When should you use an IFA?

EdGasket

Well maybe you can enlighten us as to what the dangers of iShares Core ETFs are please apart from the underlying risk of the indexes they track?

colsten

It might be more educational if you do the googling yourself.

EdGasket

colsten wrote: »

It might be more educational if you do the googling yourself.

Exactly the point I was making; there is nothing complicated about it that the OP can't find out for themselves; no need for an IFA.

I don't believe there are any particular dangers with iShares ETFs where they buy the underlying investments other than the usual caveat that prices can go down as well as up. Read the fund information and make sure that is what you want to invest in; job done.

dunstonh

It looks like the OP has already made their mind up.

I don't believe there are any particular dangers with iShares ETFs where they buy the underlying investments other than the usual caveat that prices can go down as well as up.

That is because its the internet and you are not going to end up responsible for the mistakes the OP could make.

EdGasket

dunstonh wrote: »

That is because its the internet and you are not going to end up responsible for the mistakes the OP could make.

No that is not fair; I have my own money in a lot of ETFs; I wouldn't advise th eOP to do something I wouldn't do myself.

I ask again, maybe you can enlighten us as to what the dangers of iShares Core ETFs are please apart from the underlying risk of the indexes they track? Or do you just like to scare people and move around in an aura of IFA mystique?

enthusiasticsaver

Thanks for the suggestions re ETFs Edgasket and I did go on to the monevator site and read a bit about them but as I am new to investing and there seems to be mixed advice I think I will start with index trackers or passive multi asset funds first. I have a lot of information to read up on but I welcome the suggestions put forward by all posters. Incidentally I am a she not a he

EdGasket

I don't know what tracker fund you have in mind but watch the costs. iShares Core FTSE tracker (an ETF) has a fee of only 0.09% and invests in the underlying shares (replicated); you won't beat that for ongoing costs I think.

colsten

Unless I am mistaken, the iShares Core FTSE tracks the FTSE 100. Having the FTSE 100 as part of a balanced portfolio could make sense but having 100% of your investment in the FTSE 100 is much higher risk than the average UK investor would normally take.

Seeing that the OP said "I am looking for low risk" it strikes me as appropriate that this should be pointed out. Of course, none of us know how the OP defines "low"........

We have an example here of the difference between an IFA and a bunch of strangers on the internet. The IFA would always start with a risk assessment, and not jump in from stage left with unqualified product suggestions.

dunstonh

No that is not fair; I have my own money in a lot of ETFs; I wouldn't advise th eOP to do something I wouldn't do myself.

Really? I advice people to do things I would not do myself because there is no one size fits all investment. People should invest to match their risk profile, capacity for loss and ability to understand. ETFs, require a bit more knowledge and understanding than OEICs/UTs. That does not make them unsuitable for everyone but you wouldnt put an inexperienced investor in there and you would have to consider the costs against alternatives.

And as mentioned by colsten above, risk doesnt appear to be consistent.

I don't know what tracker fund you have in mind but watch the costs. iShares Core FTSE tracker (an ETF) has a fee of only 0.09% and invests in the underlying shares (replicated); you won't beat that for ongoing costs I think.

One that immediately comes to mind are the blackrock trackers at 0.11% with just a spread of 0.05% and no dealing charges. The ETF you are "recommending" has a 0.1% ongoing charge (Dec 2014). a spread of 0.36% and dealing charges. So, only the ongoing charge is fractionally better. (As at Nov 2014 as spreads are fluid)

enthusiasticsaver

I have a low to moderate risk profile so would not put everything into just one index tracker as I think that is what you would define "putting all my eggs in one basket". From the reading I have done so far the advice seems to be diversify and use compounding as far as possible. I am planning on drip feeding in £12k this year into two different funds, one of the Vanguard LS funds and a Legal and General multi index fund. The lump sum of £36k I am thinking of putting it in up to 6 different index trackers and multi asset funds (£6k in each of them) Is there any disadvantage in splitting it up that much from a costs point of view? It is all in a cash isa at the moment so I am going to have to transfer it all as a lump sum to one platform (at present I am using Cavendish) presumably. I am a little concerned that my isa matures 1st May just before the election so am not sure whether investing a lump sum at that point is a good idea although hopefully if the market goes down that would be ok.