How to invest money from lump sum from work at retirement and sale of property

bowlhead99

csgohan4 said:
change your IFA, charging 1.67%/ 1K for a particular fund is daylight robbery

Laineyrose said:

...and investing £50,000. My gripe is whether it’s worth paying out over a £1,000 for my IFA to deal with investing the latter amount and if anyone can advise if there are other IFAs who wouldn’t charge as much. 

Realistically, other IFAs would likely charge just as much.

Your problem is that £50k is a lot to you, so you'd prefer to have help with it, but is not a huge amount to professional advisers whose services are more cost effective when dealing with bigger amounts (i.e. their fee can be a smaller proportion of what's being invested, if there is a larger amount being invested). If you were to go to another adviser instead who doesn't know you, I expect you'd find they would be looking to get £1k from you to cover the one-off work of getting to know you and your goals and doing the compliance stuff around it, making a recommendation and setting everything up, which is a bunch of hours work for them.

If you were expecting to have a lot more money coming in later (e.g. an inheritance on the horizon etc) then perhaps there would be scope to get them to cut you some slack on the initial fee, as an investment in the relationship so that you weren't tempted to take the rest of your money elsewhere - but you're not going to get it knocked down to a couple of hundred quid even if csgohan4 thinks it's 'daylight robbery' to charge a thousand.

Spending a couple of percent of the left-over money from your lump sum to have someone deal with investing it in something appropriate, is peace of mind for some people, but a waste of money to others who are more investment savvy or willing to learn. An option would be for you to put the money in the bank or NS&I for now while reading up on investments for the next few months, and just make the final decision before you get to the next tax year (i.e. don't miss out on using your ISA allowance).

If you were still working in the NHS in the the first couple of months of this tax year you'll be able to put your entire gross pay from this year into a pension (by putting 80% of it in and getting a boost from tax relief for the rest) just like you did with your £80/month in previous years. The IFA would likely split the £50k between your SIPP, ISA and the rest 'unwrapped' as a general investment account, but could all be invested in the same underlying investment fund(s).

Laineyrose

Thank you all for your useful comments and I will certainly look into what you have advised. Think I’ll tell my IFA I will sort myself out and save myself £1,000!

Laineyrose

Thank you for all your advice, I will certainly look into it more and try and do it myself as it will save me having to spend £1,000 on an IFA!

Laineyrose

bowlhead99
Thank you for your response to my dilemma, missed it at first as didn’t realise your message was on the 2nd page. The information is very useful and in particular your thoughts on the costs involved with my IFA.  I was just a bit worried as I’ve never had this amount of money in my whole life (bless my mum for leaving us the bungalow which my brother and I benefit from), but since I have received this money I wanted to make the most of it. Perhaps I should go ahead with my IFA whom I’m meeting on Monday, as must admit I am not really au fait with everything that is involved sorting out investment, tax, CGT etc.

bigadaj

Laineyrose said:

bowlhead99
Thank you for your response to my dilemma, missed it at first as didn’t realise your message was on the 2nd page. The information is very useful and in particular your thoughts on the costs involved with my IFA.  I was just a bit worried as I’ve never had this amount of money in my whole life (bless my mum for leaving us the bungalow which my brother and I benefit from), but since I have received this money I wanted to make the most of it. Perhaps I should go ahead with my IFA whom I’m meeting on Monday, as must admit I am not really au fait with everything that is involved sorting out investment, tax, CGT etc.

Why don't you wait and have a think about it. Do some reading up and the investment process isn't that difficult, try some online questionnaires to assess or confirm your risk level and work from that into suitable investments. £1k is a lot of money to you, and a significant sum compared to the amount to invest, but not a huge sum to an advisor who might be charging an hourly rate of £150-£200 or more. A difficulty is that for the last 10 years or more, since the last recession at the gfc, returns have been very extreme based on risk. Higher risk mainstream investments have typically done very well, but lower risk safe havens have been flooded with money with very low returns. So if you do have a low risk attitude then investing may give you little por no net return after fees and charges in which case something like ns&i might suit you.    

Laineyrose

bigadaj
Thank you for this, I think you’re right I do need more time to think about things and will look into NS&Is and try and learn more about investing the money myself.  You have been very helpful and is much appreciated.