Wealth Manager costs

MaxiRobriguez

StKi1da said:

dunstonh said:

Do you have the knowledge and understanding to build your own portfolio?  Why would you restrict yourself to Vanguard (they are not the best in every area)?    Portfolio weightings are not static and would need adjusting.  Are you going to keep doing that or get bored and not bother? 

Thanks for the reply and the excellent questions which has helped me think further. This is my exact dilemma really. I can research and make reasonable choices, but a professional I am sure would be more confident at this 

Confidence doesn't equal capability. 

You seem relatively screwed on by asking these questions and considering your options so I don't think it's a far jump for you to work out your own needs and make sensible investment choices based on those.

Just do a bit of research online about your options, risk tolerance, risk reward, passive investing... tonnes of support here. Spend a week or two reading up on things and considering your options and then you'll avoid paying thousands of YOUR money over investing lifetime to someone who is more than likely to give you the same advice you'd give yourself.

If you're still unsure after a few weeks, then go seen an IFA. 

thegentleway

One of the IFAs we spoke to charged a flat fee of £750 for investment plan. You can then pay them to implement it (and/or ongoing management) or DIY, which would give you some confidence that you're not doing anything too reckless with the money.

Sebo027

StKi1da said:

Very fortunate to have come into a substantial (for me) amount of money via an inheritance. Had a discussion with a couple of "Wealth Managers" where the cost averages out at 2.6% per year (including fund costs).  Within that I get all required advice around pension planning as well as investment planning and fund management etc.  
So that means 2.6k per 100k invested gores in charges per year (regardless of performance) or put another way 26% of a 10% annual profit goes to them.
My feeling is that, while they "might" outperform the market by 2.6% - it seems to be a service I cannot afford.  It's not until the investment portfolio gets pretty large that the % fees drops to something acceptable as compared to the fund values.
It does seem I would be better to create a balanced portfolio via Vanguard or similar myself and spot buy advice on pension planning every few years.
Am I missing something?

What was the IFA cost (%) and what was the fund cost (%)? 

Happymonday

I recently spoke to Tideaway.  They no longer do DB transfers but now class themselves more as a wealth management organisation and charge 1.75% (including fund mgt costs) using AJ Bell platform.

Prism

Happymonday said:

I recently spoke to Tideaway.  They no longer do DB transfers but now class themselves more as a wealth management organisation and charge 1.75% (including fund mgt costs) using AJ Bell platform.

It seems about ballpark for someone to managed your funds for you. The important charge, the bit that Tideaway keep is the 0.75%. I pay roughly the same amount to use AJ Bell Youinvest minus that fee, but I need to make the management choices myself. 

Cus

Looks like they use AJ Bell Investcentre.  Cheaper than AJ Bell You invest but I think retail customers are not allowed.  

2.6% all in with them versus 0.3% all in on a DIY platform using index trackers, or whatever it costs to stick it all in a vanguard lifestyle fund is worth the extra if they can beat what you can do. 

If it means anything, I pay approx 2.4% for a IFA plus DFM plus platform plus transaction fees etc etc and after 3 years they are beating my chosen comparisons by around 9%.  If they weren't then I would have moved/gone DIY.

bigadaj

Cus said:

Looks like they use AJ Bell Investcentre.  Cheaper than AJ Bell You invest but I think retail customers are not allowed.  

2.6% all in with them versus 0.3% all in on a DIY platform using index trackers, or whatever it costs to stick it all in a vanguard lifestyle fund is worth the extra if they can beat what you can do. 

If it means anything, I pay approx 2.4% for a IFA plus DFM plus platform plus transaction fees etc etc and after 3 years they are beating my chosen comparisons by around 9%.  If they weren't then I would have moved/gone DIY.

What is your benchmark?

Cus

A few,  I look for what I would likely do if I was DIY.  So a combination of vanguard 60/40, 80/20, a couple of the fidelity equivalents, and others. Also do a check against a few MSCI indices just to compare.  I try to match against my current portfolio but that's a moving beast to a degree.

bigadaj

Cus said:

A few,  I look for what I would likely do if I was DIY.  So a combination of vanguard 60/40, 80/20, a couple of the fidelity equivalents, and others. Also do a check against a few MSCI indices just to compare.  I try to match against my current portfolio but that's a moving beast to a degree.

So have they beaten them all by 9% or a particular one and does that match the equivalent risk profile. 

Prism

bigadaj said:

Cus said:

A few,  I look for what I would likely do if I was DIY.  So a combination of vanguard 60/40, 80/20, a couple of the fidelity equivalents, and others. Also do a check against a few MSCI indices just to compare.  I try to match against my current portfolio but that's a moving beast to a degree.

So have they beaten them all by 9% or a particular one and does that match the equivalent risk profile. 

It wouldn't surprise me. The VLS range has performed pretty badly over the last three years or so. VLS 100, 80 and 60 have been annualising at around 5% which hasn't been too difficult to beat.