Do I need a Financial Advisor?

FindingthePlot

Thanks everyone for your thoughts - while I appreciate there's no one size fits all 'correct' answer to this, your opinions have helped me sort my head out.  I think I was having a little panic over the IFA appointment - I didn't want to turn down the 'free' advice but given my circumstances I think I was over-complicating matters.  Essentially, with the amount of money I have and the level of risk I want to expose it to (virtually none!) I am definitely better off keeping it simple and saving, rather than launching into investing.  Once I'm earning again I'll reconsider my position and in the meantime I will indeed do lots of research.

Albermarle

Once I'm earning again I'll reconsider my position and in the meantime I will indeed do lots of research.

Regularly looking at  this forum would also help.

RolandFlagg

My advice for what's it worth is drip feeding a small monthly amount into a fund/etf for the long term. The longer you can leave it there but more risk/reward you can be. A S&P etf with something like a 0.05% expense ratio would be my choice.
Over 90% of fund managers fail to beat the S&P index.

Malthusian

RolandFlagg said:

My advice for what's it worth is drip feeding a small monthly amount into a fund/etf for the long term. The longer you can leave it there but more risk/reward you can be. A S&P etf with something like a 0.05% expense ratio would be my choice.
Over 90% of fund managers fail to beat the S&P index.

That would be a very poor investment for someone starting from scratch as a) it is missing 75% of the global economy and novice investors should not be betting the entire farm on a single country b) it is 100% equities and well over the risk tolerance of the vast majority of retail investors.

If the OP is going to start investing they should pick a multi-asset fund that represents the global economy and is suitable for their risk tolerance.

Albermarle

RolandFlagg said:

My advice for what's it worth is drip feeding a small monthly amount into a fund/etf for the long term. The longer you can leave it there but more risk/reward you can be. A S&P etf with something like a 0.05% expense ratio would be my choice.
Over 90% of fund managers fail to beat the S&P index.

For you this could be OK, but if the investor is inexperienced and/or has a less than high risk tolerance , and their investments suddenly dives down ( as it could well do ) they would probably pull out and never invest again.

RolandFlagg

Of course. I did say the longer he could leave it. American indexes tend to outperform the FTSE. Over half of the biggest companies in the World are in there. UK? about 5. But of course past performance and all that.
An All World Tracker is of course less risk/reward. The point was was mainly making is that a Fund Manager is not needed for most people.

RolandFlagg

And I did say Monthly Drip feed small amounts!

bowlhead99

RolandFlagg said:
Of course. I did say the longer he could leave it. 

And I did say Monthly Drip feed small amounts!

The OP had mentioned "...the level of risk I want to expose it to (virtually none!)..."     Fair enough, if you have a bit of money that you don't need for the longer term, invest it, whether as a lump sum or drip fed.  But the fact that it is only a small amount, or is only going in month by month, should not really be an excuse for making it a 100% equity fund invested into one country's stock exchange when there are all manner of more diversified, 'mixed asset' investments available these days, covering shares listed on 40+ countries' stock exchanges plus bonds and other asset classes to reduce volatility.

RolandFlagg said:

Of course. I did say the longer he could leave it. American indexes tend to outperform the FTSE. Over half of the biggest companies in the World are in there. UK? about 5. But of course past performance and all that.
An All World Tracker is of course less risk/reward. The point was was mainly making is that a Fund Manager is not needed for most people.

With an All-World tracker you are looking at loss potential of 50-60% over a one to two year period.  In the last financial crisis from autumn 2007 to spring 2009, the FTSE All-World lost 58% peak to trough, measured in dollars. As it happened, dollars strengthened relative to sterling and other currencies at that time so the Americans felt that 50-60% loss on their global portfolio measured in dollars though we benefited from our currency moving the other way, relatively speaking, and each dollar became worth more pounds, so we didn't lose as many pounds as they lost dollars.  But 40-60% loss  potential is quite possible for a 100% equity investment with a high proportion of foreign stocks if the currency moves against you rather than in your favour.

You can see it on the index providers' factsheets for the period. The fact that they are no longer on the last '10 year chart' isn't an excuse to brush them under the carpet.  So when you are deciding to put all your investments in the 'overseas stocks' basket and take that high risk and volatility, it doesn't make sense to limit it to just one country's stock markets to shave a bit off fees.   If you say the world tracker is 'less risk less reward' than the US index, despite it having 40-60% loss potential, from its peak, you are saying the US index has more risk than that, and so would be a crazy investment for the OP who is a novice investor and risk-averse.

Also, to assume the global index has 'less reward' potential than the US index seems naive. Over the last decade economic cycle, the US happened to be the best place for a UK investor to be invested. Over the decade before that, it wasn't.  To presume that something will be the best just because in recent memory it has been, seems naive. 

With only £60k to save or invest, the OP probably does not need to buy advice from an advisor, because DIY investing in basic balanced fund products is not rocket science and for the advisor to make any profit out of his advice service he would need to charge an amount of money that's quite large in the context of £60k and not very efficient to the OP paying the bill.  However, at least if he saw a proper advisor he would not get stupid advice like, "stick it all in this index because it usually does the best, at least while I have been watching it, although it is a high risk thing to do so only put a bit of money in it and drip it in, and so you'll need to find an entirely different solution for all the rest of your money."

coachman12

We don't need "War and Peace" to just say "well done FindingthePlot on your achievements so far in life" -----and if you continue in present way for the second half of your life, there'll be even better times ahead. I like your idea of spending so many months in financial studying-----how sensible.
As some others have said, with brevity : don't bother with IFA for the amount in question, place the money into savings, and enjoy the free time ( will Covid allow a good holiday during your time off ?).
Whatever you do, all the very best.