S&S ISA by financial advisor - opinions needed

ValiantSon

bcfclee27 wrote: »

Thanks all, you have put my mind at ease with my investments.

Am going to leave it as is and see how things go.

In a few years once all the money the IFA has been shuttled into the S&S ISAs I will have about 40k left to invest.
This gives me a couple years to research and then I plan to have a go with that 40k on my own.

Best of both worlds if you like.

If it were now I'd either split between HSBC Global Strategy and VLS 60 or put it all in HSBC.
The reason I'd favour HSBC is it dilutes my uk exposure.

What are people's thoughts on this ?

Kind Regards
Lee

If you were now making the investment and would go with HSBC Global Strategy or Vanguard LifeStrategy then why not make the switch now? Ditch the expensive IFA and accept the costs so far as a loss that, with more research, you could have avoided, but that you will be saving a lot in future costs. I don't understand why, if you now favour a different investment strategy, you would stick with the old one.

GreenSnake

capital0ne wrote: »

You can see why IFAs get a bad reputation, he's just put your money into a couple of 'canned' portfolio's which look a bit dubious. All those 2% holdings seem a bit pointless, they will have very little affect on balancing your portfolio.
Keep it simple, pick your ratio of equities to fixed income 60:40 50:50 etc and just pick say 5 ETFs/ITs to cover UK/Global/Property/Fixed Income.

And what exactly does your IFA do for £62/month (plus VAT no doubt)? I would be willing to bet all he'll do is to print out a statement and make few adjustments - maybe change cash to 3% and property to 3%! And of course there will be dealing charges.

Good luck and remember - KISS

A lot of the large funds have those kind of small 2% holdings. I do agree though, it's a kind of neither here nor there position. Maybe the fund managers got offered a cheap price on something? 2% of a few billion dollars is quite significant though.

Thrugelmir

username12345678 wrote: »

I did ask the Brewin guy why they went so heavy on UK equity income and it seems that’s what many investors are comfortable with.

Foreign equities introduce currency fluctuation into the risk equation. If you had bought Apple on 31st May 2017 @ $153 a share at an effective exchange rate of $1.29. For £10,000 you could have bought some 84 shares.

Although Apple is now priced $171. An increase of 12%. Valuing your holding at $14,364. In sterling terms those dollars only convert to £10,187 (@ $1.41). A gross gain of only £187 or 1.9%.

Reduction in income to. Currently quarterly dividend would have reduced from 49p to 45p. When converted into £.

Only used Apple purely as an illustration. Stocks performing less well could be underwater so to speak.

capital0ne

dunstonh wrote: »

What makes you think cheap is best?

Our model portfolio has consistently beaten VLS60 despite being more expensive. Costs are certainly important but they are a secondary consideration to how you invest. And is that the same Vanguard that has just been caught hiding over 50% of its charges on the VLS funds by not declaring them in the OCF?

And if one of my clients was to follow your free advice, they would get less. Plus, they would have issues with CGT (when you consider the value a typical IFA investor has)

Point 1. People often confuse the word 'cheap' when they mean cost effective.
Dunsty old boy, could you post some information on your model portfolio and show us figures how it has beaten VLS60 over the last three years. When you post the figure on say a £100k portfolio will you include the IFA charges, VAT and so on.

Could you also tell us all what issues people might have with CGT and how your service could help.

chrisgg

Brewin have recently announced they're moving to a 'manager of managers' model in their portfolios, which involves them selecting specific fund managers to run Brewin funds (which then form the overall portfolio). This approach can reduce cost somewhat, but hugely sacrifices the flexibility of the portfolio. It's the same approach as SJP use.

If they want to ditch the fund, they can't just sell it, they have to replace the manager of the fund. Not only is this an administrative burden, but the new manager has to spend time restructuring the fund, which can take time, especially if the fund holds stocks with liquidity constraints.

dunstonh

Dunsty old boy, could you post some information on your model portfolio and show us figures how it has beaten VLS60 over the last three years. When you post the figure on say a £100k portfolio will you include the IFA charges, VAT and so on.

It will cost you £2000.

Could you also tell us all what issues people might have with CGT and how your service could help.

it will cost you £2000.

Actually, for you, make it £20,000 as I have got to the stage in my career where I can choose who I deal with.

bcfclee27

ValiantSon wrote: »

If you were now making the investment and would go with HSBC Global Strategy or Vanguard LifeStrategy then why not make the switch now? Ditch the expensive IFA and accept the costs so far as a loss that, with more research, you could have avoided, but that you will be saving a lot in future costs. I don't understand why, if you now favour a different investment strategy, you would stick with the old one.

Because I don't really know what I'm doing and it would be a total punt on my behalf.
At least this way I can keep using the investor route who should at least know more than I do and see how that pans out and at the same time have a smaller punt on one I like the look of.
Having said that I only "like the look of HSBC" because of opinions on here.

Tcquins

Don’t think there is anything enormously wrong with Brewin’s Model Portfolio Service. There’s good underlying diversification and the charges are pretty reasonable. Think perhaps a 0.75% ongoing charge for an investment portfolio is a bit expensive. A lot for IFAs depends on how MiFID II evolves and the added costs.

DIY investing is all well and good, but most tend to overreact to a lot of market situations (sudden falls) by encashing part or all of their portfolios, or they have an enormous level of churn in their portfolios chasing the number one performing fund rather than sticking with investments through temporary dips.

There’s room for both DIY and IFAs. Yes, if you’ve got the expertise and patience and understanding of your level of risk in your investments then you can do it DIY and save yourself a lot. A lot of DIY investors make some pretty dumb calls, on asset allocation and churn.

Good IFAs can look after this all for you and deal with various other areas to benefit you (use of allowances, monitoring CGT etc etc.)
That’s not to say there aren’t still some charlatans in the industry who will charge for naff all.

If you want to go down the IFA route there’s no harm in speaking to a couple of them before choosing one IFA to manage your affairs.

ValiantSon

bcfclee27 wrote: »

Because I don't really know what I'm doing and it would be a total punt on my behalf.
At least this way I can keep using the investor route who should at least know more than I do and see how that pans out and at the same time have a smaller punt on one I like the look of.
Having said that I only "like the look of HSBC" because of opinions on here.

I'd suggest doing some research then!

I'd also reiterate that you seem to be paying well over the odds at present.

Prism

Audaxer wrote: »

Yes, we don't yet know how the likes of VLS60 or HSBC Global Managed would fair in an equity crash. In a crash similar to 2008 I would hope they would not fall more than 25 to 30% but who knows.

One thing to note is that VLS 60 has 70% of its bonds in government bonds and 20% corporate whereas HSBC Global Balanced is 65% corporate and 20% government bonds. The means that about 25% of the whole VLS is basically making no money but should be safe during a crash. HSBC is the more risky of the two which is probably why its performance has been better recently.