is my portfolio ok ??.??

Sony_smartphone

Hi to all,, first of all I, ll give a quick fill in to my situation,,
I had invested before using a financial adviser , we invested through a platform and went with AXA wealth, I had 100k which he advised to split between 3 different funds,, F&C NAVIGATOR DISTRIBUTION C inc
PREMIER MULTI-ASSET MONTHLY inc C
INVESCO PERPETUAL DISTRIBUTION Z inc
I stayed invested for 2 years and was happy to receive £300-£350 per month income aswell as my capital increasing by £3000 approx,, Unfortunately a situation arose that I needed the cash so I had to cash in 98% of my investment.
This situation eventually sorted itself out so I now find myself with about £80k in the bank. I would like to reinvest using the same 3 funds but this time not use the F.A..his costs were £70 per month ongoing adviver aharges aswell as AXA, s monthly fee,,,, I am reasonably happy with these fundsvas they have been kind to me up to now ,, I just want to ask for some oplnions on these funds to see what
other people think,,, many thanks ,,, a cautious investor

Linton

The funds are very similar being in the same "20%-60% mixed investment" sector and as such seem reasonable for a moderately cautious inexperienced investor who doesnt want to get involved with the details. I dont see much point in paying for ongoing IFA advice with these investments.

One detail is that the equity seems to be predominantly UK, which is not a good idea in my view. Another detail is that you should be able to find equivalent funds with lower charges.

However these are secondary concerns. Far more significant is your decision after 2 years to cash in 98% and then reinvest 80%. As it happened you were lucky and didnt crystalise a serious loss or miss out on a large rise in prices. At other times it could have been very expensive. Investing is for the long term and so you need sufficient cash in an emergency fund (say 6 months living expenses) to cover "situations". Do you have this level of safety net?

Sony_smartphone

Thanks Linton for your advice,, I do have a safety net , we have around 16k for the " just incase fund" and we have a wage of around £12k pa, I, ll be 56 next month and I have looked into my pension its a defined benifits scheme, , the transfer value is £175k , I got a quote for early retirement in jan this year , my pension provder would pay me a pension of £6500 pa or £26k lump sum and a pension of £3,500 pa , so if need be I can access this. I was wondering with the new pension reforms would these quotes be a little better ?? Maybe you could shed some light on this,, you said I could get similar funds with lower charges , could you elaborate,,, and thanks again

Linton

Sony_smartphone wrote: »

Thanks Linton for your advice,, I do have a safety net , we have around 16k for the " just incase fund" and we have a wage of around £12k pa, I, ll be 56 next month and I have looked into my pension its a defined benifits scheme, , the transfer value is £175k , I got a quote for early retirement in jan this year , my pension provder would pay me a pension of £6500 pa or £26k lump sum and a pension of £3,500 pa , so if need be I can access this. I was wondering with the new pension reforms would these quotes be a little better ?? Maybe you could shed some light on this,, you said I could get similar funds with lower charges , could you elaborate,,, and thanks again

As the pension is defined benefits your pension at normal age retirement is guaranteed, and is then reduced according to scheme rules and actuarial advice to an equivalent for early retirement. Depending on the scheme, early retirement may or may not be financially a good deal. It would be helpful to see the pension at 65 figures.

The pension reform wasnt really about DB pensions. In theory you can take your £175000 elsewhere and either buy an annuity or use the new freedoms to drawdown the money over time. For most DB pensions we see here transferring is a bad deal. However, your Transfer Value does look fair. The value of it and the offered pension will change over time as they are dependent on interest rates - lower interest rates can mean higher transfer values.

Whether you should transfer will need careful analysis and a review by an IFA. Without the latter no pension company will accept a transfer-in of that size. My view is that such transfers should not be done without full IFA backing and without significant experience of investing and money management as you cant afford to get it wrong. You wouldnt get a better inflation matching annuity than your pension offer and I dont think you would get a sustainable significantly greater income through drawdown, though it would give you more flexibility and the likelihood of some money being left as an inheritance at the cost of greater risk

The reduction of £3K in the pension for a £26K lump sum looks like a seriously bad deal. Taking the pension instead of the lump sum you would be in profit after 9 years, and if you are in good health now you could reasonably expect to live til say 85. Are the figures right?

As regards other funds, you can look at trustnet.co.uk and search on the "mixed investment 20-60%" sector. Just from a quick look myself the cheapest I found was the L&G Mixed Investment fund with charges (OCF) of 0.43%. The F&C navigator fund had charges varying from 0.73%-2.4% depending on exactly which version you held.

Sony_smartphone

Thanks linton,, I checked the exact figures for my early retirement quote,, option "A" full pension of £6396 pa,,, or option "B" refuced pension of £3934 and lump sum of £26094 there are all sorts of benifits built in also like increasing inline with inflation and death benefit for spouse,
all the research I've done is telling my its best to leave my DB scheme be and not to transfer out,,, the figures for taking it when I'm 60 are much better so I, ll put it on the long finger for a while,,regarding the investment funds I, ll have a look at the same type of funds on trustnet,, so once again for your help, ,,

Sony_smartphone

Sorry linton I forgot to address your point about cashing investment in early, ,,when I set up the investment I had every intention of leaving it there for a minimum of 5 years, but a family situation arose beyond my control and I needed the cash,, if the investment had been in the red I would have left it but I got out at the right time got my money back and made some also aswell as my monthly income,, just lucky,,, but I take your point entirely investment shouldn't be a short term experience, ,, thanks