£300k to invest

Brooklands4

Good morning all. This is my first post. I have a retirement fund of £300k. The thing is, every financial adviser I’ve ever dealt with has ripped me off. My brother in law stole about £150k from me (long story!). Then, I got charged £17k to remove my occupational pension and put it in LV= (which is where it is now). There is a fund manager looking after it now, and he emailed me yesterday to tell me he is going to charge me £4K a year to “administer” my account. Whichever way I turn, there’s an adviser rubbing his hands and hoping to charge me for something. I’ve had enough of this, so I want to invest the money myself. I don’t need a regular salary from my investment as I’m still working. So I’m thinking of targeting growth of 3-4% a year, and re-investing. I don’t think that’s being greedy or over optimistic. Ideally, I’d be happier if I could spread the investment across a few platforms, to minimise risk. I’d love to hear from individuals who have taken control of their own retirement fund. I don’t want to pay out any more fees! Thank you in advance.

Dazed_and_confused

Which provider have you found who doesn't charge any fee at all??

Albermarle

Well you can avoid IFA fees but you can't avoid platform fees, fund charges etc.
If you mean that an IFA wants to charge you £4K a year for managing a £300K portfolio that does seem a bit strong. I think 0.5% is more the going rate but it depends on the level of service offered.

If you DIY , you save on the fees but you have to be confident that you will get similar/better results or it could be a false saving.

If you do DIY then normally not a lot of point spreading your investments across numerous platforms. The risk of a platform/pension provider going bust is minimal and you often get discounts relating to the size of your investment. Of course within the platform some diversity in the funds invested in is usually a good idea.

There are some experts on here regarding returning 4% a year in real terms so no doubt you will hear from them .

Brooklands4

Sorry Dazed and ... I don’t understand. Can you elaborate.

Dazed_and_confused

It sounds like that for some reason you have chosen to give up the security of a defined benefit scheme. Which essentially has zero visible cost to yourself. You would get what you had accrued.

You now have a fairly large pot of money which you want a pension company to hold for you. You will presumably then invest that money in a variety of funds to try and achieve your 3-4%.

Which company have you found that will do that without charging you a fee?

You said,

I don’t want to pay out any more fees!

And I really don't thinks that's feasible.

jim8888

Hi Brooklands4
You'll get a lot of great advice here, but it is intimidating when you start to try and take control of your money. You can get a lot of technical responses to a simple question. I struggled with a lot of the same thoughts as yourself - was I competent to manage my cash? Surely you're paying an IFA for his/her expertise? Surely they must be worth the money they charge?
Well, maybe. I'm sure some of them are, but how do you find them? The financial industry makes you grind your teeth over the fees they charge. My self-managed pension in Standard Life, where everything was sitting in a Vanguard Life Strategy fund (a very simple, low fee tracking fund) was costing me five grand a year in charges which was about 1%. For what?! But an IFA might have charged me the same again to put it in exactly the same place, so at least I felt I had some control (and subsequently moved it to reduce those fees.)
If I was in your position, I'd open a SIPP and transfer my money into a Vanguard Life Strategy fund. You can choose how risky you'd like this to be. It's dead simple to do. It won't be free but it will be cheaper than getting an IFA to advise you to it and, as pointed out, nothing is free when it comes to managing your money.

Brooklands4

Dazed_and_confused wrote: »

It sounds like that for some reason you have chosen to give up the security of a defined benefit scheme. Which essentially has zero visible cost to yourself. You would get what you had accrued.

You now have a fairly large pot of money which you want a pension company to hold for you. You will presumably then invest that money in a variety of funds to try and achieve your 3-4%.

Which company have you found that will do that without charging you a fee?

You said,



And I really don't thinks that's feasible.

I’m not sure if you’re trying to be helpful, or sarcastic.
My final salary pension scheme was in a £1billion deficit, and has now gone into special measures devaluing each pension by roughly 10%. I left on the advice of an IFA. I researched and asked other colleagues what advice they had received before leaving.
I haven’t found a company that will do it for nothing, but I assume your comment was sarcastic?
If you don’t have anything constructive to say, can I politely ask you not to comment again please? I didn’t come on here to be spoken to like an idiot. I just wanted to learn from others in a similar position. Other respondents have been very polite towards me.

jaybeetoo

I recommend you start here https://www.moneysavingexpert.com/savings/cheap-sipps/

tacpot12

So I'm paying about 0.1% pa in platform charges and an weighted average of 0.62% pa in fund charges for a self-managed retirement portfolio that is currently worth £330K (It was worth £360K a year ago). The platform charge figure includes up to five trades per year. The portfolio is made up of 14 Investment Trusts, 3 Unit Trust Funds and two EFTs.

The portfolio has provided a natural yield of 3.6% in the last 12 months after charges, so on a starting value of £300,000 the yield would be £10,800. The Investment Trusts provide a degree of income smoothing and a degree of inflation protection as they have a history of increasing dividends over time. This makes the portfolio very simple to administer. The only decisions are whether I need to sell anything because the natural yeild isn't sufficeint for my needs, and if so, whether to sell some of the Unit Trust or Investment Trust holdings. The Unit Trusts are all Multi-asset funds with a high degree of Bond holdings, so if I don't think it's a good time to sell any of the Investment Trusts, I will sell these. (I don't think I'll ever sell the EFTs unless I end up living to a hundred).

Hope this helps.

barnstar2077

Sorry for some of the less helpful comments you have received, I have noticed a trend on these forums where questioning the necessity of FAs seems to bring some backlash.

If you decide to go down the SIPP route then you may find this link useful:

https://www.moneyobserver.com/best-sipp-platforms-your-portfolio-2018#_

I ended up going with Hargreaves Lansdown in the end, not the cheapest, but they have access to all the funds that I want, have a really clean easy to use user interface and were recommended to me by a friend. They also don't charge for drawdown which is a cost not often thought about early on.

The 0.45 cost a year for the platform can be offset some what by using tracker funds. Although you will probably find the costs similar to what you have already been quoted. So if learning about funds and SIPPS is not interesting to you, or having control over your own money is not appealing in its self then a stakeholder pension may be your best bet.

I have built mine using these two funds as the backbone as my main pension is UK skewed already:
LEGAL & GENERAL INTERNATIONAL INDEX TRUST CLASS C - ACCUMULATION (GBP)
LEGAL & GENERAL EUROPEAN INDEX CLASS C - ACCUMULATION (GBP)

I am still learning all the time now, and If you are going to go down the SIPP route you will need to do your homework too. Googling things like the difference between accumulation and income funds etc. But it sounds to me like you are ready to take charge of your own money, there are plenty of books to help you and I have learnt so much just by reading these forums.

I use the philosophy from Investing Demystified by Lars Kroijer, which is basically not trying to beat the market, but by being the market, using trackers across diverse regions and different sectors to (hopefully) ride the long term wave of inevitable growth. Edit: To clarify, this philosophy may not be successful in the short term and is not meant to be used if you only have a few years till retirement.

Hope some of this helps,
Zack

Brooklands4

tacpot12 wrote: »

So I'm paying about 0.1% pa in platform charges and an weighted average of 0.62% pa in fund charges for a self-managed retirement portfolio that is currently worth £330K (It was worth £360K a year ago). The platform charge figure includes up to five trades per year. The portfolio is made up of 14 Investment Trusts, 3 Unit Trust Funds and two EFTs.

The portfolio has provided a natural yield of 3.6% in the last 12 months after charges, so on a starting value of £300,000 the yield would be £10,800. The Investment Trusts provide a degree of income smoothing and a degree of inflation protection as they have a history of increasing dividends over time. This makes the portfolio very simple to administer. The only decisions are whether I need to sell anything because the natural yeild isn't sufficeint for my needs, and if so, whether to sell some of the Unit Trust or Investment Trust holdings. The Unit Trusts are all Multi-asset funds with a high degree of Bond holdings, so if I don't think it's a good time to sell any of the Investment Trusts, I will sell these. (I don't think I'll ever sell the EFTs unless I end up living to a hundred).

Hope this helps.

Thank you very much indeed. Very interesting and useful. I’m very grateful to you.