440K investment dilemma

Scallypud

Looking for some advice with my 440K pension pot on whether to use a financial adviser or invest the money myself.

I am considering using a financial adviser to invest my money with an annual charge of 1.4%.

Another option i am considering is investing in the ready made portfolio's ( Hardgreaves Lansdown ) that have a low fees.

I have invested 10K in these ready made portfolio's before and got a return of 10%.

So here is my dilemma . Would i be better off using a financial adviser?

Thanks in advance for your responses.

pip895

Possibly possibly not    I would suggest there are cheaper alternatives than HL.  Are you willing to spend some time and educate yourself on investments?  If so you can save as much as 1% on the charges you have mentioned.  

Scallypud

I don't think i could trust myself to invest in stocks and shares. I know that is why we use financial advisers as they should guide us in the right direction.
However i been reading up on financial advisers and the common thyme is that you can be better off doing it yourself. Hence that is i thought the ready made portfolio's would work better financially

Scallypud

pip895 said:

Possibly possibly not    I would suggest there are cheaper alternatives than HL.  Are you willing to spend some time and educate yourself on investments?  If so you can save as much as 1% on the charges you have mentioned.  

What other providers recommend 

MaxiRobriguez

Scallypud said:

I don't think i could trust myself to invest in stocks and shares. I know that is why we use financial advisers as they should guide us in the right direction.
However i been reading up on financial advisers and the common thyme is that you can be better off doing it yourself. Hence that is i thought the ready made portfolio's would work better financially

You'll get the most out of an IFA not from them choosing your investments, but from them correctly analysing your risk tolerance, coaching you to make consistent good decisions when emotions get high etc.

It's absolutely able to self-teach, but takes a lot of time and a lot of self introspection. If you don't want to, or don't feel you can, your current plan has it costing you £6,000 a year for the rest of your life. You should be able to find cheaper IFA's but you're still talking over many years a significant outlay.

Scallypud

MaxiRobriguez said:

It's absolutely able to self-teach, but takes a lot of time and a lot of self introspection. If you don't want to, or don't feel you can, your current plan has it costing you £6,000 a year for the rest of your life. You should be able to find cheaper IFA's but you're still talking over many years a significant outlay.

Is there any fast track courses you know about that i can learn about investing in the stock market

kuratowski

Scallypud said:

However i been reading up on financial advisers and the common thyme is that you can be better off doing it yourself.

You can be better off doing it yourself, but you can also make a fine mess of it and make yourself worse off!  If you stick to the ready made portfolios by the likes of Hargreaves Lansdown, you'll probably end up somewhere in between.  The trouble with a ready made portfolio is that it's static*, over time the markets will move and your asset allocation will drift away from what it was originally.  So even if the ready made portfolio was suitable to begin with (which is not guaranteed) it won't remain so as time passes.

Option 1: Find an IFA and they will recommend a suitable portfolio and keep track of it over time so it remains suitable.  The "I" stands for independent, and it means they'll offer you products from the whole market - this is what distinguishes an IFA from a FA; the latter is tied to one particular product range.  For finding an IFA, look at https://adviserbook.co.uk/ and tick "confirmed independent" on the second page.

Option 2: Do it yourself, by learning a bit more about the basics of investment.   Have a read of the "investing lessons" at https://monevator.com.  To being with, while you are learning, start with one or more multi-asset funds.  These are the "one stop shop" of investing, they each constitute a self-balancing diversified portfolio in their own right, so all you have to do is to choose one.  In particular, refer to the comparison table here https://monevator.com/passive-fund-of-funds-the-rivals/

* For avoidance of doubt, this comment refers to the 'master portfolios' that HL offer on the ready made portfolios section of their website, not their branded managed funds nor their advice offering.

dunstonh

Another option i am considering is investing in the ready made portfolio's ( Hardgreaves Lansdown ) that have a low fees.

We have had several clients move from these to use as an IFA and the HL portfolios were more expensive.  Are you sure that are cheaper?
edit:  I just checked online at the ready made balanced growth in the SIPP and it is more expensive. (0.45% platform charge plus 1.4% OCF = total of 1.8%.      Similar risk IFA one 1.06%.) 

You would have to use a very expensive IFA or FA /Wealth manager to come in at higher cost than what you are looking at (and there are plenty of expensive ones)

However i been reading up on financial advisers and the common thyme is that you can be better off doing it yourself. 

Far too simplistic and plain wrong.  If you DIY well then you can.  If you DIY badly then you can make a right pigs ear of it.   

Hence that is i thought the ready made portfolio's would work better financially

With these, you are typically paying close to advice level costs anyway but without the advice.   Just their fund selection.  These are like a half way house but either the real benefits of either.   Not a bad option for smaller investors though.

JohnWinder

Use a financial advisor or not, here are several related short videos covering what's relevant to what you need to know.

https://www.bogleheads.org/wiki/Video:Bogleheads®_investment_philosophy

cfw1994

Scallypud said:

Looking for some advice with my 440K pension pot on whether to use a financial adviser or invest the money myself.

I am considering using a financial adviser to invest my money with an annual charge of 1.4%.

Another option i am considering is investing in the ready made portfolio's ( Hardgreaves Lansdown ) that have a low fees.

I have invested 10K in these ready made portfolio's before and got a return of 10%.

So here is my dilemma . Would i be better off using a financial adviser?

Thanks in advance for your responses.

What is this pot invested in today?  How did it get there?

You sound a little nervous regarding managing this….
If that pot magically appeared without up your help in choosing funds: why not ‘interview’ 3 IFAs and have a discussion with them?
On that size of pot, I would expect your TOTAL costs to come in below 1.4% (based largely on dunstonh’s posts!).

Albermarle

I don't think i could trust myself to invest in stocks and shares

What do you think the HL ready made portfolio is invested in ?

Most of the DIY investors on this forum do not own any individual shares or bonds etc, or if they do it will only be a smallish part of their portfolio.

They have investments that includes lots of shares and bonds and other things . Similar in make up to the HL ready made portfolios but a lot lower cost . 

However there different opinions on the exact make up of the portfolio and it depends on your age, risk tolerance, personal preference etc 

The simplest option is a low cost multi asset fund , that will do a similar job to the HL ready made portfolio , but with a cost around 0.2% instead of 1.4%.

Here are some examples in a comparison chart .

Fund-of-funds: the rivals - Monevator

You can buy all of them on the HL platform or on many other cheaper platforms.