6 Year Investment Review - Good or Bad?

BLB53

If you have tried the IFA route and found it unsatisfactory then I think the answer is to either select another IFA if you still have some faith or otherwise see if you can do a better job yourself. You obviously have some experience with your self directed efforts via the Halifax platform.

bostonerimus

Thrugelmir wrote: »

Having hindsight is a wonderful tool. Shouldn't lose sight that accomodative Central Bank policy has driven markets higher across the board. Nobody could have foreseen how this played out.

At least hindsight allows for some comparison given an assumed risk profile, everything else is just speculation.

bostonerimus

Hendel wrote: »

My requirements never changed. The changes were made because the IFA believed that: "...potentially, there is an opportunity to increase the value of your investment if you were to switch your funds. I therefore recommend..."

I followed every recommendation.

Sounds like market timing BS to me, but know that my BS meter is calibrated to go off at just about any comment made by someone in the financial industry so I am a highly biased commentator.

Can you tell us the purpose of these investments and your age as that might shed a bit more light on you IFA's thought process.

Hendel

Sure bostonerimus,

Aged 47. 50% is my ‘emergency’ fund so preserving value is important. 50% is looking for good growth over next 15-18 years as part of retirement fund.

dunstonh

At the time, they described themselves as "Wealth Managers", but today they are a "Team of Independent Financial Advisers" with no mention of wealth management.

Although, to be honest, I'm not sure of the difference.

Wealth management tends to be used by firms that are not IFAs and have a fixed investment strategy they use for everyone (albeit adjusted for the risk scale). Often from a limited selection. Its a bit of a generalisation which wont always be right but it is often worth avoiding firms that refer to themselves as wealth managers.

But in 2012, SEI Aggressive was also his first choice for high-risk investment.

One of your funds held I was using in 2012 and I still have people using it today (although as a hold rather than a buy)

Investing is about opinion. There is no best solution. There are only suitable solutions or unsuitable solutions.

I don't use SEI for example. So, I would do differently.

Forgive me for considering the possibility that it might be his go-to recommendation.

The firm have to have up-to-date research and due diligence on file for any recommendation. I could tell you the funds I would use without needing to go away and research. This is because the Governance is run every month.

The primary requirement above all else on an IFA recommendation is suitability. It is matching your needs and objectives within your knowledge and behaviour. It is not to maximise your returns. If the adviser is using Finametrica then he would be giving a solution that would fit within the volatility range of your risk profile. That risk profile would be set based on a range of questions to get the starting point and then adjusted based on your capacity for loss and indications of what your investment behaviour is. If the adviser has you down as wealth preservation as a priority then that is the interpretation they have got from you. If it is has changed, then it is time for that discussion. Maybe that discussion is long overdue. Maybe the decision is right as you are yet to invest through a major downturn. Some of the alternatives mentioned on this thread would see significant drops in the event of a downturn compared to what you have.

The key to any good relationship with adviser-client is communication. If either side fails then the business relationship will not work well and ultimately lead to dissatisfaction.

bostonerimus

Hendel wrote: »

Sure bostonerimus,

Aged 47. 50% is my ‘emergency’ fund so preserving value is important. 50% is looking for good growth over next 15-18 years as part of retirement fund.

OK, so I see why the IFA is being conservative, but maybe a bit too conservative.

As regards an "emergency fund" it's size is very dependent on your circumstances and psychology, but if you are working something like a 6 months to a year's spending in cash or ultra short term bonds is common.

What is certain in all this is that you are spending a lot on IFA fees relative to the size of your portfolio and, maybe more importantly, relative to the size of the portfolio's gains. The goal of "preserving value" is being compromised by the fees.

cfw1994

dunstonh wrote: »

Do you think IFAs wake up every morning with total amnesia and need to learn everything again?

LOL! I bet a few wish their clients would (present company very much excepted!)

Linton wrote: »

The charges do not seem outrageously high to me. The platform fee is around 0.25% and the IFA charge about 1.2% annually. The 1.2% figure seems rather high but it only amounts to £450 or so per year so the IFA isnt getting rich on the work. The key problems are the low gross returns and the small size of the pot makes IFA management more difficult to justify economically.

1.2% sounds a lot to me for this type and scale. That is 1.2% the funds need to go up just to remain level...medium to long term investing works best with the lowest fees in general (look into the magic of compounding...).
And yes, the returns given the general economy over the period have been a bit poor.

It feels to me like the OP has lost faith in his IFA, and perhaps is taking enough interest in things to consider managing it himself. Plenty of good advice and tips on here.
Certainly speaking with another IFA would be essential, imo.

IFA firm started as Wealth Management eh? I often feel such terms show organisations who are mostly interested in their own wealth: YOU will always be the one most interested in yours

fred246

cfw1994 wrote: »

IFA firm started as Wealth Management eh? I often feel such terms show organisations who are mostly interested in their own wealth: YOU will always be the one most interested in yours

A few years ago I needed life insurance. A member of my wife's family was an IFA. My wife contacted her and she produced a quote for us. As she was INDEPENDENT she had scoured the WHOLE OF THE MARKET and gave us a list of quotes from about £150 down to £35 per month. Out of interest I wondered what we would have got without her. I googled life insurance and put our details into Tesco. Only about five questions. £29. So over 25 years we would have paid £1800 more using the IFA. So I bought it with Tesco. OMG. World War 3 broke out. She wouldn't talk to us for months. We had stopped the IFA getting her commission. My wife explained that all family members were not expected to question her and we had to buy all financial products through her. I offered to pay her commission as it was only about £300 and I had saved £1800. IFAs are really only interested in lining their own pockets.

eskbanker

fred246 wrote: »

IFAs are really only interested in lining their own pockets.

Possibly, but it would be a facile argument to reach that conclusion from that one experience of a specific individual, it would be much like talking about Harold Shipman and asserting that doctors are only interested in murdering their patients....

fred246

I have been a high earner for a long time. IFAs circle around such people. They are parasites and search out people with money. I have watched them and they all exhibit similar behaviour. The IFA we saw the most of always gave false information which could have badly influenced me financially. Even when I corrected her the next time she was spouting rubbish again.