[deleted]

xpc

[deleted.]

AnotherJoe

xpc wrote: »

I have finally taken the decision to move my ISA out of the IFAs remit and manage it myself. Recently the IFA recommended that I use a platform managed portfolio for my ISA, this consists of 27 funds which I think is too many for a total value ~£60k


Too many? Its insane !
My pension is on the same platform and for now will continue to be managed by the IFA, it is currently invested in 11 funds and is somewhere around 5 times the value of the ISA. This also makes me think that 27 funds is too many. It looks to a cynical person that the IFA has decided the ISA is not worth his time and therefore he will leave it to the platform to manage while still taking his cut.

I'd be looking at moving the pension also. What are the funds? How much are you paying?
I take an active interest in my ISA and pension so am aware of the funds used in the past and currently - I read the KIDs but don't always do any additional research.
I am mid 30s and have no plans for the ISA funds so have a blase attitude to risk, I would not be inclined to bail out if the value dropped by, for example, 40%. Yes, it is a large amount of money, but I am looking for growth. I have also withdrawn some funds over the past 12 months for planned expenditure, the amount withdrawn was mostly from growth so a drop of up to 50% would not make me feel as though I have lost value (I know that is not the case).

Although I am happy to take risk, I am not completely stupid and will not be looking at any non-mainstream investments.
The funds I am currently considering are:
Fundsmith or Lindsell Train Global - I am planning to put the vast majority here, maybe 70%. Probably Fundsmith as I have done very well out of this in the past (I know, past performance and all that).
Vanguard FTSE Global All Cap or HSBC FTSE All-World Index - probably around 25%. This is just to have a global tracker, probably the HSBC fund as it has lower costs.
I woudl do those the other way round. 70% passive, 25% Fundsmith or whoever.
Just bought the HSBC for my grandaughter. I have the Vanguard myself plus Fundsmith and the new Smith fund. I'd still, whilst being 100% equities, stick with passives for the core and spice it up with extras.

HSBC Global Property - remaining 5%. I want a little exposure to property but not too much as I have a buy to let.
Seems like a plan I have similar

Does this seem too weighted towards the main fund?
Would a larger (or smaller) selection of funds be recommended?


I am planning to use iweb as it will be a transfer in and purchase of the selected funds. This will then not be touched. If I have spare funds to contribute I will only be putting in a lump sum so do not plan to trade often, so I think the cost could be £40 to set up and buy the initial holdings, then £15 per year if contributing (assuming just 3 holdings).
Currently the IFA charges are around £300 (0.5%) and the platform fee is slightly below this, but only as I hold my pension on the platform.


Does iweb seem the best platform choice? From what I can see it seems to have the funds I am looking at (though not Lindsell Train Global Equity) and seems to be the lowest cost.


As mentioned, I have a fairly substantial pension pot and feel I am track with that, I also hold some cash savings hence the ability to take some risk with the ISA.


Any comments are welcome.

My comments above in blue

DrSyn

1. As has been already stated

(a) 27 Funds, is way too many funds.

(b) 75% passive and 25% active is a much better approach than your way round.

The managers of the funds mentioned have done well, but they might lose their touch, fall ill or drop down dead.


2. You could always consider the much simpler and cheaper way of just placing the money in a low cost passive multi-asset fund.



3. I think you should bookmark the two below, for the times you get carried away in your selection of funds. They are a reality check!

http://www.kroijer.com/

https://www.ifa.com/indexfundsthemovie/

AnotherJoe

xpc wrote: »

I was planning to leave the pension for now to see how I felt about managing the ISA first, but I suppose it doesn't make sense to wait if putting the majority into a tracker.
There is around £300k in the pension with platform fees around 0.32% plus 0.5% IFA fees, so approx. £2,500 per year at the current value split as £1,000 platform and £1,500 IFA.

Fees on iweb would be £180 per annum for the platform, plus £5 per trade. I could contribute lump sums rather than monthly to keep the trading costs down, but even with 3 trades per month (if using the same funds as the ISA) the annual cost to trade would only be £180. That would give me a total cost of £360, saving over £2,000 per year.

It is currently invested in:
Artemis US Select ~ 17%
Invesco European Equity (UK) ~ 15%
Dodge + Cox US Stock ~ 13%
Standard Life Investment Grade Corporate Bond ~ 11%
T. Rowe Price Japanese Equity ~ 10%
Fidelity Emerging Markets ~ 10%
Unicorn UK Income ~ 6%
Marlborough UK Micro-Cap Growth ~ 5%
HSBC Global Property ~ 5%
Standard Life UK Equity Income Unconstrained ~ 5%
Standard Life Short Duration Credit ~ 3%

Without digging into them looks like a lot of funds that will have high management costs. If you are focusing on minimising costs via platform charges, you need to look at investment costs as well.


I was thinking the same, and it was the final push to go DIY. I could be wrong but it comes across as lazy of the IFA to recommend the platform portfolio, although if it is the best choice then why not also advise that the pension is invested in the same way.
Indeed.

Do you have any thoughts about the choice of platform?

Sorry no, because i use HL, mostly ITs, shares and ETFs , not many funds, quite low prices with that mix, and I've just moved away (well, in the tedious process of moving away) from ii for some shares to HL who wont charge me at all.


Also, and in a neat bit of doublethink, I get on well with HL and so have rationalized that I'd rather pay them a bit more for an easy life and leave my descendants less money than have aggravation with a cheap supplier, maybe keep jumping suppliers, just to leave them a bit more

msnau

DrSyn wrote: »

1. As has been already stated

(a) 27 Funds, is way too many funds.

(b) 75% passive and 25% active is a much better approach than your way round.

The managers of the funds mentioned have done well, but they might lose their touch, fall ill or drop down dead.


2. You could always consider the much simpler and cheaper way of just placing the money in a low cost passive multi-asset fund.



3. I think you should bookmark the two below, for the times you get carried away in your selection of funds. They are a reality check!

...kroijer...

Thank you. Thats exactly the kind of advice I was after!

Albermarle

Do you have any thoughts about the choice of platform?

Maybe you could see how you get on with iweb with the ISA, before transferring over the pension as well .
Then you could have a good look around the various comparison sites to see if there are other alternatives that suit you. With a £300K pot both Interactive investor ( low flat fee but + some charges ) and Fidelity ( 0.2% for funds : max £45 for ETF's IT etc and no extra charges) are competitive , if not quite as cheap as Iweb.

If you intend to use drawdown at some point then some provides have extra charges and some not.