What will a financial adviser do for me?

AndyT678

Jon_W wrote: »

I also see that the bank I bank with has various passive tracker products, I might see what they recommend as I might be able to obviate the costs of a third party advisor. Obviously, any advice will have to be contextualised as not impartial though.

Really bad idea IMO. And if you already know that the opinion is tainted why bother asking for it. They will tell you to buy their products.

Jon_W wrote: »

Can I ask another basic Q to everyone? Fund charges/TER is quoted in figures like .25%, .15%, etc. Is this that percentage of the value of your holding or of any annual gains which accrue?

It's a % of the total value. The fund managers want to be paid whether your investment goes up or down.

I also think you might be skipping ahead a bit. The point of an IFA is for them to understand your future needs, tolerance for risk, current and future investment potential etc... and to tailor a specific solution that should be exactly relevant to your particular needs.

You have read a few chapters of a book and decided that the answer to all that is 80%/20%. If you're certain that you've arrived at the right answer to bet your financial future on then fine, crack on and look for funds and platforms. If not then maybe have a free introductory chat with some IFAs to understand the service that they provide.

badger09

Eco_Miser wrote: »

Hourly rate or percentage of funds invested (not gains)

You have until 5th April (but don't leave it to the last minute) to put £[STRIKE]15400[/STRIKE] £15240 into an ISA before that opportunity expires. If you haven't decide on a platform by then, you could put it into an instant access cash ISA, and have your S&S ISA manager (platform) transfer it when you have decided.

You then have from 6th April 2017 to 5th April 2018 to put a further £20000 into an ISA, making £35400 safely protected form the taxman for as long as it stays in the ISA. The rest of your money will have to be invested 'unwrapped' or put in a pension. The same platform will be able to handle all three types of investments. The link to Monevator's comparison of platforms has already been given.
From April 6th 2018 and yearly thereafter you will be able to move a further £20000 into the S&S ISA to protect it from taxes.

Fixed the figure for you, otherwise I agree.

OP put your current year ISA allowance £15240 into any instant access Cash ISA now and you've not wasted this year's allowance.

Then, when you've done some more reading and asked some more questions, you can decide what investments you want to hold in your S&S ISA and where you want to hold it.:)

dunstonh

I also see that the bank I bank with has various passive tracker products, I might see what they recommend as I might be able to obviate the costs of a third party advisor.

Why would you want to pay a tied adviser selling own brand products when you can pay an IFA who can recommend from the whole of market?

Bank branch retailed investment products tend to be awful. Both in quality and cost. Even when using known brands. e..g Lloyds retailing Scottish Widows had more expensive versions than the SW products retailed via IFAs. HSBC products branch products were not the same as the whole of market HSBC products.

Jon_W

I must admit I am liking the sound of the Vanguard LS80. It matches the 8020 mix and as an OEIC rather than an ETF I could just put money in and leave it and not have to worry about reinvesting any proceeds.

AlanP_2

The latter part of Tim Hale's book can be a bit heavy going as you say but at least it has opened your mind up to possibilities and encouraged to investigate further which is a plus in my mind.

The problems with the sort of defined asset allocation / fund spread in any book are twofold:

1) They cannot cater for every individual set of circumstances and are more of a general guideline

2) They may have made sense at the point of writing / publication but things change.

So, essentially, you need to consider how valid those recommendations are given your circumstances, objectives and view of the world.

Take the example of my wife and I.

Mid-50s, small mortgage on family home, kids left home. Both have pretty good Defined Benefit (DB) pensions to look forward to plus full state pension.

My wife has an AVC associated with her DB pension, essentially that is a group scheme offered by her employer that works in broadly the same way as a Personal Pension (PP) or Self Invested Personal Pension (SIPP) - You choose how much to put in and choose (from a small number) of funds what to invest where.

Hopefully the investments grow as stock markets and/or bonds go up in value and dividends are automatically reinvested by the fund provider.

The limited number of fairly vanilla funds offered (as no employer wants people coming back in 20/30 years time saying why did you let me invest all my money in an Oil Fund when it was obvious that was high risk and could end up worthless after some clever person somewhere develops a viable alternative to oil in the next 20 years) wouldn't allow us to build the model portfolio Tim Hale suggests.

Most have far too high a UK bias for a start, plus as there is a "fixed date" (retirement) which is not that far away when the pot has to sold and turned into cash an 80/20 split of Equities : Bonds becomes less and less an optimal split as that date approaches. With up to 36 months to go I would not want to be 80% in volatile equities and would prefer to be moving closer to "cash equivalents" and "banking" the profits.

So we have gone for fairly cautious options in the main as we are not trying to obtain the greatest return compared to everything else but am aiming for steady growth with a set date in mind of when we want to cash it in (our objective) which is <8 years away.

So what we have done is to think of the DB pensions as being bond equivalents - safe, steady CPI growth, no volatility, does not go up or down in value relative to Equities or Real Estate or Commodities.

We also have a standalone SIPP and ISAs which do not have a set target date to cash in, more general savings with the SIPP used as it is tax efficient.

To counteract the UK bias in the AVC there is a much, much lower UK content in those and <4% in Bonds.

Overall there is a reasonable amount of diversification across the sum of all the pots that are aligned to the dates we anticipate dipping into them.

The point I am trying to make is Tim Hale doesn't know we have DB pensions, he doesn't know what timescales we are working to, he doesn't know how much we will need at what point in time and so on and so on.

Before you start to think about which funds think about your circumstances and objectives (as a family if that is relevant). For example what is your pension situation / your tax situation / mortgage / age / dependents etc?

Take your time, although suggestions to get into Cash ISA this tax year make sense, there is no need to rush in, you have time to think about things and continue to investigate and ask for clarifications on here.

ColdIron

Jon_W wrote: »

as an OEIC rather than an ETF I could just put money in and leave it and not have to worry about reinvesting any proceeds.

Your platform will be able to reinvest any proceeds if you instruct them to

Eco_Miser

badger09 wrote: »

Fixed the figure for you, otherwise I agree.

OP put your current year ISA allowance £15240 into any instant access Cash ISA now and you've not wasted this year's allowance.

Then, when you've done some more reading and asked some more questions, you can decide what investments you want to hold in your S&S ISA and where you want to hold it.:)

Thanks, I'm getting senile; I'll be glad when the new year means nice round figures.

OP, also keep some of your money in cash spread over current and regular saver accounts - you can get 5% on some and 3% on more, taking some £30,000 average over a year if you use them all.

Linton

Jon_W wrote: »

Can I ask another basic Q to everyone? Fund charges/TER is quoted in figures like .25%, .15%, etc. Is this that percentage of the value of your holding or of any annual gains which accrue?

Fund charges are as a % of the holding. They are already included in the published fund price, you wont be sent a bill.

Jon_W

Thanks Eco Miser. I think my bank, HSBC, has instant access ISAs. I'll give them a call and set one up. It's criminal just keeping it in a bog-standard saving account where the interest is literally coppers.

jimjames

Jon_W wrote: »

Thanks Eco Miser. I think my bank, HSBC, has instant access ISAs. I'll give them a call and set one up. It's criminal just keeping it in a bog-standard saving account where the interest is literally coppers.

I think you'll be disappointed if you expect a cash ISA to be any different!