IFA cost for managing pension

gadgetmind

You can definitely save money by 1) negotiating hard (do your research!), 2) going DIY (do even more research!).

How much work are you prepared to put in both in terms of reading now and ongoing work?

I've read dozens on books on asset allocation, and how to manage drawdown risk, so feel comfortable to DIY, and it only takes me a few hours a year to rebalance things, so no way could stomach paying someone hundreds of pounds for this simple job, never mind thousands!

But someone who decides to go it alone but doesn't put in the work is likely to chase good returns, buy high and sell low, panic at the wrong times, have an asset allocation that would scare even me, and generally screw it up.

jaybeetoo

I’m not a fan of charging a percentage of the fund value once the fund gets over a certain size. The amount of work to manage a £800k fund is the same as to manage a £1m fund.

bostonerimus

gadgetmind wrote: »

You can definitely save money by 1) negotiating hard (do your research!), 2) going DIY (do even more research!).

How much work are you prepared to put in both in terms of reading now and ongoing work?

The amount of work required to set up and manage a portfolio is exaggerated. It doesn't need to be complicated; all it needs is common sense, some basic knowledge, and an ability to filter out all the extraneous information that comes your way. I haven't researched any funds in my portfolio for more than 20 years. The only research I do is on funds that other people own so that I understand what they are doing.

dunstonh

The amount of work required to set up and manage a portfolio is exaggerated. It doesn't need to be complicated; all it needs is common sense, some basic knowledge, and an ability to filter out all the extraneous information that comes your way.

Said by someone that hasnt got to comply with MiFIDII requirements.

I haven't researched any funds in my portfolio for more than 20 years.

and the FOS says to the adviser, let's see your due diligence and research and the adviser replies "I haven't researched any funds for 20 years"......

bostonerimus

dunstonh wrote: »

Said by someone that hasnt got to comply with MiFIDII requirements.

Exactly, the DIYer is just responsible to themselves. They obviously need to be sensible and stick with well regulated and respectable funds, but that's just common sense

and the FOS says to the adviser, let's see your due diligence and research and the adviser replies "I haven't researched any funds for 20 years"......

Yes, no need for that overhead either if you have a simple and well constructed portfolio. I have rebalanced and tweaked my asset allocation, but haven't seen a need to change any funds.

MarcoRolo

Thanks, Not sure I can put the time in to do all of this or want to take the risk that I’ll screw things up. I’m happy to pay someone to do it, just don’t want to be ripped off on the amount of the fee.

Alexland

Boston I am surprised you haven't seen advantage in changing even passive funds in the past 20 years. In the UK most of the lowest cost well diversified funds are less than 10 years old.

Alex

dunstonh

MarcoRolo wrote: »

Thanks, Not sure I can put the time in to do all of this or want to take the risk that I’ll screw things up. I’m happy to pay someone to do it, just don’t want to be ripped off on the amount of the fee.

Go back to the adviser and negotiate the fee down. 0.5% or less. If not, there will be plenty of advisers willing to take over your portfolio.

gadgetmind

I'm currently DIY with close to £2m of funds and GOK what an IFA would charge to manage this. My fees (fund, platform, and rebalancing) are 0.28% pa, and I'm working the reduce this but do have to trade every year to sell down unwrapped and trickle money into ISAs.

I also seem to keep having to provide "bridging loans" on properties for offspring, inlaws and parents, so far more trading than I'm happy with, but it should settle down next FY.

bostonerimus

Alexland wrote: »

Boston I am surprised you haven't seen advantage in changing even passive funds in the past 20 years. In the UK most of the lowest cost well diversified funds are less than 10 years old.

Alex

Low cost indexing has been around for a while in the US and I consolidated a lot of money with Vanguard in the late 90s in a 4 fund portfolio of Total US Equity Index, Total International Equity Index, Total Bond Index and Wellesley. The Index funds are all over 20 years old. My dirty little secret is that I have a fair amount of money in an active balanced fund called Vanguard Wellesley that I initially used mostly as part of my bond allocation and that started back in the 1970, but I just let it tick over now and don't make any contributions.