IFA versus HL

pip895

I would start by selling the individual shares & the HL multi manager funds. I would then go through the funds under 5k and work out if they were performing a useful function or not and sell any I wasn't happy with/couldn't justify. The ones I want to keep I would top up. I might use a holding fund rather than sitting in cash - something like VLS 80 might be suitable.

Having hopefully thinned things out a bit, it would be a mater of using the research tools to shift the portfolio to my desired asset allocation + remove duplicates etc.

If the first portfolio in your list is unwrapped then be carful about generating a CGT issue and avoid buying accumulation units.

cfw1994

flopsy1973 wrote: »

Any advice on my funds

To me, it looks like way too complicated for such a relatively small amount!
How did you “chose” them in the first place? No offence, but it feels like you used a dartboard

Advice?

Well, I would personally recommend investing 30-60 minutes of your life watching and absorbing the videos posted by Lars Kroijer here.

Then come back with what you think.
Maybe you will tell me you wasted 30-60 minutes of your life.....but I would hope not.

& that is, of course, just my 0.02.

flopsy1973

pip895 wrote: »

I would start by selling the individual shares & the HL multi manager funds. I would then go through the funds under 5k and work out if they were performing a useful function or not and sell any I wasn't happy with/couldn't justify. The ones I want to keep I would top up. I might use a holding fund rather than sitting in cash - something like VLS 80 might be suitable.

Having hopefully thinned things out a bit, it would be a mater of using the research tools to shift the portfolio to my desired asset allocation + remove duplicates etc.

If the first portfolio in your list is unwrapped then be carful about generating a CGT issue and avoid buying accumulation units.

why avoid buying accumulation units?

flopsy1973

cfw1994 wrote: »

To me, it looks like way too complicated for such a relatively small amount!
How did you “chose” them in the first place? No offence, but it feels like you used a dartboard

Advice?

Well, I would personally recommend investing 30-60 minutes of your life watching and absorbing the videos posted by Lars Kroijer here.

Then come back with what you think.
Maybe you will tell me you wasted 30-60 minutes of your life.....but I would hope not.

& that is, of course, just my 0.02.

relatively small amount !!! i thought it was a substantial amount there must be lot of wealthy people on here then lol

thanks for all the suggestions will try and weed these down
What should i be looking for in a IFA and what questions should i ask if i decide to use one

bigadaj

flopsy1973 wrote: »

why avoid buying accumulation units?

Because the funds increase by a combination of both dividends and capital, so it's a pain to calculate what portion is dividends, on which income tax is potentially due, and capital increases which may be subject to capital gains. If you hold everything as income these will be reported separately.

flopsy1973

Update on this had a meeting with 2 financial advisers and 1 has taken my portfolio and compared it with my risk profile with company he uses Brewer Dolphin. I would get more or less same returns but for less volatility and less charges around 2% compared to HL 2.5% but on looking at the report he has included  initial charges as being paid but on checking my paperwork with HL i never did pay inital charges on these funds. So his charges for HL are somewhat inflated. All they seem to do is give your pot of money to someone else to stick in their portfolio depending on your risk rating. Again im just paying another cut to him to do not a lot instead of going direct to company. I am somewhat dissappointed what are your views on this. maybe i could do better DIY once i tidy up the portfolio   

fronty

Good grief, I remember this thread, not wishing to be rude but have you been procrastinating all this time? I ditched my IFA and moved my 375K fund into an II SIPP back in December, since then it's grown around 5.5%, current fund value is now 395K, that's 20K for doing jack-all and what's more my greedy IFA is not getting his hands on any of it.

I put half into HSBC Global Strategy Dynamic and half into Vanguard LifeStrategy 80. HSBC is ahead slightly on 5.57% whilst VLS is on 5.1%.

I'd be interested to know how much your fund has grown since you first posted, and how much in fees HL has taken in the meantime? You may have beaten me but I'm not paying any fees other than the II platform charge of 20 quid a month (and fund fees of course).

You've got 6 pages of advice here, what have you been waiting for? :-)

bowlhead99

flopsy1973 said:

I would get more or less same returns but for less volatility and less charges around 2% compared to HL 2.5% but on looking at the report he has included  initial charges as being paid but on checking my paperwork with HL i never did pay inital charges on these funds. So his charges for HL are somewhat inflated. 


All they seem to do is give your pot of money to someone else to stick in their portfolio depending on your risk rating.    

Well, in your first post you said you had "lost faith" with HL, even though you also said, "never had advice of them just used them for diy".

So it wasn't their bad advice at fault and really what you have lost faith in is your ability to construct a portfolio from the choices offered on a platform of thousands of options. Perhaps this is because you don't really understand the issues and, if left to your own devices, will just end up buying whatever the platform is promoting as an easy solution. So to avoid the trap of making poor choices, you're looking for advice.

I suppose the advisor is trying to make an 'apples to apples' comparison between his option and elsewhere by saying that if you had taken advice either way (because you lost confidence in making your own choices) then there is going to be an initial cost whether you use him or HL or someone else. As you don't want to be stuck with responsibility for your own choices (because you might 'lose faith' again) he is thinking that advice cost plus fund cost plus platform cost should all feature in it, and he knows the HL advisors would only offer their own funds because they are not independent.

So the comparison sort of makes sense. Really the option you are perhaps considering is 'DIY with no advice' vs 'advised with his solution'. Unfortunately it's hard for him to give you a projection/comparison of that because he would need to know what you would buy if left to your own devices. You've said you don't want your current solution, you have lost faith in it and want something else, but you don't seem to know what that something else is because you're still looking for it?

So his comparison of X vs Y is a bit flawed, because he doesn't have enough to go on other than what you might get if you took an advised route with HL and ended up with something similar to what you currently have...

Again im just paying another cut to him to do not a lot instead of going direct to company. I am somewhat dissappointed what are your views on this. maybe i could do better DIY once i tidy up the portfolio

  With 'only' £300k (ie not a million plus) I don't necessarily see there's a lot of value in appointing a discretionary fund manager through an IFA and adding to the ongoing cost - you'd hope an IFA could give competent advice on portfolio construction using investment funds and platform from the whole of the market, without needing to engage another adviser or DFM to package up a solution for you.

But as to your question whether you could do better DIYing if you tidied up the portfolio, that's a bit of an unknown - you haven't really demonstrated that you know how best to do that or have a great appetite to engage in lots of discussion on the ins and outs of what's available, which is why you're looking for an advisor, right? 

Crowdsourcing part or all of a solution here is an option of course, but remember that nobody offering guidance here has any 'skin in the game' - it's not our £300k and if we tell you what we would do (despite inevitably having different personal circumstances, knowledge levels and risk tolerance to you), we don't have any obligation (moral or otherwise) to bail you out if/when it goes wrong...

Thrugelmir

flopsy1973 said:

 I am somewhat dissappointed what are your views on this. maybe i could do better DIY once i tidy up the portfolio   

Have you taken no action at all to at least rationalise the holdings? 

oggy_oggy_oggy

I suspect your problem here is that rationalizing a complex portfolio like this is a much more complex job than creating a new portfolio from scratch. The best way to do that latter, if you start by not knowing much about portfolio construction, is to shove the lot in one multi-asset fund at an appropriate risk level. Or, if you really can't decide which range of multi-asset funds is best to use (out of VLS, L&G Multi-Index, Blackrock Consensus, etc), split it equally between 2 or 3 of those ranges (using a fund at approximately the same risk level from each range).

So the best way to simplify your task (if you seriously want to consider DIY) is to nuke the existing portfolio from orbit and reinvest the proceeds in one (or 2 or 3) multi-asset funds. The only exception is if this portfolio is partly unwrapped (I see ISAs were mentioned, but I'm not sure if it is all ISA'd), in which case you should first check whether selling the whole unwrapped portfolio would trigger any CGT liability.

An IFA would probably not shove it all in a multi-asset fund, and that is perfectly fine, because they should know how to construct a more complex portfolio. And that approach will have some advantages. But DIY doesn't have to mean imitating an IFA. Their approach may outperform comparable multi-asset funds, but it will incur charges for advice; so it's swings (which definitely exist) and roundabouts (which may or may not exist).