Discretionary trust

steinson

I am setting up a trust one of my daughter's whose disabled is discretionary I'm setting it up through my bank and the solicitor who drew up the trust thought a independent financial advisor was a good idea for me to see but in thinking of seeing what invesments the bank can provide as I'm dubious about getting advice and it not being best for my daughter and then when I'm not able to help her she's left with it all to sort out herself the money is for her in later life( she's approx. 45), can anyone suggest anything I don't know whether to get independent financial advise from a indepent financial advisor or to just go with the bank, I'm not bothered about making money hopefully just enough so it won't loose value in 20 years. I'd be grateful of any advice

dunstonh

but in thinking of seeing what invesments the bank can provide as I'm dubious about getting advice

Banks have the worst reputation, expensive products and generally low-quality investments. Yet you prefer to see them rather than an IFA? IFAs are whole of market and have the lowest complaints of all the advised distribution channels. Its a no brainer which you should see.

and it not being best for my daughter

Seeing a bank wouldnt be. An IFA would be considered best. That is why solicitors recommend IFAs and not bank sales reps.

xylophone

https://www.mencap.org.uk/sites/default/files/2016-06/Mencap%20Trust%20Company%20Ltd%20Brochure.pdf

Who are the named trustees? The trust will need administration after you are gone.

See https://www.gov.uk/trusts-taxes/trusts-for-vulnerable-people

https://adviserbook.co.uk/ you would tick "confirmed independent" and any other specialism required.

cfw1994

dunstonh wrote: »

Banks have the worst reputation, expensive products and generally low-quality investments. Yet you prefer to see them rather than an IFA? IFAs are whole of market and have the lowest complaints of all the advised distribution channels. Its a no brainer which you should see.

Seeing a bank wouldn't be. An IFA would be considered best. That is why solicitors recommend IFAs and not bank sales reps.

I broadly agree with your sentiment here, and I suspect if everyone could find their own dunstonh, the world would be a better place!

& for sure, banks are apparently 72x worse than IFAs (page 102 here!)...but there remains still some distrust of many IFAs amongst the general public, both with risk of wrong advice and also high costs. The former, I would expect, should be very low these days the way the industry has evolved, but the latter is still a concern!

Actually a good retired friend of mine (who is fiscally very solvent!) did tell me a while back he got some very good clear advice from his bank (Lloyds) which (his words!) had fees that were considerably lower than IFAs he had also spoken with.
Obviously they are for 'tied' products, and probably won't be the very best in class....but they may be!

I guess all I am saying is not to rule out your bank for some free first advice. Perhaps as a precursor to finding a decent IFA - give you some background info on what to ask ;-)

dunstonh

& for sure, banks are apparently 72x worse than IFAs (page 102 here!)...but there remains still some distrust of many IFAs amongst the general public, both with risk of wrong advice and also high costs. The former, I would expect, should be very low these days the way the industry has evolved, but the latter is still a concern!

A lot of this is because the average consumer doesnt understand the difference. Research has found that over half of people seeing FAs and sales reps though they were seeing an IFA. So, the issues that came about through sales reps/agents etc were lumped in with IFAs.
Sure, there are the odd bad apple but the complaint rates on IFAs is tiny. The FOS has around 1500 complaints against IFAs. A tiny number when you consider the millions of transactions they carry out each year. How many times have we seen on this site, someone mention something about an IFA and it turns out it was SJP or a bank rep they were actually talking about...

When you look at current issues, it seems to be factory line focused companies that are doing damage. Not the traditional localised IFA firm. And so called Wealth Management firms, who are not actually doing anything wrong but charge an absolute fortune.

Actually a good retired friend of mine (who is fiscally very solvent!) did tell me a while back he got some very good clear advice from his bank (Lloyds) which (his words!) had fees that were considerably lower than IFAs he had also spoken with.
Obviously they are for 'tied' products, and probably won't be the very best in class....but they may be!

Personally, I do not believe that. Not what you are saying of course but the fact that Lloyds bank was better. Lloyds bank SW products are more expensive than what an IFA can get and SW has an awful reputation for investment funds. Lloyds have starved SW of funding and their range of products has dated like a black & white TV in 2019. Indeed, Lloyds are reintroducing a limited robo-advice service back into the branches after they pulled out of giving advice following the RDR and have chosen Blackrock to do this rather than use Scottish Widows.

Lloyds pulled out of advice with RDR. So, this must be pre-RDR. So, we are talking commission. Many IFAs moved to fee basis before RDR. So, he could well have been comparing fee based options vs commission options. You would not believe the number of times people think a commission was cheaper just because they couldn't see it. So, maybe he just saw greedy IFAs with high costs or maybe an SJP rep or similar. Ask any IFA that has been around a while and they would have come across people who thought the bank was cheaper as they were not charging them. Or maybe both were commission. Bankassurers didnt have the same disclosure requirements that IFAs had and the commission disclosure was usually a lot lower even though the charges were higher.

steinson

My trustee is my mother we asked a solicitor we contacted through mencap to set up the trust were in the process of getting a trust account through our bank , then the solicitor suggested going to if a but were unsure on this as scared of getting bad advise and loosing money also im not sure what I should be asking for I don't want my investment to be worth less i would like it to grow a little so what can ::) now is the same roughly as what it'll buy in 15 years time I don't know what that's called

Reaper

steinson wrote: »

My trustee is my mother we asked a solicitor we contacted through mencap to set up the trust were in the process of getting a trust account through our bank , then the solicitor suggested going to if a but were unsure on this as scared of getting bad advise and loosing money also im not sure what I should be asking for I don't want my investment to be worth less i would like it to grow a little so what can ::) now is the same roughly as what it'll buy in 15 years time I don't know what that's called

An IFA will establish your "risk profile". In other words how far you want to go in the trade off between growth and risk.

At one extreme you could put the whole lot in a savings account, but that pretty much guarantees it will fail to keep up with inflation and be worth less in 15 years time than it is now.
Mixed investments including global diversification should enable you to at least keep up with inflation with a low level of risk. The adviser will explain all this to you. In the end you can accept or reject the advice.

steinson

dunstonh wrote: »

A lot of this is because the average consumer doesnt understand the difference. Research has found that over half of people seeing FAs and sales reps though they were seeing an IFA. So, the issues that came about through sales reps/agents etc were lumped in with IFAs.
Sure, there are the odd bad apple but the complaint rates on IFAs is tiny. The FOS has around 1500 complaints against IFAs. A tiny number when you consider the millions of transactions they carry out each year. How many times have we seen on this site, someone mention something about an IFA and it turns out it was SJP or a bank rep they were actually talking about...

When you look at current issues, it seems to be factory line focused companies that are doing damage. Not the traditional localised IFA firm. And so called Wealth Management firms, who are not actually doing anything wrong but charge an absolute fortune.



Personally, I do not believe that. Not what you are saying of course but the fact that Lloyds bank was better. Lloyds bank SW products are more expensive than what an IFA can get and SW has an awful reputation for investment funds. Lloyds have starved SW of funding and their range of products has dated like a black & white TV in 2019. Indeed, Lloyds are reintroducing a limited robo-advice service back into the branches after they pulled out of giving advice following the RDR and have chosen Blackrock to do this rather than use Scottish Widows.

Lloyds pulled out of advice with RDR. So, this must be pre-RDR. So, we are talking commission. Many IFAs moved to fee basis before RDR. So, he could well have been comparing fee based options vs commission options. You would not believe the number of times people think a commission was cheaper just because they couldn't see it. So, maybe he just saw greedy IFAs with high costs or maybe an SJP rep or similar. Ask any IFA that has been around a while and they would have come across people who thought the bank was cheaper as they were not charging them. Or maybe both were commission. Bankassurers didnt have the same disclosure requirements that IFAs had and the commission disclosure was usually a lot lower even though the charges were higher.

I've seen a wealth management firm advertised I thought they did the same as independent financial advisors have I been mistaken ?

steinson

If I want something that won't loose value but will grow so the same value of what I can buy is the same as in approximately 15 years time am I looking of an interest rate that's the same as inflation at the moment I know there's no way of predicting rates in the future.

dunstonh

I've seen a wealth management firm advertised I thought they did the same as independent financial advisors have I been mistaken ?

Wealth managers can be IFAs or FAs. It isn't an official title. However, it tends ot be used by FAs or IFAs that are transitioning to FA status.

Wealth managers tend to use DFMs (adds a layer of charges - often but not always a significant layer) and normally only one platform. i.e. they stick every single person they see on the same platform and DFM.

General rule of thumb. IFA or DIY. Not FA.

If I want something that won't loose value but will grow so the same value of what I can buy is the same as in approximately 15 years time am I looking of an interest rate that's the same as inflation at the moment I know there's no way of predicting rates in the future.

Historically, interest rates barely keep up with inflation. You have periods where they are just under or just over but you do not grow your money. If you are lucky you may just maintain value in real terms. God forbid you will ever need that money for spending needs (income or capital).

steinson

What's a DIY