Tackling Wonky Drawdown Portfolio

NottinghamKnight

Aged said:

Thrugelmir said:

Why not just switch to a single multi asset passive fund? Start afresh. Tinkering here and there is unlikely to result in a balanced portfolio. 

Talked about this recently in another thread - with the size of the portfolio, I wouldn't be happy with an 'all eggs in one basket' scenario. 

It's certainly a view, the problem is you don't appear to understand you have far more eggs concentrated in a smaller basket with what you have currently than if you picked a single global tracker or managed fund. You don't appear to have the confidence or experience to do the work to manage your own portfolio so probably need to find another IFA. 

Aged

NottinghamKnight said:

Aged said:

Thrugelmir said:

Why not just switch to a single multi asset passive fund? Start afresh. Tinkering here and there is unlikely to result in a balanced portfolio. 

Talked about this recently in another thread - with the size of the portfolio, I wouldn't be happy with an 'all eggs in one basket' scenario. 

It's certainly a view, the problem is you don't appear to understand you have far more eggs concentrated in a smaller basket with what you have currently than if you picked a single global tracker or managed fund. You don't appear to have the confidence or experience to do the work to manage your own portfolio so probably need to find another IFA. 

'I don't understand'? Rather patronising! 

Malthusian

Aged said:

Thrugelmir said:

Why not just switch to a single multi asset passive fund? Start afresh. Tinkering here and there is unlikely to result in a balanced portfolio. 

Talked about this recently in another thread - with the size of the portfolio, I wouldn't be happy with an 'all eggs in one basket' scenario. 

"Multi-asset passive funds" of the kind discussed here (Vanguard LifeStrategy, L&G Multi-Index, Blackrock Consensus, etc etc etc) are not "all eggs in one basket". They are invested across thousands of companies all over the world, i.e. thousands of baskets.

Hiring more farmhands to look after the same number of baskets doesn't improve diversification.

JohnWinder

Indeed those extra farmhands don't increase the diversification of the stock or bond holdings, but they do diversify so that if one farmhand is sick.....

It doesn't seem common for people to diversify the risk of having all their investments with one management company, or one platform, or one custodian, or one broker or whatever else. But IT systems fall over for a day or two just when you'd like to access them, or they get hacked or whatever. The risks are small, and I'm not convinced it's worth diversifying these risks, but it's not madness to consider tham.

Aged

To illustrate, say you had £850,000 to invest. You could put the whole £850,000 into one 'multi-asset passive fund', or you could put £85,000 into ten separate funds with different fund houses. It's my personal preference to do the latter. 

Albermarle

Aged said:

To illustrate, say you had £850,000 to invest. You could put the whole £850,000 into one 'multi-asset passive fund', or you could put £85,000 into ten separate funds with different fund houses. It's my personal preference to do the latter. 

From reading many threads on this forum , people with that amount of funds to invest , tend to have it split across two or maybe three providers and probably more fund houses . So not all eggs in one basket but not spread around too much as it is easier to manage .
One possible solution for you is to go to an insurer with your pension . An insurer in this context means a traditional large pension provider like Aviva, Standard Life , Scottish widows, Prudential etc . As long as you use their own insured funds , you have unlimited compensation cover . The downside is that you are of course limited to their offerings, and you will probably pay more in charges , although you should get a decent discount for that amount.
As well as their own funds they also have rebadged funds that widens the choice. A poster more knowledgeable than me, has commented previously that it is a grey area whether these funds are fully protected because it has never been tested. 

NottinghamKnight

Aged said:

NottinghamKnight said:

Aged said:

Thrugelmir said:

Why not just switch to a single multi asset passive fund? Start afresh. Tinkering here and there is unlikely to result in a balanced portfolio. 

Talked about this recently in another thread - with the size of the portfolio, I wouldn't be happy with an 'all eggs in one basket' scenario. 

It's certainly a view, the problem is you don't appear to understand you have far more eggs concentrated in a smaller basket with what you have currently than if you picked a single global tracker or managed fund. You don't appear to have the confidence or experience to do the work to manage your own portfolio so probably need to find another IFA. 

'I don't understand'? Rather patronising! 

Apologies if that came across as critical but it was my opinion as stated. It might be helpful if you confirmed what your fears about the one basket are, is that the management group or platform might fail (possible but very very small risk with major providers) or that you think there is more diversification if you have more funds. The latter is evidently not the case as a single world tracker would have far more diversification than your current range of funds as what you have currently is so UK focused, which represents circa 4% of the world market. 

Aged

Albermarle said:

Aged said:

To illustrate, say you had £850,000 to invest. You could put the whole £850,000 into one 'multi-asset passive fund', or you could put £85,000 into ten separate funds with different fund houses. It's my personal preference to do the latter. 

From reading many threads on this forum , people with that amount of funds to invest , tend to have it split across two or maybe three providers and probably more fund houses . So not all eggs in one basket but not spread around too much as it is easier to manage .
One possible solution for you is to go to an insurer with your pension . An insurer in this context means a traditional large pension provider like Aviva, Standard Life , Scottish widows, Prudential etc . As long as you use their own insured funds , you have unlimited compensation cover . The downside is that you are of course limited to their offerings, and you will probably pay more in charges , although you should get a decent discount for that amount.
As well as their own funds they also have rebadged funds that widens the choice. A poster more knowledgeable than me, has commented previously that it is a grey area whether these funds are fully protected because it has never been tested. 

Hi Albermarle and thanks for replying. I only used the £85K example in the hope that it might help the penny drop for those that don't 'get it'. I would have no problem with reducing the number of funds, and may well do that once I'm in a position to move platforms and do a complete re-jig (not an option at the moment due to suspended funds).
It's interesting what you say about going to an insurer. These pensions were inherited from my late husband, and they were originally held with one of the providers you mention. When he received his terminal diagnosis, a financial adviser recommended that it was best to transfer them out of there, and they subsequently sat in cash on another platform for the best part of a year before I consulted another adviser and they were transferred to the platform they are on now. 

Albermarle

It can be that his pension was quite old and therefore probably quite inflexible and maybe with high charges , so transferring an old pension can usually be beneficial. However the insurers themselves offer lower cost modern pensions as well .