Financial advisors and investment funds

shiningfaery

There seems to be alot of threads surrounding stocks and shares ISA's which dont cover what I am thinking.
So hopefully I make sense.....

I am looking at starting an investment fund possibly an index tracker to start with until I get my head round how it all works from the theory that I have been reading.

What I am wanting to achieve is enough savings for my retirement and feel that my starting point is investment funds going into a s&s ISA. At the moment I am a basic rate tax payer.

I have been looking at the different funds and feel that a regular monthly deposit would be the best option for me just now.

Do I need to use a financial advisor at this stage?

What figures do I need to pay attention to when choosing a fund? I have read about the costs and know (I hope) what to look for there but I am not all that sure as to what to look for in terms of a funds performance.
I am wanting to make sure I know what all these reports I have been looking at mean.

Head hurts now too much new information

dunstonh

Do I need to use a financial advisor at this stage?

If you know the what you want to do then no. However, dont assume all DIY distribution channels are cheaper than advised. You need to do your research as many DIY options are more expensive.

I am looking at starting an investment fund possibly an index tracker to start with until I get my head round how it all works from the theory that I have been reading.

One assumes that would be a multi-asset tracker and not a single sector tracker.

What figures do I need to pay attention to when choosing a fund?

You need to consider your risk profile, capacity for loss and understanding and match the fund to those. When researching you need to compare like for like. Just because a fund is in a certain sector does not mean all funds in that sector have the same risk profile. Indeed, some sectors can be very very different when it comes to risk and reward.

youtellme90

I'm currently looking to do the same thing - invest a small amount (sub £200) per month into a S&S ISA to enable the money to grow (hopefully) without it being too much of a loss each month.

I've done some initial digging, as you appear to - I've also had a chat with a Financial Advisor at Natwest. The basics of this chat were - we can have a free chat to see where you might want to go with your investments, at that point we'll charge £500 + VAT for further investment advice, then charge 1.25% of whatever you invest.
His opinion was unless I was investing > £100k I'd be better off assessing the situation myself. I tried to question whether that was because it wasn't worth his time, or because he genuinely thought that and he seemed to say he was salaried by the bank so didn't care how long he talks to me for - it's the bank that make the money. I suppose I'm a bit sceptical into bankers these days.

As for other options I've looked at - fund supermarkets are at the forefront of my investigation now, not that I know much about them at this point.

I just wish there was a way to go in and say "show me your S&S ISAs and the associated fees" then let them transfer the money - as if you would with online banking. But I guess it's not as simple as that with S&S.

dunstonh

I've done some initial digging, as you appear to - I've also had a chat with a Financial Advisor at Natwest. The basics of this chat were - we can have a free chat to see where you might want to go with your investments, at that point we'll charge £500 + VAT for further investment advice, then charge 1.25% of whatever you invest.

Bank FAs should be avoided. If you need advice it should be an IFA not an FA.

I just wish there was a way to go in and say "show me your S&S ISAs and the associated fees" then let them transfer the money - as if you would with online banking. But I guess it's not as simple as that with S&S.

A decent platform will offer around 30,000 investments. The ISA itself rarely has any cost. The cost is usually based on the amount on platform and where you invest. If you want someone to do the work for you then you use an IFA (not an FA). Otherwise you DIY.

lisyloo

I don't get paid for anything and don't work in the industry and have no axe to grind, but when you see your natwest FA they might not be able to advise you on the whole of the market and only on their own products.
Often high street banks are poor value.
I use an IFA and the charges are pretty low and do do actively manage my investments (send me a report every quarter to let me know which fund they recommend swicthing if any).

JuicyJesus

Lokolo wrote: »

Yes, dunston has a contract where he gets paid a quota everytime he says the words "See an IFA". Brilliant.

I don't think old doughnut has worked out that IFAs are actually disparate individual, so dunstonh saying "see an IFA" is so vanishingly unlikely to benefit him directly that it practically isn't going to happen.

Archi_Bald

lisyloo wrote: »

but when you see your natwest FA they might not be able to advise you on the whole of the market and only on their own products.

You can easily say that the Natwest (or other bank) FA will not be able to advise on the whole of the market, at least not on company time. If they could, they wouldn't be working for Natwest or some other bank, and they wouldn't be just FAs, without the crucial I for Independent.

It's a massive shame, bordering on criminal negligence, that still so little is being done about educating the masses about investments, and the investment sales force.

JuicyJesus

Archi_Bald wrote: »

It's a massive shame, bordering on criminal negligence, that still so little is being done about educating the masses about investments, and the investment sales force.

That was more or less the whole point of RDR. If you're whole-of-market you are an IFA, if you're not you're an FA. If you are the latter you must make it plain and obvious from your very first meeting with a new client that you are choosing from a restricted range of products and services. Simple and clearcut.

kidmugsy

There are savings plans described if you scroll down to p45 onwards.
http://www.theaic.co.uk/sites/default/files/statistics/attachment/AICStats31Aug2013.pdf

jimjames

youtellme90 wrote: »

I just wish there was a way to go in and say "show me your S&S ISAs and the associated fees" then let them transfer the money - as if you would with online banking. But I guess it's not as simple as that with S&S.

There is. It is the DIY option. If you are using an adviser they need to understand your needs and requirements as well as attitude to risk so an off the shelf isn't appropriate.

But remember a S&S ISA is purely a wrapper and there are thousands of options to put in it.

Some idea of the range here http://www.hl.co.uk/investment-services/isa/where-can-i-invest

Consider an ISA as a shopping bag that protects everything inside it from tax. It would be similar to going into a supermarket and randomly chucking items inside. When you get home you are unlikely to have anything you are able to make a meal with.

As with an S&S ISA you need to have funds or shares that combined make a balanced portfolio taking into account the items above. It doesn't need to be complicated and some of the DIY platforms like HL above have ready made portfolio suggestions. But you will only get that from DIY not using an adviser.

BLB53

DIY investing is fairly straight forward so long as you keep it simple and are organised and disciplined.

For a start, check out some of the articles on https://www.monevator.com

Secondly, get hold of 'The DIY Investor' - review on diy investor http://www.diyinvestoruk.blogspot.co.uk/2013/10/the-diy-investor-new-book-review.html