ISA Lost £3K in 6 Months - Stick or Switch ?

RocketRonnieRadox

justme111 wrote: »

So why would you want to enter the new fund on the platform that charges you 10% for buying the fund? Why not to move money elsewhere where there is no entry charge?
It does not make sense to me that relatively mainstream provider charges this amount to buy funds - I believe there is a chance that you misunderstood something. Can you get information in writing and post it here?
I find it difficult to understand the sentences you form - could it be another sign of your difficulties to see the things objectively - for example I can not fathom what do you mean by "the target allocation is forecast to perform done 20 k lower than current " even factoring in that "done" may be misspelt "down".
What is predicted to be 20 k lower than what ? Is not the value of your investment about 20 and something k in total?
It may be better to leave things as they are until you are clearer .

My appologies, the predictive spelling function has gotten the better of me.

Let me clarify what I meant.

I was refering to the stochastic model supplied by the HSBC advisor which tried to forecast the perfromance of the fund that I am in now Vs the fund that they were offering. The model showed that the fund I am in now is forecast to ourperform the fund HSBC were offering by some 20K over a 12 year period.

That was current fund Vs HSBC's moderate risk profile fund. If I was to take their higher risk fund - the named HSBC world select dynamic fund - then the model shows that the HSBC fund should outperform my current fund by 23K but she could not let me have the dynamic fund as my risk profile was moderate not high risk.

I hope that is more clear now.

As for the charges -

Their initial advice fee is 2.75% of the investment which is where the £2300 charge came from

dunstonh

I was refering to the stochastic model supplied by the HSBC advisor which tried to forecast the perfromance of the fund that I am in now Vs the fund that they were offering. The model showed that the fund I am in now is forecast to ourperform the fund HSBC were offering by some 20K over a 12 year period.

Stochastic modelling has advantages and flaws. You use it for long term planning but you never ever use it for predicting specific fund performance in the future. It does not surprise me to see a sales rep use it that way though.

That was current fund Vs HSBC's moderate risk profile fund. If I was to take their higher risk fund - the named HSBC world select dynamic fund - then the model shows that the HSBC fund should outperform my current fund by 23K but she could not let me have the dynamic fund as my risk profile was moderate not high risk.

And did the HSBC sales rep mention the HSBC Global Strategy Dynamic fund that is available to IFAs or DIY investors?
Similar in risk profile, nearly a quarter cheaper and a consistently better performer.

Their initial advice fee is 2.75% of the investment which is where the £2300 charge came from

What an embarrassing charge for a tied sales rep that can't even use the best products available from their employer. For reference, the average IFA initial charge is 1.8%.

You are a good example of why you see time and again on this site that you should either use an IFA or DIY. Never use an FA.

bostonerimus

Were the results of that stochastic modelling risk adjusted and did the rep explain the probability of under performing your current fund. Whenever someone breaks out "stochastic modelling" there's a high probability that they don't understand what they are saying or have any real grasp of random process or statistics.

Stop messing around with models and esoteric funds. Just start putting money into a multi-asset fund and either slowly sell some of your current funds or just let them ride for a few decades and see what happens. Also reduce your costs.

justme111

Sorry but 3% of 29 k is £870 - you said your fund was £29 k and that you would pay £2.5 k and that it was because you were to pay 2.75% initial investment charge- can not you see it does not add up ?

RocketRonnieRadox

justme111 wrote: »

Sorry but 3% of 29 k is £870 - you said your fund was £29 k and that you would pay £2.5 k and that it was because you were to pay 2.75% initial investment charge- can not you see it does not add up ?

We were also including my wife's ISA and a new investment amount - I've done the math and the 2.75% is correct.

the total to invest is about £86K.

davidquizer

In my opinion you do have too much in the UK. I changed my portfolio over a year ago so that I have just a small holding in UK funds. You're right to consider a global fund, but my choices would be Lindsell Global and Scottish Mortgsage Investment Trust, these are very highly thought of funds and have delivered fantastic results.

justme111

Are you sure you will be charged that money again just for changing the investments as it is already invested on the platform ? It would not make sense to charge you as it makes rebalancing impossible.
So the questions are - should you change the platform and should you change the funds. Have you actually been advised to get the funds you have ?
Your choice re changing and I guess matter of opinion.
There must have been reasons that caused you to choose what you had.
Not sure why you would put new money into where you are charged 2.75% entry charge but again - up to you.
Basically I guess it boils down to "do you know what to do to get anything better " question.

RocketRonnieRadox

justme111 wrote: »

Are you sure you will be charged that money again just for changing the investments as it is already invested on the platform ? It would not make sense to charge you as it makes rebalancing impossible.
So the questions are - should you change the platform and should you change the funds. Have you actually been advised to get the funds you have ?
Your choice re changing and I guess matter of opinion.
There must have been reasons that caused you to choose what you had.
Not sure why you would put new money into where you are charged 2.75% entry charge but again - up to you.
Basically I guess it boils down to "do you know what to do to get anything better " question.

The reason for the charge is because I would be switching platforms / funds and using a different advisor.

The fund I am in now was put toghether by an IFA some 12 years ago so I thought it might be advantageous to review. I relied on the experience of the IFA back when we began the existing fund.

Since posting this I have made contact with the original IFA with a view to seeing if he could optimise my investment without the additional cost of switching platforms.

I'll update the thread once we have reviewed things with the original IFA.

Thanks to Davidquizer too - I just checked the Lindsell Global fund and it does look like it has performed very well. I'll ask my advisor about it too.

Comparing HSBC World selection Balanced with Lindsell Global makes interesting reading -

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hsbc-world-selection-balanced-portfolio-c-accumulation/charts

Vs

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/lindsell-train-global-equity-class-d-income/charts

Lindsell seems to come out 3 times better based on historic.

Prism

RocketRonnieRadox wrote: »

Comparing HSBC World selection Balanced with Lindsell Global makes interesting reading -

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hsbc-world-selection-balanced-portfolio-c-accumulation/charts

Vs

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/l/lindsell-train-global-equity-class-d-income/charts

Lindsell seems to come out 3 times better based on historic.

To be expected. Lindsell Train GE is a top rated, high risk, moderately priced, 100% active equity fund and the hsbc world selction fund is a poorly rated, high priced, lower risk multi asset fund.

A reminder - you want HSBC global strategy not HSBC world selection.

RocketRonnieRadox

Prism wrote: »

To be expected. Lindsell Train GE is a top rated, high risk, moderately priced, 100% active equity fund and the hsbc world selction fund is a poorly rated, high priced, lower risk multi asset fund.

A reminder - you want HSBC global strategy not HSBC world selection.

Thanks Prism, would you suggest the HSBC Global Strategy over Lindsell Train ?

Thanks again