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Could I do any better

Whilst in lockdown I have decided to get my head around our finances. I am 59 and my wife is 54. I retire next year and my wife will also go at the same time. Been reading the pages here for a long time now and feel even if I were to lose money I would not be paying over £2000 per year.

 At present we have an IFA who looks after our affairs and we both have the same investments. 

A Pro Fund Growth which in Oct 2019 was £110,454, Jan 2020 was £111,581, April 2020 it is £100,114.

Out of this we had an ongoing advisor charge of £135.59 per quarter plus the annual management fee of £283.28 also per quarter.

 I understand that the investment has gone down due to the Coronavirus and stuff but even when it was going up the fees to me seem excessive for the performance of the plan.

 We have an Aviva ISA which we opened November 2019 which has an OAC of £24.65 plus the management fee of £12.32 for the one quarter.

 In cash we have £157,000 and £8,250 per month split between the best regular savers.

 Our pensions are all sorted we are both in a defined benefits scheme and paying AVC’s as well. We have no mortgage or debts.

 We are thinking of transferring these to a Vanguard life strategy fund or something similar. I have a Halifax share dealing account but would open an iweb account after reading about it on here it appears to be more beneficial to hold the investments that way.

 I have bought and sold shares in the past and with our retirement immanent I will have more time to devote to this.

 According to our profiles I am a Risk 6 (Balanced Growth) and my wife is Risk 4 (Cautious Balanced). 

 If you have any questions please feel free to ask and between us all I can try and get better value for my money.


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Comments

  • masonic
    masonic Posts: 25,464 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    I agree that the fees look high and I don't think a case can be made for the Prufund if you are willing to embrace the ups and downs that a smoothed fund like Prufund obscures. It would probably make sense to wait for any Market Value Reduction to be wound back before making the switch.
  • Aminatidi
    Aminatidi Posts: 579 Forumite
    Sixth Anniversary 500 Posts Name Dropper
    There's a natural argument that you have an automatic 2% "head start" regardless of anything else that should happen.

    I'll let others comment on the funds you're in as I know nothing about them but I've just gone through a similar exercise for my mum albeit with a smaller pot of around £40K and the conclusion was that the cost of the IFA couldn't be justified.

    Personally I would say you're along the right lines especially if you don't feel you're getting ongoing advice and/or planning for the £2k/year you're paying in fees.
  • Albermarle
    Albermarle Posts: 25,878 Forumite
    10,000 Posts Sixth Anniversary Name Dropper
     I understand that the investment has gone down due to the Coronavirus and stuff but even when it was going up the fees to me seem excessive for the performance of the plan.

    Normally you do not engage an IFA in order to maximise return from your money. You engage them to take an overview of your overall finances ; objectives; risk tolerance etc and suggest an investment that fits your profile . Many clients prefer low volatility to high growth and others vice versa ( most in the middle somewhere ) . The 0.5%pa charge is at the low end for the size of investment. The 1% charge for a managed fund is also normal 

    By all means look at DIY but from what you have said there is no indication that the advisor is doing a bad job .(Maybe they are but not from the facts supplied) 

     We are thinking of transferring these to a Vanguard life strategy fund or something similar

    I have bought and sold shares in the past and with our retirement immanent I will have more time to devote to this.

    Buying and selling shares is generally a lot more risky than buying funds and probably best kept as a fringe activity to the main investments.

  • wallstreettrader
    wallstreettrader Posts: 14 Forumite
    10 Posts
    edited 31 May 2020 at 2:45PM
    I am a trader so risk is the game. But for you I think you will get more return by investing the money you are wasting on those fees. This guy Lars is an expert and its worth watching how he thinks nonprofessional investors should save money and get bigger returns.

    I cant post a link here so Ive taken off the http bit but you can copy it and google this

    monevator.com/this-former-hedge-fund-manager-reveals-how-you-can-invest-for-life-in-five-quick-videos/

  • kinger101
    kinger101 Posts: 6,502 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    ^^
    Yeah.  And I'm the Dalia Lama.
    "Real knowledge is to know the extent of one's ignorance" - Confucius
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    10,000 Posts Fifth Anniversary Name Dropper Photogenic
    OP, if you are just going to buy and hold a fund or three then i dont see what an IFA is doing for you except probably losing you half any investment growth you make, or turning small gains into losses.
    I dont actually think your point about "with our retirement imminent I will have more time to devote to this" makes any sense though because you shouldn't envisage  frequent trading, there's no need to devote much time at all, a few hours a year max is all thats needed to decide on a long term investment and stick to it and perhaps adjust every now and again as in every 6 months or yearly.
    I've got more money than you in a SL SIPP which was 3 funds, and I've just trimmed down to 2, its been pretty much left alone for the past 6 or 7 years, only change was when i took money out a year ago and even then that was proportionate to each fund, so no real change. Point being, i dont need to be retired to have the time to leave it alone  :)

    I suggest you read this (and the blog its in, in general, no affiliation just think much of it makes a lot of sense )

  • mollycat
    mollycat Posts: 1,475 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    kinger101 said:
    ^^
    Yeah.  And I'm the Dalia Lama.
    Hi. Just noticed this :smile:
    I lost a rucksack up on K2 last summer, Nike, blue and white, sentimental value only.
    Do you know if it's been handed in yet?
  • Sailtheworld
    Sailtheworld Posts: 1,551 Forumite
    Tenth Anniversary 1,000 Posts Name Dropper
    The advisor and AMC costs are about 1.5%. Yes, I think you could do better. What's stopping you buying a 'pro growth' fund directly for a third of that cost max?
  • dunstonh
    dunstonh Posts: 118,540 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    The adviser charge is 0.5% from the figures.  For the size of the investment, it is the ballpark dominant figure.  Indeed, many would be charging 1% on that sort of size.    So, the charges seem reasonable.  
    <div>We are thinking of transferring these
    to a Vanguard life strategy fund or something similar.</div>
    The Pru Fund has elements of capital protection and smoothed returns.    So, what you are doing on the Pru fund if you are considering VLS?  If you are happy to increase accept the volatility that goes with unit linked funds without protections/smoothing then you can bring the fund charges down.   However, you must have said some things that indicated to the adviser that you struggle with volatility.   Now you are saying you are happy to accept it.  Have you told the adviser this?

    The Prufund is really for people that do not understand investing and cannot handle small amounts of volatility.  Wherever there are capital protections or similar, the charges tend to be higher as part of the fee goes towards the costs of that.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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