IFA advice...good, bad or indifferent

bowlhead99

TheTracker wrote: »

Personally, I expect I'd need to devote a lot more "serious study and research" to buy into an IFAs basket of active funds than to buy into a passive fund product like LifeStrategy.

Well, that is perhaps because you have already done your homework and your homework said use passive trackers, and then you did some extra-credit homework and it said build LifeStrategy yourself with cheaper components and change the mix, and at no point did it scream "employ someone to help".

It would be a cold day in hell before you paid money to someone to change what you have already determined is the best thing to do, from your research which you're happy with, because of x study and y study etc. We can tell that from your username - like we can tell Dunstonh will advocate buying advice for those who don't know how to effectively DIY, because of his "I'm an IFA" signature.

However, someone who fell for the red kool-aid suggesting active management and advice served by the management and advisory industry, might have their research turn them towards that, rather than what they get if they instead drank the blue kool-aid of passive investment.

No point in rehashing the taste test here, but the OP seems to be making a good start by being inquisitive, along questions, being willing to devote some time to investigating their options and so on - all those things will stand them in good stead no matter what cocktail they end up with.

dunstonh

The charge that the lifestrategy funds are not "targeted to a particular level of risk or volatility" resembles a repetition of a canard I recall dunstonh floating. What tripe.

You may call it tripe but they are not risk targeted. They are return focused. That is a fact. Not something that can be debated either way. All multi asset funds decide which route they are going to use.

Then again, as I reflect, perhaps it is not surprising that an (I)FA (I forget which dunstonh is, this year) is swayed by marketing brochures.

Nothing to do with marketing. It is to do with risk acceptance (which includes behaviour as well as capacity for loss). Risk targeted will adjust the allocations ongoing to meet a target volatility level that the individual investor is happy with. Return focused will allow the fund to move around the risk profile. This may not be an issue for an adventurous investor but for a new cautious investor it could be. Most complaints about investments happen when the value falls and most of those are because it fell by more than they accepted. We have seen DIY investors post on this board how they investing in VLS or other things only to return later (sometimes just a week later) as they are concerned about losses and are talking about pulling out. Risk is not something that is just an advice thing. It affects DIY investors as well and it is important to know the risks of the investments you are using.

A quick reply from me re fees, its 3% on 100k, 2% on second 100K and 1% on further 300k, existing pensions are not included. Thinking on this subject we already have 60k stocks and shares ISA previously arranged on Elevate platform, would seem somewhat greedy as this has been added to the total for fee purposes.

You would want it around the £2500 or less mark.

andrewm1981

Thanks for the clarification about Freddie. It's been bugging me as he's been spamming a lot of threads with a blanket "use an IFA, no matter what posts", as every different person has needs that are different and an IFA isn't for everyone.

My concern is that I use this forum everyday, and hadn't spotted his subtle reverse psychology posts. So what about the newbie who may well look at his high post count and take his advice at face value?

Messing about with "in" jokes is one thing, and I'm not trying to be a kill joy, but this "subtle joke" could end up costing someone a ton of money.

Highly irresponsible if you ask me!

HarryFlatters

Ok could I recap please

I have lots of research to undertake, taken from links/books highlighted which will give me a broad picture of the rudiments of diy investing, if there are other worthwhile articles etc could you just let me know where.

With some more info I can decide whether I feel comfortable starting, possibly in a lo cost tracker fund on a platform such as II, or use my existing Elevate ? and add to this as and when I feel confident.

Dunstonh thank you for clarification on expected fees from someone the other side of the fence, much appreciated. I have looked at existing and proposed funds, all existing funds have additional investment with an additional 6 new chosen, hope this helps clarity. I have known this IFA for a number of years through a shared leisure interest and hoped I would be treated fairly.

Having moderated forums (in a completely different sphere ) in another past life I did pick up on BigFreddies wit

EdGasket

It can be as simple or complicated as you want. At a simple level you could open an account at say x-o (£5.95 a trade) and buy a few Vanguard ETFs and iShares Core series ETFs; both of which have low charges. That would cover most markets and job done.

HarryFlatters

Update time

I've read through Tim Hales book, he does set a strong case for passive investing, though by buying 2nd hand I only got the early edition which missed out the latest updates.
I've listened to various podcasts on my travels and read soooo much on t'internet :eek:
The overriding factor to come shining through is that no one has that magic consistent foresight and reading some of the "experts" predictions for 2016 from late 2015 are quite funny if they are believed :rotfl:
I do think I have increased my knowledge but still have a long long way to go......
My portfolio I hope would comprise approx 65% equities/35% bonds, I would like to draw approx 2-3% over the next 5 years then use both pension and fund to allow an earlier retirement continuing with a 3% total fund payment, hopefully retaining the overall fund size, with this in mind I aim to move my existing pensions into a SIPP along with a one off payment to bring my contributions up to date. I will fill up my ISAs each year, and Mrs F will invest similarly as joint accounts seem to have problems ?
I am still a little confused on tax differences between ETFs & OIECs, I currently use dividends through a Ltd Co as a portion of income and am unsure which would best suit ?
On looking through the various platforms IWeb seem to be the most cost efficient for my needs and have looked through their available funds.
Could I ask the resident experts to run through the following and give me their thoughts/alternatives please as a portfolio mix, these are taken from the funds available through IWeb though don't include ETFs
UK Equity 30%
Black Rock 100 UK equity tracker fund D Acc
Black Rock UK equity tracker fund D Acc

Other Equity 35%
Vanguard US equity index Inc
Legal & General Euro Index ex UK trust 1 Dist
Vanguard emerging markets stock index gbp Inc
Black Rock Japan equity tracker fund D

Bonds 35%
Legal & General sterling corp bond index fund C Dist
UBS sterling corp bond indexed fund class C shares Inc
Legal & General all stocks gilt index trust1 Dist

I have read another thread regarding bonds and did try to pick those with a reduced volatility but I've probably made a hash of it. I haven't set out the individual percentages but would aim for a small exposure to Japan & Emerging Markets concentrating more on the US.

All help gratefully received :A

dunstonh

Could I ask the resident experts to run through the following and give me their thoughts/alternatives please as a portfolio mix, these are taken from the funds available through IWeb though don't include ETFs
UK Equity 30%
Black Rock 100 UK equity tracker fund D Acc
Black Rock UK equity tracker fund D Acc

Class D are the more expensive ones. Your IFA should be able to access cheaper. As you would be able to on different platforms.

Why FTSE100? (given its awful and consistently bad record and poor diversification)

Other Equity 35%
Vanguard US equity index Inc
Legal & General Euro Index ex UK trust 1 Dist
Vanguard emerging markets stock index gbp Inc
Black Rock Japan equity tracker fund D

Where is Asia?

Bonds 35%
Legal & General sterling corp bond index fund C Dist
UBS sterling corp bond indexed fund class C shares Inc
Legal & General all stocks gilt index trust1 Dist

Why two similar corp bond funds? Where is high yield bonds? Where are global bonds?

What is the volatility rating of the portfolio you have built and does it match your risk profile and capacity for loss?

bigfreddiel

andrewm1981 wrote: »

Thanks for the clarification about Freddie. It's been bugging me as he's been spamming a lot of threads with a blanket "use an IFA, no matter what posts", as every different person has needs that are different and an IFA isn't for everyone.

My concern is that I use this forum everyday, and hadn't spotted his subtle reverse psychology posts. So what about the newbie who may well look at his high post count and take his advice at face value?

Messing about with "in" jokes is one thing, and I'm not trying to be a kill joy, but this "subtle joke" could end up costing someone a ton of money.

Highly irresponsible if you ask me!

Come on Andrew, if you don't know what you're doing you get an IFA. It's a no brainer.

After all, if you want your highly expensive car kept in tip top condition you pay a mechanic. Their hourl fee is probably the same as an IFA

Cheers fj

bigfreddiel

And another thing, no one is allowed to give advice on MSE.

This has been stated many times.

All we do is give our point of view, not advice.

Good luck everyone, after all everything we do is just a game where you need to follow the rules, usually unwritten fj

DrSyn

1. Have you seen these videos. It would certainly simplify your portfolio and make it easier to rebalance & monitor.

http://monevator.com/this-former-hedge-fund-manager-reveals-how-you-can-invest-for-life-in-five-quick-videos/

2. Black Rock UK equity tracker fund tracks the FTSE All Share index, this already includes the FTSE 100, so why do you have the Black Rock 100 UK equity tracker fund in addition?

3. Have you considered in your equity selection, simplifying it by using just one Index fund or ETF that tracks a World Index like the FTSE ALL WORLD INDEX ? Or else a long established and diversified global investment trust like Foreign & Colonial (FRCL), there would be the discount to consider in that case of course.

4. Why do you have two sterling corp bond index fund?