Financial adviser retiring - Would like to manage money directly now

1234John

Thankyou and in my ignorance what are the definitions of passive and active management?

Aminatidi

1234John said:

Thankyou and in my ignorance what are the definitions of passive and active management?

I'm sure someone can offer a more eloquent explanation but let's take a basic example of the FTSE 100.

If you look on the news each day usually you'll hear/read that the FTSE 100 has gone up/down by X points/percent.

If you're in a "passive" fund that simply tracks the FTSE 100 that fund will also go up/down by the same amount as it's dumb and just follows whatever it's invested in so you simply get the return of that market.

It could be the FTSE 100 or it could be a world tracker that tracks the FTSE or similar indexes in the world markets.

Active is where someone like Randolph or Mortimer Duke might think they can make money by investing in the Frozen Concentrated Orange Juice Company so they'll make a choice to invest in that particular company.

Sometimes it works sometimes it doesn't

I'd suggest spend a bit of time on here and search some of the fund names mentioned above.

There is tons to read and the more you read the more it starts to make sense

1234John

Makes sense. I appreciate all the advise!! Thankyou.

Aminatidi

You're welcome, do you know what your money is currently invested in?

fred246

1234John said:

Ok, out of interest, if I did not want a financial adviser where is the best place to put 100K at the moment, low risk, limited hassle (DIYable) !! :-)

I am afraid 1234John Sonof is a financial adviser although I am not sure if he is pretending to not be at the moment. He is desperate to make you think that investing is incredibly complex and you need to pay him massive fees for his sort of person to do it for you. He will always criticise other people's choices but he will never make any recommendations. He will try and complicate things so you think that you can't invest for yourself.

bowlhead99

fred246 said:

1234John said:

Ok, out of interest, if I did not want a financial adviser where is the best place to put 100K at the moment, low risk, limited hassle (DIYable) !! :-)

I am afraid 1234John Sonof is a financial adviser although I am not sure if he is pretending to not be at the moment. He is desperate to make you think that investing is incredibly complex and you need to pay him massive fees for his sort of person to do it for you. He will always criticise other people's choices but he will never make any recommendations. He will try and complicate things so you think that you can't invest for yourself.

 
I am afraid 1234John that Fred hates IFAs and is desperate to make you think that investing is incredibly easy and that there couldn't be any value in buying-in some expertise,  making him appear to be a wise man for not using an advisor himself and always portraying them as charlatans. He will always criticise the use of an IFA - and if an IFA gives pointers to why certain funds might not be appropriate, or gives up their free time to highlight issues that a new investor might not have considered to be an issue (because they don't know what they don't know), he will say this is because IFAs are trying to scare people into buying their services.

Really, the fact that IFAs on here will give helpful pointers to make you think a bit more about how you could allocate your wealth, but always stop short of giving a direct recommendation on here - because advice from professionals is a regulated area, and they don't know you from Adam, and good advice can depend on your exact circumstances... should not be a surprise. In some sense of course, by showing their expertise or that they know things you might not know, they're marketing the whole concept that paid professionals know what they're talking about and could be useful. So, their very being here during working hours isn't necessarily wholly altruistic. It may lead to extra work for the profession at large.
 
Still, people don't need to be altruistic to be of use to you when you are trying to find things out. Generally people here are friendly and it's good to get ideas from different perspectives. Of course there can be more merit in buying advice in some situations than in others.

SonOf

1234John said:

Understood! Next question then is there any diy funds I can invest in that I can monitor monthly/weekly for a sensible return? Or is the whole industry structured around the middle men/ladies :-)

Most platforms will offer you nearly 30,000 investment options to select from.

You can filter down pretty easily but you do need to understand what you are doing to a level greater than you do now.     If you want to DIY then you need to spend some time reading up about it.  

fred246

You are best looking at Vanguard. Their ISA has charges of 0.15% and their lifestrategy range is 0.22%. So total charges of 0.37%. You just have to decide the percentage of shares you want. Type VLS100 into google and then click on the hl (Hargreaves Lansdown) one. Click on charts and performance. Imagine you invest £10000 in February 2015. You would now have £17063. Look at the peaks and troughs. From August 2018 to December 2018 your investment would have gone from £15300 to £13000. Quite a drop but it can be much higher with 100% shares. Now do the same with VLS20. Your £10000 would have made £12803. The biggest drop would be much less though from £11500 to £10800 Aug to Nov 2016. So the higher the percentage of shares the higher you should end up with over a long period but the bumpier the ride will be.
Total invested VLS20 £1509 VLS40 £5076 VLS60 £7559 VLS80 £3560 VLS100 £1710 (Millions)
So you can see that VLS60 is the most popular choice.

fred246

If you are an IFA the most important thing is YOUR FEES. Your customers do not understand investments and so are happy to see any increase in the value. If stockmarkets have gone up 40% the customer doesn't know that. They will be overjoyed by 10%. If the customer has a DROP in value of investments they wonder WHY am I employing an IFA. They may sack him and then the IFA will lose the most important thing HIS FEES. For this reason IFAs will avoid any investments that may drop severely in value because they may lose customers and THEIR FEES.

fred246

SonOf said:

 I am confident enough to monitor my investments on a yearly/monthly basis and determine if they are performing.
Performance is just one bit of it.   Suitability, due diligence and risk are the other issues.   For example, we get a monthly governance report on investments that may pull funds for a reason.   Sometimes there are special bulletins on things that cannot wait.    Whenever we get a bulletin that turns a fund to a "sell" rating, we check who is on our ongoing servicing list and who has that fund and go to them to discuss the changes that need to be made.     Two relatively recent removals involved funds that have been performing very well but have issues coming up.   Waiting for the fund to drop off in performance may be too late.   So, you cant just wait until performance drops off.  

If you invest in potentially dodgy funds like Woodford's then potentially this sort of information may POSSIBLY be of benefit although I really doubt it. If you invest in products like Lifestrategy you just invest and forget about it because it invests in thousands of companies around the world. No panic buying and selling. Some of my active funds are performing slightly better than my passive but I find they cause me much greater anxiety than the passives and are probably best avoided.