Setting up Retiree Portfolio

AnotherJoe

The only one I'd disagree with vehemently is the Blackrock FTSE 100 tracker.

This "index" is actually pretty much just driven by the top dozen or so companies in it (because they so massively outweigh the rest) which comes down to only 3 market sectors; oil/mining companies, Pharma, and Finance. Whatever those sectors do, so does the FTSE100.

And although you might think its "UK" its exposed to currency risks (thats good and bad) because most of the business those companies do is outside the UK ,so you might as well use a global market tracker instead which will spread the investment over pretty much all sectors rather than just 3, because you can't rationalise using the FTSE100 as its UK so theres no currency risk. Blackrock and many others (HSBC, L&G for example) have good low cost global trackers which I'd use instead of the FTSE100.

KT19

Thanks. The IFA did mention that most FTSE companies have their balance sheet in dollars and benefit from a strengthening $ against the £. (when they convert $ back to £ for accounts). I guess the logic is Brexit may hit the pound again? I will ask the question.

AnotherJoe

KT19 wrote: »

Thanks. The IFA did mention that most FTSE companies have their balance sheet in dollars and benefit from a strengthening $ against the £. (when they convert $ back to £ for accounts). I guess the logic is Brexit may hit the pound again? I will ask the question.

Dont worry about Brexit. Whatever happens regards that affecting the Pound, you'll see the same in a global fund (eg fund goes up when pound goes down and vice-versa). What you wont see is the over reliance on the mere 3 industry sectors (out of about 10) that is in effect the FTSE. The top 20 companies make up half the index, and the top dozen make up about 40%.

KT19

The investment platform suggested was James Hay. Does anyone have any experience with them?

KT19

Been doing some sums and it seems that my mum would be paying roughly 1.4% of the funds invested (Intially would be around £450k) for the advice from the IFA + fund charges + platform charges. Does that seem about right for a pot of this size? Appreciate the prudential investment bond is most likely pulling up the cost up abit. Basically at the point of giving the IFA the go ahead as it seems like a reasonable strategy & cost. However i am aware i could be completely wrong:(

Linton

It seems a reasonable cautious strategy to me. I share the view that the FTSE100 tracker seems out of place and think that if it was omitted all together the portfolio would not be disadvantaged. There seems to be too many funds doing much the same thing. However these are arguable details. I would not try to dissuade a relative of mine adopting the portfolio.

Her requirement for income of £15K-£16K should be well exceeded. The Prufund alone should generate a steady £14K with no tax for her to pay. Which added to her SP, her DB pension, and her private pension should give her a very comfortable old age.

atush

Personally, I feel the IFA fee of 6300 PLUS platform fees and fund charges is pretty high. Esp as half of it is in the pru fund. AS we all said before, ask for a set fee, not a % based fee on an amount that high.

Not to mention the funds that were listed, did not incl any good long running/dividend paying investment trusts. I said before these would not be suggested to you and they werent. So do consider them for her S&S isas at least.

As for james hay, not sure how they compare to others- thought I remembered them being expensive?