500k to invest advice please

dunstonh

the off the shelf option was a 250.000 in santander max 70% shares porfolio sa and
250.000 in santander atlas portfolio 4 ia the first with 1.48% charges and second with 1.71% plus advice fees.

That is very expensive. But to be expected with a bank product. Just for benchmarking, you would expect around 1.2x% (platform, funds, adviser costs all included) for an IFA. Remember the bank is not giving full advice either. It is limited only to the product they arrange.

IFAs are independent and have a wide spread of charges as with any profession. Some will be damned expensive. Others very good value. So, you usually have to phone around several.

3% initial with 1% ongoing on £500k is far too high. 0.5% ongoing is the dominant figure with initial aiming to be around £2k to £5k.

atush

paolomol wrote: »

Hi thanks for your reply.
I have seen an IFA but, maybe it`s me, before getting any advice you need to commit. what is it clear is only the fees: 3% of 500.000 plus if more contribution to fund 3% plus ongoing service 1%
plus I suppose fund charges.
are those normal charges or depend on IFA?

Thanks

Paolo

That is expensive. On 500K i would be looking at a fixed fee upfront, much less than 3%. More like 5K.

1% ongoing is also expensive, I would be looking to pay .5%

bostonerimus

paolomol wrote: »

I have no time neither the ability to make this money grow so I want a kind of invest once and forget about it.
Could someone give me any advice please.

My advice would be to sit down with some books or a few websites and learn something about investing....get the ability and make the small amount of time to manage your money.
It isn't difficult at all.

Do a budget so you can manage you spending
Pay off all high interest debt
Put money in the bank for emergencies......maybe 6 months to a years of spending.
Many people would use the 500k to max out pension contributions, but as you say you want this money to be for your children in 10 to 15 years you'd need to think about that but definitely max out your ISA contributions and maybe invest anything left over in regular accounts.
To start with a low cost multi-asset fund would be a simple choice and the VLS range you mention are good.

If you are sensible and keep things simple you can do this yourself without spending large amounts every year on financial advice.

The trickier part of your question is making the money available to your children in 10 to 15 years time. How do you want that to happen. Will you just gift them money from your accounts and pay for things or are you going to put it in trust or are you just going to leave everything to them when you die?

Audaxer

dunstonh wrote: »

Just for benchmarking, you would expect around 1.2x% (platfom, funds, adviser costs all included) for an IFA.

I'm actually surprised that some IFAs might only charge 1.2% per annum for total costs, as the average ongoing costs for my active funds is probably about 0.75%, and with my 0.25% platform charge the DIY route for active funds is not much less than if I had gone through an IFA.

I think the difficulty would be finding a good IFA as the cheapest might not turn out to be the best.

Malthusian

Audaxer wrote: »

I'm actually surprised that some IFAs might only charge 1.2% per annum for total costs, as the average ongoing costs for my active funds is probably about 0.75%, and with my 0.25% platform charge the DIY route for active funds is not much less than if I had gone through an IFA.

IFAs should be unlikely to recommend spending extra on active management for no reason. (Unlike vertically integrated tied salesmen.) There is very little reason for fund costs to be significantly higher than 0.3-0.4% for a diversified portfolio.

I think the difficulty would be finding a good IFA as the cheapest might not turn out to be the best.

There is zero evidence that an IFA charging 0.5%pa will give better advice than one charging 1%pa. As long as you are in the 0.5 - 1% range, there is virtually no relationship between price and quality of advice.

This may sound contrary to A-level economics but A-level economics applies to whole populations. We are talking about a niche market.

Afraid_of_Kittens

Never put all your eggs in one basket. Diversify to spread the risk.

I had a friend who put everything into Halifax shares because he thought the bank was as 'safe as houses' and they provided a safe regular return.

He wasn't happy when he saw his £10 shares plummet in value to 11 pence.

He became very wealthy to very poor in a very short time.

andy001

With such large sums involved, you are better to get IFA advice who charges by an hour or % age
best wishes

atush

If you live and work in t he UK, I would invest in Pensions and S&S isas for each family member.

put cash in interest paying current accts, regular savers.

You need an IFA who will price on the amount of hours the report/advice will need and not a % of 500K.