Question re 700K investment

sixpence.

Right you are. And they drop to 0.1% after 1m so it doesn't actually seem cost efficent to switch because fidelity stay at 0.2%

seacaitch

Regarding broker choice, have you decided upon your investment strategy yet, chosen the portfolio you'll use to implement the strategy, and have a fair idea of how you'll wish to operate your account (eg. in terms of how many and what transaction per year on average)? This isn't a facetious question!

After you've done that lot, your choice of broker(s) will become pretty straightforward, based on a combination of cost effectiveness, prudence and qualitative issues that you deem relevant.

Selecting a broker first, before you've done the things listed above, is entirely the wrong way around...

For investors who are just starting out, feeling a bit overwhelmed with all the information to absorb and decisions to make, I suspect that choosing a broker as a first step, not last step, may make them feel that at least something has been ticked off their list and a baby step made, but really it's just playing into the hands of slick marketers rather than it being an informed decision that's made only after you have most/all pertinent information to hand.

So my suggestion is to defer the broker decision until you've filled in most of the blanks in your "investment plan" and are close to being ready to rock and roll with it.

johnadams7

I have read through your thread. I think and understand that this amount is extremely important due to health reasons. Fortunately you have a property with no mortgage, and therefore I'd question if you really need the amount you say you do each year. I mean what standard of living will it provide you ? Do you have a complex illness requiring multiple private doctors prescribing expensive medication, or is the money going on tables in clubs and high end cars (no need to answer, just getting you thinking).

Ultimately you know what you need the money for, and during years where the markets are performing badly, how little money you can get away with having.

If you aren't able to work due to illness have you looked into new style ESA. I believe savings/income is not relevant. Also you'd need to check if it gives you a year towards your state pension. Please don't forget Personal Independence Payment. Just because you are well off, doesn't mean you don't deserve money from the Government.

With regards to platforms choose first what you will be investing in, and then decide which to use. It seems a bit odd doing it the other way. Personally i'd pay ever so slightly more for a platform that I think is financially sound and secure.

If I'm honest, the core of my fund would be a multi asset fund like vanguard lifestrategy or the HSBC equivalent. I might even invest in both. Then I would have smaller funds, perhaps only 5-10% of the value each to cover different classes. There is a website I saw that warns about duplication, but I have forgotten the name.

Whilst transferring 20k into an ISA is very little compared to your pot, it will reduce your tax liabilities. My understanding also is that if the platform folds the underlying investments are still yours. (I'm sure someone will correct me).

If you own 400k in Vanguard 80/20 that is yours even if fidelity folds.

I personally do think you need at least one off IFA advice, I found an IFA in London, they were charging around £500-800 to design a portfolio, offer all the advice you need, and then keep in touch in an adhoc situation. For them to manage actively it is at least 5x more expensive, but waiting just 6 months longer in the situation where the IFA feels performance is poor and moves peoples money may be more cost effective.

If you are planning on having smaller funds, and more specialist maybe an IFA managing makes sense - you can always have the mandate for a few years..

sixpence.

high end clubs lol No I just live in London mate. I will respond to the other stuff later - thanks for reading through the thread!

sixpence.

All of this makes sense for me. Except I don't think it's okay to take money from the government really unless you need it because some people out there are really struggling and spending only a tenner on the weekly shop. I am not sure what you mean about my pension though?

My post above re living in London is a bit tongue and cheek. In all seriousness, I've just started tracking my spending - I am going to track it for a month or two and see how much I am actually spending. I have already got good deals on my phone and broadband (it all adds up, doesn't it?).

I am going to interview 3/4 IFAs before deciding who to work with. I want a one off meeting with a fee and then to passively invest in funds. I am drawn to a VLS too but I dont fully understand how to drawdown from growth. I am sure I can figure it out though (it can't be rocket science) and the IFA can maybe help explain it.

johnadams7 wrote: »

I have read through your thread. I think and understand that this amount is extremely important due to health reasons. Fortunately you have a property with no mortgage, and therefore I'd question if you really need the amount you say you do each year. I mean what standard of living will it provide you ? Do you have a complex illness requiring multiple private doctors prescribing expensive medication, or is the money going on tables in clubs and high end cars (no need to answer, just getting you thinking).

Ultimately you know what you need the money for, and during years where the markets are performing badly, how little money you can get away with having.

If you aren't able to work due to illness have you looked into new style ESA. I believe savings/income is not relevant. Also you'd need to check if it gives you a year towards your state pension. Please don't forget Personal Independence Payment. Just because you are well off, doesn't mean you don't deserve money from the Government.

With regards to platforms choose first what you will be investing in, and then decide which to use. It seems a bit odd doing it the other way. Personally i'd pay ever so slightly more for a platform that I think is financially sound and secure.

If I'm honest, the core of my fund would be a multi asset fund like vanguard lifestrategy or the HSBC equivalent. I might even invest in both. Then I would have smaller funds, perhaps only 5-10% of the value each to cover different classes. There is a website I saw that warns about duplication, but I have forgotten the name.

Whilst transferring 20k into an ISA is very little compared to your pot, it will reduce your tax liabilities. My understanding also is that if the platform folds the underlying investments are still yours. (I'm sure someone will correct me).

If you own 400k in Vanguard 80/20 that is yours even if fidelity folds.

I personally do think you need at least one off IFA advice, I found an IFA in London, they were charging around £500-800 to design a portfolio, offer all the advice you need, and then keep in touch in an adhoc situation. For them to manage actively it is at least 5x more expensive, but waiting just 6 months longer in the situation where the IFA feels performance is poor and moves peoples money may be more cost effective.

If you are planning on having smaller funds, and more specialist maybe an IFA managing makes sense - you can always have the mandate for a few years..

Manesova83

I know this may not be a popular thing to say with many, but given the size of your windfall, I'd suggest investing a small percentage in Bitcoin - maybe even just 1%. This could prove to be a great hedge against more traditional investments, and if there's another crypto bull market, that 1% alone could bring in more money than the other 99%.

Of course, read up on it before you get involved, and then make up your own mind about whether the potential reward is worth the potential risk.

eskbanker

Manesova83 wrote: »

I know this may not be a popular thing to say with many, but given the size of your windfall, I'd suggest investing a small percentage in Bitcoin - maybe even just 1%. This could prove to be a great hedge against more traditional investments, and if there's another crypto bull market, that 1% alone could bring in more money than the other 99%.

Just to fulfil your prediction, there are of course other similar non-mainstream options too - perhaps pop down to the bookies and stick a wad on Lucky Boy in the 2:30 at Newmarket, or maybe place a pile of casino chips on 7 red....

Alexland

Again might not be popular but maybe 1% into researching rainbows, as if you can find a pot of gold....

itwasntme001

Manesova83 wrote: »

I know this may not be a popular thing to say with many, but given the size of your windfall, I'd suggest investing a small percentage in Bitcoin - maybe even just 1%. This could prove to be a great hedge against more traditional investments, and if there's another crypto bull market, that 1% alone could bring in more money than the other 99%.

Of course, read up on it before you get involved, and then make up your own mind about whether the potential reward is worth the potential risk.

What an absurd idea.

sixpence.

Yeah 7K is never going to stop being a lot of money to me tbh. The most I would invest in bitcoin is £100 because it's a total gamble, and that's how much I'm willing to lose!

Also I really don't have the skills or interest to research high risk investments. For me this is really about setting up a long term, low to medium risk, form of passive income