Need help investing / saving £450,000

Wilkins

gadgetmind wrote: »

Sorry, but only a week ago we had someone here wanting to put £500k into an investment bond and the IFA was quoting 3% up front and then ongoing management fees of around 0.5%.

And this isn't a one off, we still case after case after case of real world IFAs coming up with these sorts of figures.

I'm not anti-IFA just anti those who refuse to wave bye-bye to their 3%-5% up front and 0.5% trail for investing in a portfolio of high TER active funds.

If true that is shocking, but it is not what is implied by the MSE main site. I would certainly not condone OP to consult an IFA unless it is based on a single upfront fee based on an hourly rate.

grey_gym_sock

gadgetmind wrote: »

However, I do think the OP needs to look at mainly using assets other than cash for the bulk of this money, which means they either need to learn the fundamentals of investing (one book, 3-4 hours, job done!) or use an IFA. Or even better, do both.

absolutely.

DIY is a realistic option, and can save a lot of money when you're dealing £450k.

however, it takes a bit more than following a rather inaccurate prescription in 1 forum post. read a book, or perhaps have a good read on http://monevator.com/

innovate

For someone who hasn't got the first clue about investing, and doesn't want to skill themselves up, paying 3% upfront and 0.5% annually thereafter to an IFA might well be the least worst alternative. It's almost definitely a lot better than investing into something someone on some Internet forum suggested. As long as they are sure they are actually dealing with a reputable IFA.

However, it isn't actually very difficult to acquire at least some rudimentary knowledge about investments, which will then enable you to make some more informed decisions. Such as whether you can do it all without an IFA, or what sorts of questions you want to ask your IFA, what sorts of answers you expect from your IFA etc etc etc

jimjames

doughnutmachine wrote: »

why don't you have a look at this (post 212)? it seems to back up my 3% initial fee and 0.5% annual fee?


https://forums.moneysavingexpert.com/discussion/287063


*cough* what is 3% of 450k then? is it not £13,500?

The thread started in 2006 way before RDR.

Anyway hopefully what this thread has shown the OP is that if they are looking at using an IFA then check out the charges first. I doubt (but happy to be proved wrong) that the cost would be anywhere near £13.5k.

Personally I use DIY platforms but unless someone is particularly interested in doing their own research they may want to use an IFA. I might DIY for investments but happy to pay someone to do other jobs for me when I know they can do a far better job that me for decorating or car maintenance for example

doughnutmachine

jimjames wrote: »

The thread started in 2006 way before RDR.

But the post about the 3% initial fee and 0.5% annual fee was dated December 2013.....


Is there some law that a recent internet forum post should be ignored if the thread it was posted on was started a couple of years earlier?


Edit, just saw this:


"However, he says, three likely charging structures are in the picture. One option is a percentage of the investment made. "A lot of people are talking about 3% with a 0.5% annual charge or retainer if the client agrees to an ongoing service," he says."


http://www.iii.co.uk/articles/66195/financial-advice-how-much-will-you-be-charged

gadgetmind

jimjames wrote: »

I doubt (but happy to be proved wrong) that the cost would be £13.5k.

I can't find the sodding thread, but someone 1-2 weeks ago was deffo asked for 3% of their £500k for setting up a simple investment bond.

Yes, the rules have changed, but not all of the guys with the pinstripes and gold watches have taken in board.

jem16

doughnutmachine wrote: »

But the post about the 3% initial fee and 0.5% annual fee was dated December 2013.....

And I assume you noted that 3 IFAs answering that post all said that 3% on £500k was excessive?

The point is, like every other business around, is to shop around when looking for an IFA.

AlwaysLearnin

gadgetmind wrote: »

I can't find the sodding thread, but someone 1-2 weeks ago was deffo asked for 3% of their £500k for setting up a simple investment bond.

I think you're probably thinking of the same one that doughnutmachine refered to:

https://forums.moneysavingexpert.com/discussion/287063

Aegis

doughnutmachine wrote: »

Lol, it's funny, I think going to an IFA with 450k is bad advice. If the OP goes to an IFA the IFA will charge an initial 3% then an annual 0.5%. Or £13,500 and £2250.....


All for dumbed down advice that's designed so that the client cant sue the IFA.

I work in central London and wouldn't charge that fee. Most IFAs don't use the 3%/0.5% model any more, so putting someone off IFAs because "that's what they charge" is highly disingenuous.

gadgetmind

AlwaysLearnin wrote: »

I think you're probably thinking of the same one that doughnutmachine refered to:

Ah, yes many thanks.

No more percentage fess/commissions, just reasonable hourly rates from now on, my backside!