Investing a lump sum to generate retirement income - do I need to use an IFA?

rudebhoy

jem16 wrote: »

As others have said, you don't need an IFA but you may feel happier to have one advise.

In saying that £3.5k seems a lot for advice. I realise that it's less than 2% but with larger figures it's not wise to look at the percentage rate. I'm sure you could do better if you have a look around for a different IFA.

As to the fund, although it's a single fund it is a multi asset fund. Would you be expecting to use exactly the same fund if going it alone or would you be looking at something else?

my initial plan was to use the same fund, but have been told it can only be bought through an IFA.

jem16

rudebhoy wrote: »

my initial plan was to use the same fund, but have been told it can only be bought through an IFA.

Quite probably, yes.

There are other similar multi asset funds that can be used for DIY investors using DIY platforms. Most of the insurance company options like Prudential require an IFA to access their funds.

Have you asked the IFA the costs incurred so far? If it's got to the stage of advising on particular funds, you may find that the majority of that £3.5k has already been "spent" as you're paying for advice, not for products.

So if not going for the same fund, what are you going to do? Are you going for a single multi asset fund or are you going to choose funds to build your own portfolio?

dunstonh

and putting 75% of my eggs in one basket also doesn't seem right.

if its multi-asset then its not one basket. If it was single sector then I would agree.

atush

rudebhoy wrote: »

to be fair to the IFA, the discussions I have had with him have helped me work out the right strategy for me. I have had a few reservations tho - notably when he recommended I transfer one of the DB pensions into an income drawdown scheme, which I rejected as an unnecessary risk, and putting 75% of my eggs in one basket also doesn't seem right.

I am happy to pay him for what he has done to date, but will take it from here myself.

I can't imagine a good IFA telling you to transfer a DB pension, unless you are of ill health and have no spouse. reg flag.

atush

dunstonh wrote: »

if its multi-asset then its not one basket. If it was single sector then I would agree.

It is multi asset but that doesn't mean it is good value.

And I haven't looked up what sectors that fund invests in (they only just named it), and the timing of the fixed assets within it.

Not impressed with this IFA at all.

rudebhoy

atush wrote: »

I can't imagine a good IFA telling you to transfer a DB pension, unless you are of ill health and have no spouse. reg flag.

am in good health and my missus is a good bit younger than me, so, even though he gave me a projection where income drawdown would pay out more if we lived to our late 80s, it was pretty marginal and I couldn't see the point in taking a risk when I didn't need to.

The transfer value was over 400k so did wonder if he was just after a % of that ...

rudebhoy

atush wrote: »

It is multi asset but that doesn't mean it is good value.

And I haven't looked up what sectors that fund invests in (they only just named it), and the timing of the fixed assets within it.

Not impressed with this IFA at all.

it does appear to have performed well consistently and the risk rating is low, which was why I was attracted to it

http://www.moneywise.co.uk/fund-information/Pru-PruFund-Growth-Fund-Pn/DBFS2

Your_Hero

You may wish to check the sector it is placed in before judging how relatively well it's performed. It is currently in the "unclassified" sector and there's probably a good reason to it (I don't know why). Looking at the R-squared (measures how closely correlated it is to benchmark) it is 0.01 which means that the sector is an unsuitable comparison for performance. It also means the Alpha and Beta ratios are unreliable in this instance.

atush

rudebhoy wrote: »

it does appear to have performed well consistently and the risk rating is low, which was why I was attracted to it

http://www.moneywise.co.uk/fund-information/Pru-PruFund-Growth-Fund-Pn/DBFS2

If it performed well for its sector in both the recession and after during the run up, then it could be a good choice for you- if you go via an IFA.

but just 2 funds for 250, plus telling you to transfer a DB pension together are red flags for me. Maybe not for others though?

jem16

atush wrote: »

It is multi asset but that doesn't mean it is good value.

Nor does it make it bad value. However I think the point was that using one multi asset fund is not bad investing in the way that a single sector fund would be.

Not impressed with this IFA at all.

The problem is that the IFA has all the facts and we don't so it's difficult to say what is good or bad. The OP does however sound like someone for whom a multi asset fund may be the best choice.

atush wrote: »

but just 2 funds for 250, plus telling you to transfer a DB pension together are red flags for me. Maybe not for others though?

Multi asset fund use doesn't cause too much concern for me especially coming from an IFA who has to also consider the investment experience of the client.

Transferring a DB pension would raise questions but these have certainly been pointed out to the OP in a previous thread.

I would perhaps consider seeing another IFA but it depends on how far forward this one is with regards to fees that would be due so far and would have to be paid.