Portfolio for a Retired parent

jimmyjones_2

Today we analysed all of the accounts:

Savings - £93k
- Instant Access - £86.5k
- 5 Year Fixed Rate ISA - £6.5k
- Premium Bonds - £2k

Investments - £73k
- M&G Recovery Fund - £29k
- Standard Life Global Advantage Fund - £12k
- Barclays UK Core Fund - £11.5k
- Scottish Widows Balanced Growth Fund - £9k
- Mortgage Endowment (matures later this year) - ~£9k
- SSE plc Shares - £1.5k
- Iberdrola Shares - £500
- Lloyds Banking Group Shares - £500

To me, the investments don't look very diversified - they are very focused on the UK and light on bonds. Some of the funds look quite expensive particularly the initial charges - I am sure they made the Halifax Financial Adviser made a decent commission!

Lets see what our IFA has to say about this lot.

xylophone

Have you had a look at Charles Stanley Direct?
Vanguard here https://www.charles-stanley-direct.co.uk/InvestmentSearch/Search/AZ/Funds/Default/Asc/n/20/1?StartingLetter=V

innovate

xylophone wrote: »

Have you had a look at Charles Stanley Direct?
Vanguard here https://www.charles-stanley-direct.co.uk/InvestmentSearch/Search/AZ/Funds/Default/Asc/n/20/1?StartingLetter=V

Sounds like you could be clocking up some horrendous charges there

Our remuneration is simple and fair: we only charge an annual platform fee for funds of 0.25% of your first £500,000 of investment held with us, which drops to 0.15% for investments in excess of £500,000.

Source: https://www.charles-stanley-direct.co.uk/DirectDifference/transparent-charging

xylophone

Sounds like you could be clocking up some horrendous charges there

But funds are offered commission free? I guess it is a case of "horses for courses".

http://www.dailymail.co.uk/money/investing/article-2274059/How-DIY-investor-build-stock-market-fortune.html#axzz2K6sjzDSu
might be of interest.

innovate

Commission and platform charges are two entirely separate items. Not charging commission is nothing earth-shatteringly new or different. But it can make a hell of a difference whether I pay e.g. £2/mth per fund, regardless of the size of my investment, or 0.25% of my holdings. It can make a particularly massive difference if I have only one or two funds, a perfectly possible scenario.

jimmyjones_2

We aren't quite ready to choose a platform yet, we need to decide on a strategy first.

The plan is to develop a strategy with an IFA and start executing it before the end of the tax year so we can use this years isa allowance.

Charles Stanley looks interesting for people like me that want Vanguard and have smallish pots - I will consider them for my S&S ISA in the future. They don't appear to have the full Vanguard selection though.

xylophone

The plan is to develop a strategy with an IFA

I (and I am sure others) shall be interested to hear how your thoughts develop.

jimmyjones_2

xylophone wrote: »

I (and I am sure others) shall be interested to hear how your thoughts develop.

I will keep you posted

I would be interested to know what asset allocation you (and others) would go for in the same position.

innovate

jimmyjones wrote: »

Charles Stanley looks interesting for people like me that want Vanguard and have smallish pots

The more funds you have, the smaller the difference. But if you have just one Vanguard Lifestrat fund (perfectly valid portfolio), you could get bitten.

Don't forget your pot will grow (all going well), and in no time you could be paying through the nose if you pay a %age of your holdings.

You might say you can transfer as and when - - but that could mean you are out of the market for a while, and/or there might be other associated charges.

Of course, there's no guarantee that the other boys will forever charge a flat fee per fund per month.

jimmyjones_2

We had the meeting with the IFA, they asked some questions to establish my mothers attitude to risk etc. They didn't seem very keen to just give us an investment strategy and asset allocation and let us DIY, they want to setup the account, transfer all of the isas, annually re-ballance etc. We are having another meeting in 2 weeks where they are going to suggest a portfolio of funds and platform.

I was slightly disappointed that they are pushing us down this route - It didnt seem to be an unreasonable request to ask them to help us define a strategy and leave us to implement it.

Also i was surprised that they said tracker funds were high risk but didnt want to waste valuable time debating the merits of a passive approach :-)