financial advisors

fender2000

if you use a financial advisor and pay him to set up an isa say Skandia and spread the money into 5 different funds and one of the funds is dramatically losing money who is responsible for keeping an eye on them, he picked the funds and he also gets 0.5% off the company annually I am new to investing in s/s so just quering and would it be cheaper to go through h&l for the next isa year as I want to invest for the next 3 yrs or would cash be a better option I have about £14000to invest

Linton

A fund dramatically losing money isnt of itself a reason to do anything (except perhaps buying some more as it is getting cheaper). If you are investing you will need to get used to your investments bouncing up and down over time.

Investing with the aim of withdrawing the cash in 3 years is a risky thing to do as you may well end up with less than you started. At the very least I wouldnt consider an investment of less than 5 years, and that is rather short term. So if 3 years really is your time frame cash is probably a far better option.

£14K is a very small amount for an IFA. It really wouldnt be worth his while taking on a £70/year job. £14K is rather small for a sensible range of funds - you might be better advised just buying 1 general fund.

Archi_Bald

Linton wrote: »

you might be better advised just buying 1 general fund.

or just keep the money in cash since, as you pointed out, investing it for a mere 3 years sounds very risky

fender2000

I agree they go up and down but when I top up my isas I pay the advisor 1% of what I put in so should he keep an eye on the funds he purchased for me also you are only allowed £11760 a year into an isa so how is £14000 a small amount I only invest in isas and the company wont accept top ups from myself so I have to pay him that's why I asked would I be better off going through h/l if I wanted s/s isas but I do agree with you cash isas would be more suitable but if the s/s are not working I can transfer to cash

dunstonh

but when I top up my isas I pay the advisor 1% of what I put in so should he keep an eye on the funds he purchased for me

No he shouldnt. Unless you pay him to run reviews (which will cost around £500+ a year) he wont do them. Its not worth it on your amount.

also you are only allowed £11760 a year into an isa so how is £14000 a small amount

IFAs typically deal with larger investors. Many wont take on small business. I know some that wont take on less than £250k. I am around £100k now but have been known to drop to £50k (nowadays only on transactional with no offer for ongoing servicing).

Linton

You put in £11760 in a year paying the IFA £117.6. How much of his time do you think that will pay for in a year for him to setup and monitor your investments?? Bear in mind it has to pay for him, his office, his expenses, and his liability insurance in case you decide to sue him for mis-selling?? A plumber in a van will charge you that for 2-3 hours work.

If you want personal attention from a professional you need to be talking of fees of £500+.

If you want an S&S ISA your best bet is to do everything yourself using an on-line broker. H-L seem cheap for the size of investment you are talking about.

Freecall

Linton is correct although I wonder if this whole thread is going the wrong way. If you are only looking at 3 years, why pay an advisor at all? Could you not just put it in a good interest bearing account for three years yourself.

Loads of advice on here what constitutes 'good' at present.

fender2000

thanks everybody but with the amount of money and fees you talk about I am way out of my depth here I better go down the pub and get some advice to me £14000 is a lot of money

gadgetmind

Yes, £14k is a lot of money, but the fraction of a percent of that going to an IFA won't pay for much ongoing advice.

However, there is good news. You really don't need this because managing a portfolio of investments isn't rocket science and shouldn't take more than an hour of your work per year if you set things up right.

That you worry about a fund "losing money" suggests you don't understand volatility nor how to make it work for you. Your choices are to pay someone to manage these separate funds, go for an "all in one" portfolio fund, or learn how to do it yourself.

Meanwhile, do nothing. Selling something that's gone down in value is like selling your house the moment that you go into negative equity.

Thrugelmir

fender2000 wrote: »

if you use a financial advisor and pay him to set up an isa say Skandia and spread the money into 5 different funds and one of the funds is dramatically losing money who is responsible for keeping an eye on them,

If the other 4 funds have gains exceeding the loss on the 5th fund. What would your thoughts be then?

paul5046

dunstonh wrote: »

No he shouldnt. Unless you pay him to run reviews (which will cost around £500+ a year) he wont do them. Its not worth it on your amount.



IFAs typically deal with larger investors. Many wont take on small business. I know some that wont take on less than £250k. I am around £100k now but have been known to drop to £50k (nowadays only on transactional with no offer for ongoing servicing).

I found this out myself when wanting to start a £50 a month pension. Nobody was interested. There is just nowhere for small to medium investors to get advice on anything money related.