Wealth at Work - financial advice

MIZZ12

Hi, I was wondering on whether anyone has any views on using Wealth at Work for their Discretionary Fund Management services?  Had an initial conversation with one of their advisors and all seemed ok but when I asked him about the costs involved he told me that it was 1.5% all in - even when I checked to see if there were any other costs involved with the service he again mentioned the 1.5%.  Now when I look at the literature he emailed to me, I see that the annual charges are actually up to 1.5% +VAT; but he never mentioned VAT to me.  Also, there appear to be initial set up charges of 2%+VAT for the first £100k invested.  So am I being overly worried by the fact that he didn't mention either the VAT on the annual management charges, or the initial set up charges? - just feels like he wasn't being completely transparent, and that was just my initial conversation!  Please could I have your insights on this and on DFMs in general as a bit of a newbie with regards to DFM's?   Thank you.

OldMusicGuy

The general advice on here is to avoid DFMs and the like because, as you have found out, they tend to be expensive. If you want help and cannot manage your own portfolio, the advice on here is to seek out a genuinely independent financial adviser. IFAs will mostly be cheaper than this and likely have access to more investment choices. One of the IFAs on here will probably be along soon to tell you the typical charges you could expect from an IFA. 

barnstar2077

Where is your money held at the moment?  What size pot do you have?  What do you want to achieve?

MIZZ12

Thanks for the replies so far - yes I thought it sounded expensive but I would like some guidance on investment strategies which also takes into account the tax planning aspect along with how my portfolio should shift along with my requirements/ risk profile as I get older.  Perhaps an IFA would be a better route than what sounds like a relatively expensive DFM investment solution - but do they basically offer the same things under different marketing tactics?  I already have funds with HL and recently used my S&S ISA allowance on iweb platform, but have a largeish pool of money currently not doing much of c. £150k - looking for medium to long term home (am 50 yrs old) for it to get decent returns to at least prevent erosion from inflation at worst; and mostly looking for capital growth. 
 Thank you.

Linton

MIZZ12 said:

Thanks for the replies so far - yes I thought it sounded expensive but I would like some guidance on investment strategies which also takes into account the tax planning aspect along with how my portfolio should shift along with my requirements/ risk profile as I get older.  Perhaps an IFA would be a better route than what sounds like a relatively expensive DFM investment solution - but do they basically offer the same things under different marketing tactics?  I already have funds with HL and recently used my S&S ISA allowance on iweb platform, but have a largeish pool of money currently not doing much of c. £150k - looking for medium to long term home (am 50 yrs old) for it to get decent returns to at least prevent erosion from inflation at worst; and mostly looking for capital growth. 
 Thank you.

Yes - Advice on strategies, tax, risk, objectives and meeting them is normal work for a small local IFA. Avoid the large national companies with plush offices, glossy brochures and expensively dressed executives.

dunstonh

Now when I look at the literature he emailed to me, I see that the annual charges are actually up to 1.5% +VAT; but he never mentioned VAT to me

Adviser charge, platform charge and fund charges are not Vatable.  The DFM charge is.

 Also, there appear to be initial set up charges of 2%+VAT for the first £100k invested.  

There should not be VAT on that.    Intermediary services with the intention to purchase a product (but you dont have to follow through - it is the intention that matters) is non-vatable.

 Please could I have your insights on this and on DFMs in general as a bit of a newbie with regards to DFM's?  

DFMs add a layer of charges that in most cases offers no value for money.  There are a few exceptions where it could be suitable but its expensive and pointless most of the time.

garmeg

dunstonh said:

Now when I look at the literature he emailed to me, I see that the annual charges are actually up to 1.5% +VAT; but he never mentioned VAT to me

Adviser charge, platform charge and fund charges are not Vatable.  The DFM charge is.

 Also, there appear to be initial set up charges of 2%+VAT for the first £100k invested.  

There should not be VAT on that.    Intermediary services with the intention to purchase a product (but you dont have to follow through - it is the intention that matters) is non-vatable.

 Please could I have your insights on this and on DFMs in general as a bit of a newbie with regards to DFM's?  

DFMs add a layer of charges that in most cases offers no value for money.  There are a few exceptions where it could be suitable but its expensive and pointless most of the time.

VAT on everything ...

Cus

VAT is applied for DFM's.  I have used a DFM for a few years, and am happy with them so far.  However 1.5% plus vat is probably at least 0.5% too high in my opinion.
If you go this route, I would recommend identifying what your benchmark is to be able to see if they are beating it after all fees are taken in to account. And I don't mean necessarily mean the benchmark they provide, I mean a realistic benchmark based on what you would invest in if you did it DIY.  And make sure both have the same risk profile.  In essence are they doing better than you could..
I would also investigate what access they have to funds that are not available to retail investors, do they invest in individual shares for you, what bulk discounts they get from trading fees, do they speak directly with the fund managers etc.

Albermarle

Linton said:

MIZZ12 said:

Thanks for the replies so far - yes I thought it sounded expensive but I would like some guidance on investment strategies which also takes into account the tax planning aspect along with how my portfolio should shift along with my requirements/ risk profile as I get older.  Perhaps an IFA would be a better route than what sounds like a relatively expensive DFM investment solution - but do they basically offer the same things under different marketing tactics?  I already have funds with HL and recently used my S&S ISA allowance on iweb platform, but have a largeish pool of money currently not doing much of c. £150k - looking for medium to long term home (am 50 yrs old) for it to get decent returns to at least prevent erosion from inflation at worst; and mostly looking for capital growth. 
 Thank you.

Yes - Advice on strategies, tax, risk, objectives and meeting them is normal work for a small local IFA. Avoid the large national companies with plush offices, glossy brochures and expensively dressed executives.

Plus the local IFA could  give you more general advice on family financial matters, not just on your investments .

MIZZ12

As can be seen from garmeg's post (thankyou!), there is VAT on all their charges.  Am I right to be concerned that the advisor did not mention these to me, nor did he mention anything about the initial set up charges when I asked him in our preliminary conversation about charges.  If someone tells me that the charge will be 1.5% which includes everything, then I don't expect to then find out from their website/literature about the VAT on top plus the additional Set up charge.  Does this sound transparent to you?

Albermarle

Does this sound transparent to you?
No , but probably the sort of thing you would expect with these types of advisor/salesman.