Large inheritance DIY vs professional

DrSyn

Wildsound wrote: »

I do wonder sometimes whether these SJP posts that have shot up in number recently are a big marketing drive.

The same thought had crossed my mind. If so the bad press they get on this forum may be working against them.

SonOf

Since %-based fees (especially for ongoing management) will almost certainly never pay for themselves in terms of the quality of the advice, I rather think that any individual or firm that even offers a % fee is fundamentally unethical and shouldn't be trusted.

Then you have pretty much ruled out every advice firm in the country.

% fees exist for a number of reasons. 1) consumers prefer them as its easier as all options generally go by percentage (platform/provider, funds and then adviser - you just tot them up to give the total) 2) Most platforms/providers only support percentage based funds. 3) historic reasons. That is they way its always been. 4) a number of adviser costs and risks go up by the amount invested. So, percentage ties in with covering those.

Many adviser firms have a cap and collar to their charges and will taper the percentage in tiers.

Can you really take advice from someone who (should) knows full well that taking their advice will result in their clients under-performing a simple DIY approach, or a fixed fee advice approach?

That is far too simplistic and also inaccurate. How do you explain the portfolios that go up by more? However, that too is simplistic as the overriding requirement on advised portfolios is suitability. Not investment returns. A number of the IFA research providers, for example, said to not invest in Woodford Income back in 2017. Yet the DIY marketing lists still included it right up to failure.

johnadams7

I was seeing who reads my posts exactly to see that company added In.

johnadams7

It wasn’t my comment ruling out % based IFA’s.

I can assure you I have nothing to do with St James Place. I was not impressed by their rep, and would request a different one should I invest. The 5% is non negotiable. I mean why should I give 25-50k ish just for them to set up an investment. You guys say it’s mediocre.

The way I’ve been operating is have a multi asset fund as the large majority of the portfolio. Then add in ‘extras’ such UK and global equities. I get this adds risk but it also adds profit and to date has.

So do people think investing 50% in vanguard and 50% in HSBC dynamic a sensible way of proceeding ?

Alternatively, and this appears to be my favoured option ask IFA’s to advise on their portfolio which suits my needs. Look at cost etc,

I’ve scrapped the st James place idea. Their funds score badly on FE, getting 2-3 stars.

Where the money is now the fees are slightly less plus I trust them etc, they make their fee schedule clear but I think it’s too much,

Which leaves me buying 2 multi asset funds,

OR

Finding a IFA. Any recommendations for London / Surrey etc ? Or where I can review them ?

johnadams7

DrSyn wrote: »

The same thought had crossed my mind. If so the bad press they get on this forum may be working against them.

Nope can I please clarify I have nothing to do with them, researching them I will have nothing to do with them, and it was only a naive option,

The advisor was more or a salesman and put pressure on me to invest. I mean I asked for the brochures and fee schedule. He did nothing for weeks then sent it so it would arrive before our second meeting, when I told him I wasn’t prepared to sign he cancelled showing his intentions. So if anything can this please show how the firm put pressure on vulnerable customers (I’m disabled).

johnadams7

So it would arrive the day before in the afternoon and he was coming in the morning. How would I have time to read and digest. He didn’t tell me about the 5% I only saw it from my research.

Albermarle

Finding a IFA. Any recommendations for London / Surrey etc ? Or where I can review them ?

You will find people will not specific recommendations on the forum . Have a look at these links :
https://www.which.co.uk/money/investing/financial-advice/how-to-find-a-financial-adviser-affjl6z26bl4
https://www.moneyadviceservice.org.uk/en/articles/choosing-a-financial-adviser
https://www.unbiased.co.uk/

Normally the first meeting is a get to know you session and no harm to book a few of these as you need to find someone who you feel at ease with ( and same for the IFA to a lesser extent)

sendu

SonOf wrote: »

% fees exist for a number of reasons. 1) consumers prefer them as its easier as all options generally go by percentage (platform/provider, funds and then adviser - you just tot them up to give the total) 2) Most platforms/providers only support percentage based funds. 3) historic reasons. That is they way its always been. 4) a number of adviser costs and risks go up by the amount invested. So, percentage ties in with covering those.

I don't think points 1-3 are at all a valid reason to be overcharged and ripped off. Point 4 is interesting; what costs and risk go up by the amount invested, and why?

However, that too is simplistic as the overriding requirement on advised portfolios is suitability. Not investment returns.

Why does determining suitability cost £thousands more for client A just because he has twice as much money to invest as client B?

Knowledge that particular funds shouldn't be recommended (or should be) is obtained at some particular cost each year. Passing that knowledge on to clients only costs IFAs time, so clients should be charged at a fixed hourly rate, not a % of investment.

OldMusicGuy

johnadams7 wrote: »

So do people think investing 50% in vanguard and 50% in HSBC dynamic a sensible way of proceeding ?

Some do, some don't. If you can't answer that question yourself, then you need an IFA (and I'm glad you decided not to use SJP).

FYI I do. I have a large DC pot invested in three multi-asset funds. It works very well for me. However, my situation and financial objectives are likely very different to yours so there's no way I can say if it's a good idea for you based on my situation.

I would never use a %fee based organisation of any type, because my DC pot is large and they would get a lot of money every year for very little effort IMO. My son contributes to a pension at work that is managed by a small "wealth management" firm that offers a choice of 5 fund portfolios of different risk levels. I looked at all of them and didn't like the look of any of them. However, he has to use them to get his employer's 10% contribution. Over two years, after fees the fund is worth less than the actual contributions. Pathetic.

MaxiRobriguez

johnadams7 wrote: »

The advisor was more or a salesman and put pressure on me to invest..

Funds make money by taking a % from the overall value of the fund. The more the fund is worth, the more money they make. They fund value can either be increased by growth of the underlying investments, or by getting more people to invest into the fund.

It's much easier for funds to take on a passive style and use the money saved on avoiding hiring more researchers to be spent on marketing instead.

'Assets Under Management' - funds care about that more than anything, and it has absolutely no relevance to YOUR requirements or needs as an investor at all.