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IFA or DIY - any thoughts appreciated

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  • BritishInvestorBritishInvestor Forumite
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    cfw1994 said:
    zagfles said:
    euanlowe said:
    I'm going to chuck in my 2 cents. A very good friend of mine is an IFA but I manage my money myself. The overall tone of this discussion I've felt has been that the IFA's value is the fund split, but I agree with @BritishInvestor that that's almost irrelevant. If you get an IFA in, typically they will write you a 40 page document analyzing the needs of you and your family. It'll cover tax, life insurance, expense related to your kids etc. My friend charges 1 percent for this, so pretty pricey, but at least its doing the work and you get to blame them for any gaps. You seem a bit early on your self management journey, so if you do decide to manage this yourself, I am going to put forward the idea of just having it all in a vanguard lifestrategy fund which is diversified by design and very low cost - and then trying not to touch it till you retire. All the space in between, with a lot of guessing and finger in the air, can work, but generally doesn't. A good IFA is a great choice - but comes with the problem of differentiating between the good ones and the bad ones. If you are determined to figure it out yourself, I'd still put most of it into something very vanilla and play around with just a portion till you have learned how to minimize the regret linked to your decisions. I really enjoy it but its a proper nerd out following the market in your spare time. It takes a lot of work not buying high and selling low.
    Indeed - if you just want someone else to handle asset allocation, just buy a multi-asset fund.
    If you want all the rest of the above, use an IFA.

    OP, you sound like your head is screwed well on.
    Whilst the IFA poo-poo’d your selections....I’m curious: have they done well?   Maybe you are an unwittingly special guesser!
    Your numbers are pretty decent for your age....have you an idea how much you want, what you need to live on?   I always feel an IFA ought to be doing more than just picking some funds for you.  Much more! 

    I also feel that many who come here are perfectly capable of managing their money well enough.  They have an interest to learn, perhaps some experience, and are actively seeking out answers.  Maybe you fall into this category?

    There is a mystique about IFAs, and how they make selections etc.  If you have other reasons to involve one, then go ahead.  I’ve a pal who uses one on the basis that if he died, his wife wouldn’t have a clue what to do, & would “spend it all on handbags”!
    I’m more a fan of the approach espoused by https://www.kroijer.com/ - chances of you getting the top funds or pick the best fund manager year after year after year.....are minimal: so buy into the lowest-cost global fund instead.  
    I'm not sure why you think IFAs don't follow the Kroijer approach? 
  • SteveL555SteveL555 Forumite
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    Hi, thank you again for all the feedback - I'm tending towards the self-managed route, but have much more research to do (I've ordered the John Edward book, though it takes a week to arrive, and also the FT Guide to Saving and Investing for Retirement)
    Was my patchwork of investments doing well? - yes, I think it was doing ok. As things stand I've put in cash of £278k into the HL SIPP, and it's value is £341k - so £63k up. Now it's been up and running since late 2013, however the vast majority of the money has come in over the last 2 and a bit years. I believe the weighted average investment date is 2.79 years ago. (which suggests to me, though my logic may be flawed, that I've got an annualised rate of about 7.6% - and I know this is simplistic, but that's how it's been to date). However, and it's a big however, it dropped off a cliff back in April, - lost a vast amount of that (though most of that has come back), and I think that's down to not being correctly diversified. 
    As for Fidelity vs FundsNetwork. You're both right (apologies, can't remember your 'handles'). The IFA's plan is to move things to FundsNetwork at 0.2%. I went to have a look and it seemed FundsNetwork was just for IFAs. But it appeared to be a Fidelity product, and they have their Fidelity platform, which was available to me, and that was also 0.2%.
    Oh, and I've started wading through Monevator.com. There's a fair amount there, but at the very least it's thought-provoking.
    Lifetime allowance? I can't see it being an issue for a fair old while. Nice issue to have of course.
    And yes, I'm very aware I'm lucky. I earn what for most people would be a very good salary, and sold out my share of a business a fair few years ago which meant I could get the mortgage in a half-nelson, and it's getting thrown out the ring completely at the start of September. That's allowed me to hurl cash at the pension. Honestly though, I think a lot of where I'm at is down to having parents who were very frugal, and smart, with money - they had to be. (helps having a wife who's not bothered by flash cars or multitudinous shoes - and, touch wood, our little girls seem to be equally unbothered by shows of wealth). I'm off-topic. Thank you again for your thoughts. I'll never know what difference my decision will make, but I know it's big.
  • dunstonhdunstonh Forumite
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    My belief is that those with clear objectives and a (typically multi-decade) plan, and with a portfolio aligned to that plan are more comfortable with temporary market drawdowns. 

    Correct.   Those with structure and process and will typically be less concerned about short term issues as their planning is long term.

    not just short sharp drops like we've had recently but also a multi-year drags such as the 70s.  

    Last one was between 2001-2003.  3 negative years in a row.  It is only a matter of time until the next one.

    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.
  • AlbermarleAlbermarle Forumite
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    However, and it's a big however, it dropped off a cliff back in April, - lost a vast amount of that (though most of that has come back), and I think that's down to not being correctly diversified. 

    Depends what you mean by a cliff ? FYI , a typical medium risk multi asset fund is approx back to where it was on Jan 1st , if you want to compare.

  • retireddocretireddoc Forumite
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    Lots of good advice in here, but why has no-one mentioned the personal satisfaction or fun of managing your own portfolio? My SIPP is heavily weighted towards cheap index trackers and multi-asset funds such as Vanguard, but I love having a dabble with things that interest me. So the £1,000 I put into a small obscure cobalt mining company has almost totally gone down the swanee but the few thousands I put into Tesla (@$180) has done somewhat better :) Don't underestimate the 'hobby' aspect.
  • MordkoMordko Forumite
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    Lots of good advice in here, but why has no-one mentioned the personal satisfaction or fun of managing your own portfolio? My SIPP is heavily weighted towards cheap index trackers and multi-asset funds such as Vanguard, but I love having a dabble with things that interest me. So the £1,000 I put into a small obscure cobalt mining company has almost totally gone down the swanee but the few thousands I put into Tesla (@$180) has done somewhat better :) Don't underestimate the 'hobby' aspect.
    The general advice is that if you really need “play money”, keep it to no more than 5% of the overall portfolio. The objective of having fun isnt aligned with having a secure retirement. The majority of players get burnt but they don’t tend to brag. A few winners who do attract the next batch of players
  • edited 8 July at 2:43AM
    MordkoMordko Forumite
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    edited 8 July at 2:43AM
    “My belief is that those with clear objectives and a (typically multi-decade) plan, and with a portfolio aligned to that plan are more comfortable with temporary market drawdowns.”  


    People who are the most comfortable are the ones who invest, set up an automated withdrawal and forget. The ones who watch talking heads investment programs and check up the value every day tend to sweat the most. People with a plan sweat too when everything turns red; its just human. But people with the plan have a better chance of minimizing bad decisions and reacting to short term market movements
  • Joey_SoapJoey_Soap Forumite
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    I have to say to the OP, even if you do nothing else, move your pot of investments away from HL and to Interactive Investor. They have a fixed fee structure. So unlike HL the bigger the pot gets, the fee stays the same. With your amount of money invested, you will pay II less each YEAR than you pay HL is single MONTH. You need to do this ASAP since HL are costing you a fortune. Having done that, I ask you this - Have you done OK with managing your own fund? Do you see anything changing how you have done? Are you on track to meet your goals? If the answers are, Yes, No, Yes. Then transfer your investments away from HL to II and just keep doing what you doing. Yo me, it sounds like you are doing great but for some reason are having a bit of a confidence lapse. Very understandable at the moment. Stick with it, save yourself a small fortune in fees and carry on.
    (By the way, to be very clear, holding funds, HL are charging you 0.45% on the first £250k and 0.25% above that. Take a look what they are taking off you each month. It's a large amount of money you need not spend).
  • Spk307Spk307 Forumite
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    SteveL555 said:

    What I've been doing with that influx of money will probably make some of you scream - I've just looked at what I had and thought 'oh I should get a bit more global stuff', or 'maybe a bit more small company stuff'; - all funds, no plan.

    I did that when i started investing. Set random % for allocation towards regions and sectors. I then invested in active funds as I believe its worth paying 0.5-1% more to get better returns (I understand not many agree on this). But then I realised if I am not an expert in choosing stocks why should i choose regions and sectors? So I sold the funds and re-invested in 4 global diversified multi cap active funds. Let the fund managers earn their pay with their decision making.   
    My 2 pence - dont go down the route of choosing stocks yourself unless you have plenty of time and money. Its a slippery slope and will easily get you stressed. Its no different from gambling if you dont do fundamental research. I set a tiny gambling budget every month and spend it on betting sites. Wouldnt touch my retirement funds. Better things in life than worrying about movements in individual stocks.
  • AlbermarleAlbermarle Forumite
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    Lots of good advice in here, but why has no-one mentioned the personal satisfaction or fun of managing your own portfolio? My SIPP is heavily weighted towards cheap index trackers and multi-asset funds such as Vanguard, but I love having a dabble with things that interest me. So the £1,000 I put into a small obscure cobalt mining company has almost totally gone down the swanee but the few thousands I put into Tesla (@$180) has done somewhat better :) Don't underestimate the 'hobby' aspect.
    Even if you do not enjoy it that much, the other issue is that not everybody is happy handing control ( partly anyway )  of their finances to someone else . Plus to get the best from advice you have to divulge a lot of personal details, life ambitions etc which you do not have to do of course if you DIY. 
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