Am I being Stupd?

DF_Racer

I have a diverse portfolio of ISAs, pensions, Stocks and Share ISAs, cash and one small BTL. None of which are worth over £200k and collectively are approx £850k


I was made unemployed recently, aged 57, and am now counting my pennies.


I have an IFA who appears to do not a lot for his fee. ( 0.5%).
WE have an annual review but for the next 51 weeks I think anything could happen and I would not get so much as an email. My portfolio is globally balanced, risk balanced.



Through the IFA I have £150k in SS Isa and a personal pension with Aegon, approx £200k.
At 0.5% I am paying £1750 pa to him alone , as well as the platform fees and OMC ( Fidelity FundsNetwork ). and whatever Aegon charge.


I realise that I cannot avoid fees altogether.
Should I be looking at moving to a cheaper alternative? ie an iWEB SIPP.




Many thanks.

Albermarle

Two questions at once here:

Should you pay an IFA or DIY. An endless debate on this forum and only you can decide. Even if you have an IFA it is still good to become well informed about things financial and reading this forum is one way to improve your knowledge and help your decision making process.

Regarding reducing funds/platform fees , you have a lot of choices but it could be your current choices are still OK. You can not compare until you have the all the info, like much Aegon are charging for example. If it was an ex employer pension it might already have a competitive rate and it will offer a more full service than Iweb .

dunstonh

Should I be looking at moving to a cheaper alternative? ie an iWEB SIPP.

Choice is to use an IFA or DIY. If you DIY well you can save money. If you DIY badly it will cost you more.

Remember cost is just one part of it. it is not the primary concern. It is a secondary concern. Important yes. But should not be your driving concern.

Jumping to deciding which platform you should use if you DIY is the last bit of the decision chain. Not the first. How do you want to invest should be first.

inflationbuster

DF_Racer wrote: »

At 0.5% I am paying £1750 pa to him alone

Never used an IFA but that's an eye watering sum.

cogito

Albermarle wrote: »

Two questions at once here:

Should you pay an IFA or DIY. An endless debate on this forum and only you can decide. Even if you have an IFA it is still good to become well informed about things financial and reading this forum is one way to improve your knowledge and help your decision making process .

That depends on whether or not you are able to distinguish between those who know what they are talking about and those who don’t.

adatherton

Depends on whether the IFA has put you into the right stuff. Is your performance better than, say, the FTSE index (which you could have bought yourself at HL).

If your return is more than £1750 (0.20% of £850k) above that ...... and how valuable is your own time to learn the stock market from scratch.

Reed_Richards

DF_Racer wrote: »

I was made unemployed recently ...I have an IFA who appears to do not a lot for his fee. ( 0.5%).

One good reason for having an IFA is because you don't have the time to do your own research. Perhaps you do now?

bowlhead99

adatherton wrote: »

Depends on whether the IFA has put you into the right stuff. Is your performance better than, say, the FTSE index (which you could have bought yourself at HL).

That seems to be a bit of a nonsense comparison as the FTSE index is not really an appropriate benchmark for a balanced portfolio (especially if from that you mean the UK FTSE100 index rather than one of the global FTSE index).

FTSE do not do a 'global equities, bonds and property index', whereas the IFA is likely to have invested you in those sort of assets (with the mix varying according to your objectives, knowledge level, risk tolerance, risk capacity etc).

And the IFA is unlikely to have invested through 'HL' as HL charge 0.45% platform fees on sums of £150k, which is £675; a typical IFA platform is less than two thirds of that.

If your return is more than £1750 (0.20% of £850k) above that ...... and how valuable is your own time to learn the stock market from scratch.

Effectively you have a choice to take independent professional advice or not, just like you decide whether to use a third party for your car servicing, fishing or dentistry.. 0.5% or 0.2% of anything is pretty much nothing compared to how much you could lose in a bad year by making inappropriate investment choices such as being exposed 100% to global equities when they crash 50-60% ; some DIY investors will have made that choice simply by using "whatever funds are top of the league tables for the last couple of years" as their criteria.

However, 0.5% plus the platform fee of the platform used by the IFA for the ISA is an unnecessary fee if you already know what you want and are happy to just move the ISA to IWeb and buy and hold assets there yourself.

The fee levied by Aegon for the pension may or may not be more expensive than IWeb's £180 per year plus the OCFs of the funds you would buy on the IWeb platform. But clearly the IFA fee of 0.5% on this is optional because you do not need an IFA to own a pension. You may or may not appreciate the advice on how to invest it, if you already have the time, knowledge and inclination to self-invest it yourself.

mark55man

plus it depends on your psychology - if you are an inveterate tinkerer and flddler and moving things in and out depending on what you just read going DIY could be very expensive. churn is not your friend

however, as posters above had said, if you are happy with an investment strategy and happy you could execute it for less then why not DIY

Thrugelmir

inflationbuster wrote: »

Never used an IFA but that's an eye watering sum.

How much a year do you spend on research? On invest in your terms of your own valuable personal time.

elephantrosie

never used an IFA and always wonder how it works.

do IFA just advise you what to invest in?