Significant money to invest.

Archi_Bald

Many of the answers you got were from (I)FAs, so you would expect there is a bias towards paid advice. I am not an (I)FA myself and have plenty of time on my hands so am happy to DIY a larger sum than yours. However, if I had a fulltime job and/or a young family, I would probably hand the matter to an IFA as there are only so many hours in a day.

KPLpard

Absolutely Archi Bald. I work relatively long hours and have a 9month old at home so plenty of things to keep my time occupied.

I do enjoy reading about investment opportunities and will perhaps keep a small amount back to 'play with'. Seems sensible to delegate to an (I)FA to begin with though.

Archi_Bald

I think it is imperative to read up about investments if only to be able to have an informed discussion with your IFA.

I wouldn't invest in anything purely on the basis of having read about it in the papers, a magazine or on a website. All you get is the opinion of the journalist who has not been able to assess your situation, and, in any case, isn't qualified to give advice.

Bastiat

KPLpard, if you are a higher rate tax payer and you won't need the money until retirement then you should consider putting some or all of it into your pension or a SIPP if you don't have one. That way you would get the 40% tax credit.
Personally I would try to keep the cost down as much as possible as fees are the only sure thing in investing and steer clear of financial advisers and active funds who will just eat away at your capital and provide no useful services. If they knew anything more than the average Joe they would be busy getting rich investing their own money instead of charging you to invest yours.

KPLpard

Hi Bastiat, thanks for your reply.
I am indeed a higher rate tax payer. Whilst I take your point and realise it would be worth using a SIPP to protect from tax, I get a pension through work and may need these funds to take the next step on the property ladder so dont feel like i can tie them up for that long.

Re. your thoughts on an IFA, I agree with you to an extent and that is what has stopped me investing with one already. However, as someone else pointed out, I dont think i have the time or knowledge to invest by myself and it would be a disaster if i made the wrong choices!

Bastiat

The only useful advise an adviser will give you is to diversify. You can do that by just investing into a few passive funds. Monevator has many examples. You won't do better than the overall market but more importantly you won't do worse and won't pay any excruciating fees.

bowlhead99

Bastiat wrote: »

The only useful advise an adviser will give you is to diversify. You can do that by just investing into a few passive funds. Monevator has many examples. You won't do better than the overall market but more importantly you won't do worse and won't pay any excruciating fees.

I've never used an adviser, but assume you would get more from one than simply asset allocation. Efficient use of the family's available tax wrappers and allowances and other tax related stuff, for a start.

Also, "a few passive funds" that you allocate and re-allocate between as time goes on, is not the only way to get the investment performance you are looking for. There is a significant "active vs passive" debate and it is useful to understand both sides given you will be (or at least should be) investing across multiple markets and may decide you don't just want to use passive vehicles to invest more of your equities money into Apple than you put into anything else and allocate 40x as much in Shell as you have in Morrisons, in search of the absolute cheapest solution.

Monevator is a great resource and has a number of sample investment plans (none of which consider an individual's exact circumstances, but a variety of ideas) but is not the be all and end all of personal financial planning. It certainly has more advice useful to a newbie than the commentary on individual stocks that you may find in Investor's Chronicle, which is why it is referenced on this forum so much.However there is some irony in saying "don't follow the newspapers or hardcopy investment publications because they are written by journalists - follow this alternative media here, because it's written by bloggers".

Not intended to be a criticism of what is a decent and respected site but don't blindly follow anything you read or hear when you are investing the only £170k that you have. That goes for what the IFA has to say as well as what the internet has to say and what books on the subject have to say.

Read, learn, challenge, question and challenge again.The downside of using books and static website articles versus an experienced adviser in person, is that the page of text cannot answer back and may require you to go elsewhere to find satisfactory responses to your challenges and questions, and so you may get lazy and stop asking questions too early. However it is cheap and so for an adequately intelligent and motivated individual, DIY can work out well.

KPLpard

Thanks Bowlhead. This is indeed ultimately the issue I have. I want to do it myself, I enjoy reading about these things and consider myself to be intelligent enough to make informed decisions but yet dont quite have the confidence to be sure I am doing the right thing. This is why an IFA seems attractive. Then I go back to the fee and change my mind again!

I am reading Monevator and whilst it makes sense, I still have the same issue of pulling the trigger based on an internet article that was written in 2012!

Bastiat

bowlhead99 wrote: »

I've never used an adviser, but assume you would get more from one than simply asset allocation. Efficient use of the family's available tax wrappers and allowances and other tax related stuff, for a start.

I had a run with financial advisers provided by my employer for my pension. All you get is their very unbalanced generic allocation and the obvious tax wrapper like ISA and pensions. You are better off asking a monkey to allocate your funds. At least you can pay it with bananas.
Similarly with active funds you are just overpaying for leveraged beta.

KPLpard

Bastiat wrote: »

Similarly with active funds you are just overpaying for leveraged beta.

So you are suggesting that passive funds are the way forward?