Where should I invest?

lisyloo

I am looking for somewhere to put money in a stocks & shares ISA and this is the area that I'm less confident in so would appreciate some advice.

I currently have 15% going into a pension and no desire to increase that.
No debt except mortgage fixed at 4.64% and no desire to overpay due to low rate.
Jointly we have about £35K in cash ISAs which is plenty for emergncies and about £4K in a savings account (we keep this minimal as we are both 40% tax payers).
We currently have about £13K in stocks & shares with Newton which has done averagely but not brilliant.

What I believe we need is a different s&s investment.
We would prefer to be able to drop lump sums in when we have them(although I understadn the pound cost avergaing thing).
The problem with a monthly direct debit is that there are some months when we have no savings.

We want something that doesn't require constant maintenance.

Would a low cost tracker be suitble or are there other suggestions.

I guess we are looking for better returns (than cash) longer term but sticking to medium risk and not high risk.

Thanks for any suggestions.

lisyloo

Just been reading discussion on the ISAs board and considering Hargreaves and Lansdown multi-manager funds.

Basically they do the management for you (which is what I want) and rebate a lot of the fees.

Sounds pretty good for a "lazy investor"

jem16

The multi-manager funds do rebate the initial commission and part of the annual commission. However the total expense ratio is higher because it is a multi-manager fund so you are going to pay more yearly than you would getting advice from an IFA.

Why not seek advice from an IFA about reviewing your Netwon S&S ISA to something better as well as adding new lump sums?

lisyloo

Why not seek advice from an IFA about reviewing your Netwon S&S ISA to something better as well as adding new lump sums?

Simply because the last lot of advice that we got (about investing in the Newton ISA) was decided average.

Not bad but not good either.

I felt that I might be able to do better by doing some research myself on these kinds of boards.

Whilst the charges may be slightly higher then I think it's worth paying IF you are getting value for money.

For example if someone is charging you 0.85% and returning 20% growth then that's better value that someone charging you 0.5% but returning 15%.

So it's about getting value for money not just about going for the lowest charges possible.
I'm sure there are ways to save money on charges but at the same time, going for the lowest charges will not necessarily produce the best result.

jem16

I agree it's all about value for money rather than charges which is why I sought the help of an IFA rather than going DIY. I neither have the time nor the expertise to do that.

From your reply on the other thread it seems that your IFA is not providing on-going servicing? Rather than assume that all IFAs work on that basis, why not try to find one who will provide on-going servicing?

lisyloo

Hi jem,

I am not extrapolating from 1 experience.
I have been working about 17 years and had about 7 pensions during that time.
I cannot remeber how many financial advisors I've had but must be in the region of 6-8.

This feature of only providing service when there is an initial sale seems to be common in my experience and I think it's partly because of the way the comission is structured.
I understand that they have to make a living etc. but when they get paid for 30 years (in some cases for pensions) then it doesn't seem quite right to me.

Thanks for the advice.

I will probably try my current IFAs that I have with my works pension.
They are pretty good at the on-going stuff, but that's because they DO get continual new business from new employees.
At least they turn up every few months or so and they have an interest in keeping a large account.
So far they have been pretty good, so I'll give them a try.

Thanks again for the advice and your time.

cheerfulcat

Hi, lisyloo,

Have you looked at investment trusts? The big global generalist trusts have a wide spread of assets in one portfolio, usually managed on a fairly conservative basis. The one drawback ( for some people, it doesn't bother me! ) is that they can trade on quite a discount to net asset value. Of course if you are a net buyer of shares this is a Good Thing...have a read of the AIC site, here.

jem16

lisyloo wrote: »

Hi jem,

I am not extrapolating from 1 experience.
I have been working about 17 years and had about 7 pensions during that time.
I cannot remeber how many financial advisors I've had but must be in the region of 6-8.

Have they all been connected with your works pension or were they completely Independent Financial Advisers?

This feature of only providing service when there is an initial sale seems to be common in my experience and I think it's partly because of the way the comission is structured.
I understand that they have to make a living etc. but when they get paid for 30 years (in some cases for pensions) then it doesn't seem quite right to me.

I agree and fortunately there seems to be change afoot. Quite a few IFAs are changing over to the New Model method where the initial commission is low - usually around 1/1.5%. Any other commission paid from the provider would then be rebated back to your investment or in the case of funds reduces your initial charge. The 0.5% trail commission(paid out of the amc) is what provides the ongoing servicing and the incentive to make your funds do well(the more growth you have, the more they are paid yearly). This is what I was meaning when I mentioned the H-L multi manager funds costing you more than you would pay to get advice from an IFA.

I will probably try my current IFAs that I have with my works pension.
They are pretty good at the on-going stuff, but that's because they DO get continual new business from new employees.
At least they turn up every few months or so and they have an interest in keeping a large account.
So far they have been pretty good, so I'll give them a try.

Thanks again for the advice and your time.

Worth a try. However they may only be interested in your pension as they are probably paid a retainer fee from the company.

dunstonh

On pensions, an IFA can match and even undercut HL on execution only.

lisyloo

Have they all been connected with your works pension or were they completely Independent Financial Advisers?

I have always been "forced" to use the advisors chosen by the company.
By "forced" I means I can wave bye-bye to £2K-3K if I don't want to participate in the companies scheme.
These are usually "grouped personal pensions".

I have also seen IFAs independently outside of the work situation.
There were independent.

Worth a try. However they may only be interested in your pension as they are probably paid a retainer fee from the company.

I don't believe the company pays them.
I believe they are paid out of commission.
they have advised me on previous pensions (not connected with my current employer) and taken commission for that.
I believe they will also extend their advice to other personal investments.

Two advantages for me are that they visit regularly and that they have a reputation to uphold for a large account.

EdInvestor

lisyloo wrote: »

I am looking for somewhere to put money in a stocks & shares ISA and this is the area that I'm less confident in so would appreciate some advice.

What I believe we need is a different s&s investment.
We would prefer to be able to drop lump sums in when we have them(although I understadn the pound cost avergaing thing).

We want something that doesn't require constant maintenance.Would a low cost tracker be suitble or are there other suggestions.

The Selftrade "Iplan" ISA might suit you.

http://focus.selftrade.co.uk/en/ourservices/whatweoffer/cat/index.html

You can hold any investment in it and fund it as and when you life.But there is a special deal for Exchange Traded Funds which are a new kind of low cost tracker fund. You pay no commission for investing in these, plus there's no stamp duty.All you pay is the 25 quid annual ISA fee.

There's now a very big range of ETFs, covering different stockmarkets here and overseas, plus other asset classes like property, bonds and commodities.So you can spread your money around if you like.The UK dividend share ETF is a popular one, pays c. 4% dividend income or so after charges as well as usual capital growth - we hope


If you prefer managed funds, then H-L is probably the cheapest provider.You can cross check suggested funds' ratings here:

https://www.citywire.co.uk/Funds.Home.aspx