top of the pile on returns. Equally, I know they can access bonds, gold etc and I'm trying to figure what are reasonable expectations from a big organisation with a whole bunch of ecconomists and number crunchers spending their time contemplating how things are, where they are going and how to play it.

srcandas

First funhouse tx for starting this thread. It has attracted some interesting posts. Hope you are pleased as well

funhouse wrote: »

So, it can come down to judgement

and strategy. What were/are they trying to achieve? As in maintain basic value; beat inflation, take big risk for maximum return, income or capital growth, etc?

If it was defensive I'd have hoped they would have done better for you with a helping hand from bonds if not gold as an example.

You are after all dealing at a level where costs can be greatly reduced.

:beer:

dunstonh

Interesting too your comments regarding the 'clean form' issue as I had started to wonder if they have been pocketing underlying commissions. From your comment, I'm assuing not and that the management charges and fees on any sale/pruchases, represent their money out of my holdings.

The good DIMs rebate commissions or use clean share classes (or both as you cant always get clean). The ones to avoid are the ones that charge you explicitly and keep commissions on top (bank versions to be the ones that do that).

The cheapest option is DIY. An IFA should be cheaper than a DIM but more expensive than DIY. A DIM will be more active than an IFA (who will likely be 6-12 month reviews depending on size of money compared to DIM who will make changes as and when they feel it is needed). DIM can change your money around without permission. IFA requires permission from you to make the changes they recommend. You can change your money around when you like. However, many that start with that intention often go on to doing it less and less. If you are going to spend the time to learn and give it the ongoing reviews it needs then DIY is a viable option. However, if you dont do it then it is better to pay someone that will rather than let it fester and become unbalanced (which typically ends up in lower returns)

waiax73

I've been bragging about rplan quite a lot recently - I've transferred my S&S ISA to their platform and I invest monthly now. No initial charges on most of the funds, they refund half of their commission and I like the site's UI.

They've got a cost comparison thingy - you can check the costs of investing with loads of different providers: http://www.rplan.co.uk/Home/CostComparison

I think Cavendish is the cheapest, if that's what you're looking for.....

dunstonh

They've got a cost comparison thingy - you can check the costs of investing with loads of different providers: http://www.rplan.co.uk/Home/CostComparison

Like most cost calculator comparisons they overstate the figures.

The FSA reviewed charges in the past and published the information to be used in initial disclosure documents. It found the average adviser case was 1.8% initial and 0.5% ongoing. The Rplan cacluator shows typical adviser case was 4.275%. That is more than double the average.

The calculator also shows the typical discount broker as having initial charges when it doesnt (even advisers dont have to worry about initial charges on funds any more). It also showed dealing charges at £40 for broker and adviser whilst in reality there is none on funds.

[STRIKE]They are also not being that honest about their remuneration either as they make no reference to the platform commission they keep. Instead they only talk about the trail commission. This is despite saying "Additionally, we believe in transparency, openness, and fairness. " on their website.[/STRIKE] - removed as rplan have said they do not receive all/some of the platform commission. Cofunds keep it all.

Rollinghome

waiax73 wrote: »

They've got a cost comparison thingy - you can check the costs of investing with loads of different providers: http://www.rplan.co.uk/Home/CostComparison

For specific brokers holding the ten funds listed I would assume it's accurate. They'd be on dodgy ground if it wasn't. Hargreaves Lansdown don't wipe out the entire initial charge on all funds, including most Jupiter funds for example. The figures would be different for someone holding some tracker funds.

Quite what they define as typical is a little trickier. I don't know that anyone charging at the level they suggest would fit my definition of a "discount broker". I understood that Rplan use the Cofunds platform and not sure they'd receive any of the platform commission.

So probably useful provided you look closely at the specifics.

Nick_Curry

Nick from rplan here - I thought I'd clarify some misconceptions about our charges tool.

The calculator also shows the typical discount broker as having initial charges when it doesnt (even advisers dont have to worry about initial charges on funds any more).

Many discount brokers do still levy initial charges on some funds - we included a 0.25% average initial charge in the calculator. Our 'typical broker' scenario rates around 3/4 of the way down the cost chart (meaning 1/4 of the providers are more expensive). Some of the big names that are more expensive than our 'typical broker' in the scenarios we tested include Sharecentre, Selftrade and Fidelity.

It also showed dealing charges at £40 for broker and adviser whilst in reality there is none on funds.

Many platforms still charge a switch fee for switching from one fund to another. We have counted this towards the dealing costs. This is clearly stated in the help bubble next to the 'dealing costs' column header.

They are also not being that honest about their remuneration either as they make no reference to the platform commission they keep.

As Rollinghome pointed out, we use Cofunds and so don't keep any platform commission. We are very open about the fact that it's charged though - in fact we're the only provider that clearly breaks down the cost of buying funds in pound terms before you buy them (see rplan.co.uk/post/1142/finding-out-how-much-you-pay-for-your-investments-before-you-buy-them).

The calculator take the full TER into account, so for providers like iii or ATS which discount some of the platform commission, that rebate is included in the total cost we show.

Instead they only talk about the trail commission. This is despite saying "Additionally, we believe in transparency, openness, and fairness. " on their website.

We do believe in transparency, openness, and fairness, which is why we included all the charges we could think of in the comparison tool. This includes things like the switch fee which may providers typically gloss over - but they do get charged, and people do pay them. So we included them in our tool.

The cost listed in the calculator is the total cost of investing based on the TER - it includes platform fee, trail commission, and fund manager charges, as well as 'extras' like the dealing charges, switch fees, or quarterly/annual charges that some (but not all) providers charge. It doesn't only include the trail commission.

The FSA reviewed charges in the past and published the information to be used in initial disclosure documents. It found the average adviser case was 1.8% initial and 0.5% ongoing.

Thanks for the pointer. Would you mind posting a link to something documenting this? A quick google search didn't yield anything useful. The aim of the tool is to be a useful point of comparison; charges are currently hard to understand, which makes comparing providers difficult. So I'd be happy to amend the calculator to reflect the costs of a typical adviser more accurately.