Robo or VLS?

colsten

Asking for a friend.

If you were a newbie investor, moderate risk taker, mid 30s, no debts, mortgage on own home sorted, 3 BTLs with BTL mortgage, full-time successful gambler (true even if you won't believe it), wife working full time in civil service, 3 pre-school kids, cash reserves for 24 months, wanting to invest £15K into S&S ISA to hold for the next 20 or so years: would you just DIY it with a VLS fund (60 or 80), or would you use a robo advisor?

george4064

VLS.

I'd be interested to see performance comparisons between VLS and Rogo advisors..

BLB53

Robo advisor going to push you down the managed fund route w2ith lower probability of a good outcome so no problem here - VLS80 all the way.

dunstonh

BLB53 wrote: »

Robo advisor going to push you down the managed fund route w2ith lower probability of a good outcome so no problem here - VLS80 all the way.

Why do you think that?

Al.

colsten wrote: »

Asking for a friend.

If you were a newbie investor, moderate risk taker, mid 30s, no debts, mortgage on own home sorted, 3 BTLs with BTL mortgage, full-time successful gambler (true even if you won't believe it), wife working full time in civil service, 3 pre-school kids, cash reserves for 24 months, wanting to invest £15K into S&S ISA to hold for the next 20 or so years: would you just DIY it with a VLS fund (60 or 80), or would you use a robo advisor?

Not enough to go on, what are the client's requirements?

As you might know, I run a robo proposition. So far, many clients are well informed people who want the additional service regardless of their own insight. I am getting the impression, it's something appreciated not just by 'ignorant' clients, but insightful ones too, who don't want the increased cost of HK, CS etc, and who want it looked over by someone who (hopefully!) knows what they're doing.

NLB, this is one of my robo portfolios, a more cautious one. I don't think it looks particularly 'managed'. VLS, by contrast, is. Sorry for that huge size. I'm not sure how to resize it. Rebalanced quarterly, platform, reporting, advice, funds, custody, dealing, free DFM - all for 0.82 or so, all in. I'm not saying that as a free ad; rather, to provide context.

colsten

Is that a complete portfolio, Al.? As it adds up to 94.74%. What happened to the remaining 5.26%?

Al.

There's always some held on account in cash (charges, contingency, opportunistic buying etc).

Edit: good spot for attention to detail though!

masonic

I would just DIY, but if your friend doesn't have the inclination/temperament to do the research and monitor his investments, then there are a few options available...

1) Just buy SWDA in a sharedealing account, existing BTL gives plenty of residential property exposure, use a mixture of P2P and deposit accounts as a proxy for bonds. Total ongoing costs: 0.2%
2) VLS at Charles Stanley Direct. Total ongoing costs: ~0.5%
3) Robo advisor at 0.8-1.2%

I'm not sure about Al's comment about VLS being more 'managed' than a robo portfolio - I thought the whole point of a robo adviser (being more expensive) is that the asset allocation is more regularly adjusted. VLS doesn't tend to make changes very regularly. IIRC, L&G Multi Index attempts to adjust allocations depending on market conditions. Whether you view this as a positive or negative is another question.

BLB53

NLB, this is one of my robo portfolios, a more cautious one.

Good to see a robo adviser suggesting low cost Vanguard index funds. However, I would question the overweight position for UK funds - 30% compared to just 10% for global. What would be the explanation for such a distorted outcome?

Also, what are the robo advice costs?

Al.

Get back to you both later? Good points. Currently covering myself in croissant crumbs in London and reflecting on the need for a bib.

http://langcatfinancial.co.uk/white-paper/the-2015-fe-investment-summit/

gadgetmind

BLB53 wrote: »

However, I would question the overweight position for UK funds - 30% compared to just 10% for global. What would be the explanation for such a distorted outcome?

Fairly standard home bias. Usually done for psychological reasons as people get nervous if their portfolio behaves very different to the market they are most familiar with.

I have a *very* slight tilt towards the UK rather than a true global weighting, but much of this is a mid/small cap bias.