Help with ISA portfolio

tigerspill

Hi folks,

I am wondering if someone would wish to comment on the following ISA portfolio.  This was set up by an IFA in 2014 and the only service I have received since (at 1%) is rebalancing.  The total value is approximately £51,000.  My wife has a similar ISA set up at the same time with a similar fund split with £75,000.
When we set this up, we knew very little about investing hence the IFA.  Since then, I have read a lot on the subject, but an still a beginner I feel.
Other context is that we would be considered "low risk" - has been assessed a few times.  We also have other investments that we have made ourselves in VLS40 (similar amounts). 
I think I want to take this away from my IFA and reinvest this in VLS40.  Splitting across so many funds seems overly complex.  VLS40 has out performed this portfolio at pretty much all stages over the past few years (even ignoring the 1% fee).  But I dont want to make a big mistake.  The IFA is part of a company and am on the third or fourth individual IFA on this.  Just not keen to continue the relationship with them.  I had a meeting in December, but I didn't followup on completing the forms to progress further advice.  No idea if I am still being charged the 1% at the minute and nit sure how to find out.
Not sure why they are all Inc. funds as we have been accumulating so far - all income is reinvested anyway.
This is all on the Aegon platform.
At the minute I cant manage this myself - so If I wanted to do this, I am guessing I need to call Aegon to retake control from my IFA?
Also, there are a couple of property feeder funds in here - I think some of which cant be traded currently?  Not sure.
Thoughts (Go easy on me ).  Sorry for rambling.

Fund                                                             %age

L&G US Index Trust C Inc                              15.53

L&G European Index Tst C Inc                       10.77

L&G UK Index Trust C Inc                              10.40

M&G Strategic Corp Bd I Inc GBP                  8.76

M&G UK Inftn Lkd Corp Bd I Inc                     8.75

L&G All Stocks Gilt Index Tst C Inc                 6.43

L&G UK Property Feeder I Inc                        4.89

Janus Henderson MAAbRt I A                        4.59

ASI GlAbsRtStr Pf 1 A                                   4.47

Janus Henderson SgBd I I                              4.35

Aberdeen UK Property Feeder I Inc                3.55

M&G Feeder of Property Ptfl I Inc                   3.47

L&G All StcksIdxLkdGltIdx Tst C Inc               2.77

L&G Japan Index Trust C Inc                         2.55

L&G Global Emerging Mkts Idx C Inc              1.99

ASI GlInftnLdBd R Pf 1 I                                 1.98

L&G Pacific Index Trust C Inc                         1.98

                                                                    

Cash                                                             2.77

Sailtheworld

If you asked the IFA to charge you £500 to create a butcher's muddle they've done a wonderful job.

It's pretty difficult to take detail above and compare the asset allocations to something like VLS40 (call me a cynic but I would say that was by design). On the Aegon platform can you see a portfolio X-Ray tool? That might give you a better chance of comparing the two.

VLS40 has an OCF of 0.22% (you'll have platform charges on top) and there are probably cheaper ways to, sort of, replicate VLS40. Such as buy a World tracker fund (see earlier thread - HSBC ) for the equity component and VGOV for the gilt component - not like for like but the OCFs are 0.15% and 0.07% respectively.

That'll save you the best part of £500 / year. Who knows maybe the IFA has delivered the perfectly constructed portfolio based on your needs and wants but I doubt that and obviously you do too.

tigerspill

Sailtheworld said:

If you asked the IFA to charge you £500 to create a butcher's muddle they've done a wonderful job.

It's pretty difficult to take detail above and compare the asset allocations to something like VLS40 (call me a cynic but I would say that was by design). On the Aegon platform can you see a portfolio X-Ray tool? That might give you a better chance of comparing the two.

VLS40 has an OCF of 0.22% (you'll have platform charges on top) and there are probably cheaper ways to, sort of, replicate VLS40. Such as buy a World tracker fund (see earlier thread - HSBC ) for the equity component and VGOV for the gilt component - not like for like but the OCFs are 0.15% and 0.07% respectively.

That'll save you the best part of £500 / year. Who knows maybe the IFA has delivered the perfectly constructed portfolio based on your needs and wants but I doubt that and obviously you do too.

Thanks for replying.
A "muddle" seems about right.  I looked at some of the fund fees and some are up near 1%.  Add IFA 1% is 2%.  Not sure hat the Aegon platform cost would be.
I have also notices that some of the funds seem to have a high risk index - SRRI.  Some up at 5/6 (out of 7).  Seems strange given I think my risk appetite was maybe 2.
I just cant seem to make sense of the construction of this set of funds (against mine or any base requirement).
I probably should have asked all these questions from the IFA sooner.  But dont really want to go back to them.
The more I look at it, the less happy I seem to be.
I am just trying to understand if there is some good logic in this portfolio before making any decision.

coyrls

Ask your IFA for a copy of the underlying asset allocation model; it will be hard work to try to reverse engineer the model.

tigerspill

coyrls said:

Ask your IFA for a copy of the underlying asset allocation model; it will be hard work to try to reverse engineer the model.

Thanks for the reply.  
I am not sure I really want to go back to the IFA.  I will look up the original documentation they prepared for me to see if there is reasoning in there.  
I am now just coming to the conclusion that I want to move on and manage this myself.  Basically consolidate into a multi asset fund (VLS 40 or similar as I have elsewhere) or split into a Global equities tracker and bond funs as mentioned above.  Everything in my head is telling me to do this, but thought I would ask to se if anyone could bring some positive aspect to this portfolio.
Looking again, 12% in property seems high.  And I think some of these funds have stopped transacting at the minute.  So not even sure the implications of this.

My thinking is to do an ISA transfer to maybe iWeb.  And buying VLS 40.  Another wrinkle is whether now is a good time to sell and buy given the volatility of the markets.  And whether the saving of over 1%/year will offset a potential price rise between selling and buying (I am assuming that if I transfer this has to be done with cash rather than the investments.  So probably a few weeks out of the market.

Albermarle

And whether the saving of over 1%/year will offset a potential price rise between selling and buying (I am assuming that if I transfer this has to be done with cash rather than the investments.  So probably a few weeks out of the market.

It is 50:50 whether you gain or lose during a cash transfer . The transfer may take a few weeks but you will not be out of the market for most of that time . I transferred from Aviva to a SIPP and the whole process only took 48 hours but that is quicker than average.

tigerspill

Albermarle said:

And whether the saving of over 1%/year will offset a potential price rise between selling and buying (I am assuming that if I transfer this has to be done with cash rather than the investments.  So probably a few weeks out of the market.

It is 50:50 whether you gain or lose during a cash transfer . The transfer may take a few weeks but you will not be out of the market for most of that time . I transferred from Aviva to a SIPP and the whole process only took 48 hours but that is quicker than average.

Thanks for the reassurance.  48 hours seems pretty good.  And you are right, maybe prices will drop and I will buy cheaper

coyrls

tigerspill said:

I am not sure I really want to go back to the IFA. 

Given that you're paying for an IFA, I would at least go back and ask them what the asset allocation model is, why they chose it and why they think it is a better choice for you than VLS40.  You can then evaluate what they have said and decide whether or not to move.

tigerspill

coyrls said:

tigerspill said:

I am not sure I really want to go back to the IFA. 

Given that you're paying for an IFA, I would at least go back and ask them what the asset allocation model is, why they chose it and why they think it is a better choice for you than VLS40.  You can then evaluate what they have said and decide whether or not to move.

OK, So I have a bit of an update after an online chat session with an Aegon agent.  Very helpful.
It seems I am no longer paying my IFA (last fee was in November 2019).  My last meeting was in September and I didn't follow up after that in returning the forms needed.  So at least I am saving that fee.  And I really dont want to go back to the IFA.
For better or worse, I think I have convinced myself that I would be better with VLS 40.  Reason being is that over the years I have had both - the VLS has out-performed the IFA portfolio - even when you remove the 1% IFA fee.  Also, in the past couple of months, VLS40 seems to have faired better during this turbulent times.  So in the good times to February and the bad times since, VLS seems to have done better (I use 1st of month valuations for comparisons).
So I have emailed Aegon to ask them to remove the advisor from my account initially (will likely do my wife's when I know the mechanics work.  This will give me a few days to check in my own head I am doing the right thing.  Their platform fees seem to be 0.29% - not great and not grim so will stick with Aegon for now.  
I have another wrinkle regarding this portfolio and transferring to another platform - but will post on a separate thread as it isnt really anything to do with the portfolio or IFA as such.

Aminatidi

Maybe I'm being unduly harsh but that looks hideous to take over as DIY.

Where do you even start 

For what it's worth I recently helped my mum move from an IFA to DIY under LifeStrategy, literally right as all this lot around coronavirus kicked off.

The transfer took ages (only finished last week) but the transfer was from Fidelity to Vanguard and was in-specie so no need to sell though I suspect this won't be an option for you.

Vanguard's website winds me up because there are things where for a huge company it just seems sloppy but it's easy enough that my mum can use it and the fees are peanuts.

She's saving about £600/year on a smaller pot than yours.

Even if you have a few concerns around whether you can "beat" the IFA keep in mind that with cautious investments £600-800 a year saved in fees every year adds up and gives some leeway.

tigerspill

Aminatidi said:

Maybe I'm being unduly harsh but that looks hideous to take over as DIY.

Where do you even start 

For what it's worth I recently helped my mum move from an IFA to DIY under LifeStrategy, literally right as all this lot around coronavirus kicked off.

The transfer took ages (only finished last week) but the transfer was from Fidelity to Vanguard and was in-specie so no need to sell though I suspect this won't be an option for you.

Vanguard's website winds me up because there are things where for a huge company it just seems sloppy but it's easy enough that my mum can use it and the fees are peanuts.

She's saving about £600/year on a smaller pot than yours.

Even if you have a few concerns around whether you can "beat" the IFA keep in mind that with cautious investments £600-800 a year saved in fees every year adds up and gives some leeway.

I will start by selling all the existing funds as they make no sense to me and I will buy into a multi asset fund - likely VLS 40.
Initially I will leave it on the existing Aegon platform.  Later on I will look to move it to a cheaper platform.
At lease that is my plan.