Self managing my investments

Thrugelmir

mistapike said:

I have been managing about £150k "savings" in Stocks and Shares ISA's (using Hargreaves Lansdown) for about 7 years, having known nothing in this area before then - so now consider myself reasonably informed in the world of self managing my investments, but undoubtedly still with more to learn.

Seven years is a short period of time. You've much to experience yet. 

Albermarle

one of the reasons for this thread is two of my ex colleagues have taken CETV transfers promoted by the same people who then take on the wealth management which I am suspicious of  

Couple of points worth mentioning 

DB transfers seem to have got more difficult recently , so yours might not be as smooth as your colleagues were . Now you really need to show that it is in your best interest as the default position is firmly that it is not.

You might find that if you do not take the 'wealth management route ' the DB transfer process will become more problematic, if it is all handled by the same people. 

You can probably look at the two points in tandem .

DT2001

On this forum there are quite a few well read, very intelligent DIYers. The level of knowledge that they show actually assures me that I took the correct decision to use an IFA. My initial investment was £180k and I managed to negotiate a 0.5% p.a. fee. The key for me is ensuring that I have the right strategy in place to achieve my retirement goals.
Previously I had invested in single shares, new issues, options, unit trusts etc but without a particular plan so when I needed advice after the sale of a business I turned to an IFA. As some have suggested I could have just paid for a one off rather than ongoing service however I do like the service/advice that I get and believe it is value for money. I’ve saved money as a result of being informed about options I hadn’t considered. In addition other family members with smaller pots have obtained the same lower annual fee.
Almost 7 years down the line and I am ahead of where I wanted to be.

I see the attraction of the likes of Vanguard but I do not know when we’ll fully retire or what our income will be next year so I prefer a different approach.

mistapike

Thanks Boston - the question on your fund wasn't from me, was from Jim .  

Just to add some more detail as it seems I need to for a variety of reasons - on top of the pension I refer to in the original post, I have two other DB pensions, and my wife also has two DB pensions (and we also both qualify for full state pension). These all added together provide pretty much the guaranteed index linked income we need when we both reach 67. We can take a partial CETV on the Pension mentioned in the original post, which is under consideration - ergo we end up either (a) having guaranteed index linked income to meet our needs (about £40k net pa) plus a pot of about £400k to invest from a partial CETV, or (b) drop the guaranteed income to £34k but have a full CETV that gives about £600k to invest. i.e. of the 5 DB pensions between us, the only one we are looking at taking the CETV on is a 17.5k pa DB pension payable @60 with a CETV offer of 620k= roughly x35 - partial CETV (66%) would leave about 6k pa in the DB pension with about £400k CETV transfer.

There is plenty of slack to cover drawdown in the above scenarios unless inflation is rampantly higher by several percent over stock market returns for an extended period of years

I really do appreciate everyone taking the time to offer advice, but please rest assured I am working through my pension/CETV options with a qualified financial advisor, but fully expect to take forward the partial or full CETV - and part of the final decision is to consider the long term investment strategy which is where I wanted advice - cheers

       

Albermarle

mistapike said:

Thanks Boston - the question on your fund wasn't from me, was from Jim .  

Just to add some more detail as it seems I need to for a variety of reasons - on top of the pension I refer to in the original post, I have two other DB pensions, and my wife also has two DB pensions (and we also both qualify for full state pension). These all added together provide pretty much the guaranteed index linked income we need when we both reach 67. We can take a partial CETV on the Pension mentioned in the original post, which is under consideration - ergo we end up either (a) having guaranteed index linked income to meet our needs (about £40k net pa) plus a pot of about £400k to invest from a partial CETV, or (b) drop the guaranteed income to £34k but have a full CETV that gives about £600k to invest. i.e. of the 5 DB pensions between us, the only one we are looking at taking the CETV on is a 17.5k pa DB pension payable @60 with a CETV offer of 620k= roughly x35 - partial CETV (66%) would leave about 6k pa in the DB pension with about £400k CETV transfer.

There is plenty of slack to cover drawdown in the above scenarios unless inflation is rampantly higher by several percent over stock market returns for an extended period of years

I really do appreciate everyone taking the time to offer advice, but please rest assured I am working through my pension/CETV options with a qualified financial advisor, but fully expect to take forward the partial or full CETV - and part of the final decision is to consider the long term investment strategy which is where I wanted advice - cheers

       

Thanks for the details that puts the situation in a better perspective . Just to be clear you will not get 'advice' from an internet forum. In the world of personal finance , advice is a highly regulated activity that you pay for and is tightly controlled in the way it is given. Plus you can later claim compensation for bad advice . All you will get from this or any other forum is opinion from people who do not know you or your full circumstances 

Having said that I  think avoiding the wealth manager is an obvious one . This leaves the two options of DIY or an IFA .
In either case  , then critical issues are your objectives ( large retirement income or leaving a large legacy for example ) and your risk tolerance /need for growth .
Also with your two remaining DB pensions and the CETV , you are  maybe entering LTA territory. Has this been discussed with your advisor ? 

LV_426

I'm similarly trying to decide, and thinking strongly of consolidating my current DC pots into a Vanguard fund.
Will be speaking with an IFA soon, just to get some idea of how much that'll cost, but I'm averse to having someone skim off 1% of my fund year after year, if I can easily manage it myself.

cfw1994

mistapike said:

Hi everyone. Apologies if this is already covered in another thread (feel free to redirect me) but I am looking to retire in the next year (age 58), and via a DB CETV transfer will have something in the order of £600k to manage in investments - and I'm interested in understanding the choices people made about how much to self manage.

I have been managing about £150k "savings" in Stocks and Shares ISA's (using Hargreaves Lansdown) for about 7 years, having known nothing in this area before then - so now consider myself reasonably informed in the world of self managing my investments, but undoubtedly still with more to learn. My instinct is to self manage my investments, and I have an instinctive aversion to paying say 3% annual fee (on top of any other fees)  to a "wealth manager" type to manage my portfolio for me, who may be more informed/experienced than me but that would add up to a lot of lost money year on year.

Overall I am very strongly in the camp of "fire and forget" investment of long term growth through funds/ETF's, and in asking this question am happy therefore that my decision is which fund to pick, and then is always a fund manager making the stock decisions (with according fees)  -  or an index tracker.

In essence I would be interested on the choices anyone made in a similar position, and whether I am missing anything important...but it feels to me there are broadly 3 routes open to me
1 - Continue to self manage my investments (making my choices on funds) via a provider platform like HL, as I have been
2 - User a provider (e.g. Vanguard) who provide a range of set investment portfolios based on risk appetite, with seemingly low additional fees compared to 1
3 - Go full Wealth Manager with a tailored portfolio but with much higher charges than 1 or 2

I'm particularly interested in anyone who chose the "2" route instead of "1" (and any providers they thought offered best value) because the relatively low extra fees were worth the removal of the burden of self managing a large pot - and also on my view to want to disregard 3 ! 

Thanks     

You don't want people to dig more into the areas raised....and you say you are "reasonably informed in the world of self managing my investments, but undoubtedly still with more to learn".
To be informed needs to have a really solid reason to decline a guaranteed DB - that is why people are questioning it.  Your desire to not use the IFA to manage it beyond effectively ticking a box to say "yes, I recommend it" - I feel that is optimistic without dangling the carrot of them managing it for you. 

(ETA - I read the extra info you've added - useful, but I still suspect you may need to encourage the IFA by agreeing to have them manage the pot - until you have the positive paperwork in your hands, you ONLY have a DB pension there!!)

I broadly agree with "fire & forget" - the Lars Kroijer approach, really - worth taking time to watch his videos.   I also am a fan of self-management - as others have suggested, there is always a whiff of "who is the FA working to help" about financial advice, but I have been literally managing my DC pot for over 15 years, tweaking it from time to time.

Mine are with Aviva.  It is well worth getting into the detail of how your drawdown strategy would be put into effect - how long would it take to make changes, etc.   Aviva is reasonably fast to act, but by no means can changes be effected overnight!

Is there any risk of the LTA being hit, & if so, have you got a strategy for that?  
Are there IHT considerations?

zagfles

Albermarle said:

mistapike said:

Thanks Boston - the question on your fund wasn't from me, was from Jim .  

Just to add some more detail as it seems I need to for a variety of reasons - on top of the pension I refer to in the original post, I have two other DB pensions, and my wife also has two DB pensions (and we also both qualify for full state pension). These all added together provide pretty much the guaranteed index linked income we need when we both reach 67. We can take a partial CETV on the Pension mentioned in the original post, which is under consideration - ergo we end up either (a) having guaranteed index linked income to meet our needs (about £40k net pa) plus a pot of about £400k to invest from a partial CETV, or (b) drop the guaranteed income to £34k but have a full CETV that gives about £600k to invest. i.e. of the 5 DB pensions between us, the only one we are looking at taking the CETV on is a 17.5k pa DB pension payable @60 with a CETV offer of 620k= roughly x35 - partial CETV (66%) would leave about 6k pa in the DB pension with about £400k CETV transfer.

There is plenty of slack to cover drawdown in the above scenarios unless inflation is rampantly higher by several percent over stock market returns for an extended period of years

I really do appreciate everyone taking the time to offer advice, but please rest assured I am working through my pension/CETV options with a qualified financial advisor, but fully expect to take forward the partial or full CETV - and part of the final decision is to consider the long term investment strategy which is where I wanted advice - cheers

       

Thanks for the details that puts the situation in a better perspective . Just to be clear you will not get 'advice' from an internet forum. In the world of personal finance , advice is a highly regulated activity that you pay for and is tightly controlled in the way it is given. Plus you can later claim compensation for bad advice . All you will get from this or any other forum is opinion from people who do not know you or your full circumstances 

But lots of different perspectives.

Also with your two remaining DB pensions and the CETV , you are  maybe entering LTA territory. Has this been discussed with your advisor ? 

If it hasn't, the advisor needs sacking. The LTA was my immediate thought as well, transferring out a DB pension can create an LTA problem where there wasn't one before, since the LTA rules are much kinder to DB than to DC.

bostonerimus

mistapike said:

Thanks Boston - the question on your fund wasn't from me, was from Jim .  

Just to add some more detail as it seems I need to for a variety of reasons - on top of the pension I refer to in the original post, I have two other DB pensions, and my wife also has two DB pensions (and we also both qualify for full state pension). These all added together provide pretty much the guaranteed index linked income we need when we both reach 67. We can take a partial CETV on the Pension mentioned in the original post, which is under consideration - ergo we end up either (a) having guaranteed index linked income to meet our needs (about £40k net pa) plus a pot of about £400k to invest from a partial CETV, or (b) drop the guaranteed income to £34k but have a full CETV that gives about £600k to invest. i.e. of the 5 DB pensions between us, the only one we are looking at taking the CETV on is a 17.5k pa DB pension payable @60 with a CETV offer of 620k= roughly x35 - partial CETV (66%) would leave about 6k pa in the DB pension with about £400k CETV transfer.

There is plenty of slack to cover drawdown in the above scenarios unless inflation is rampantly higher by several percent over stock market returns for an extended period of years

I really do appreciate everyone taking the time to offer advice, but please rest assured I am working through my pension/CETV options with a qualified financial advisor, but fully expect to take forward the partial or full CETV - and part of the final decision is to consider the long term investment strategy which is where I wanted advice - cheers

       

In that case then go for the CETV and DIY.  Put a couple of years in cash to ride out market downward variability and live off dividends and a bit of capital until the pensions kick in. If you can live on 40k you can certainly live on 34k in bad times. 

I retired 3 years before my pension started and I just put 3 years of spending in the bank and I ended up not spending everything or having to top up from investments.

jim8888

I really quite enjoy managing my own investments and have found the advice on this forum to be a fantastic resource. I feel I have learned loads in the last six months since I retired, which put me in a position of finally having to access my investments. I only have one caveat - I do find the responsibility of trying to manage my portfolio quite intimidating. It's a lot of money for me and my family. What if I get it wrong? It's taken me a full six months and quite a lot of work on spreadsheets to arrive at a strategy on how best to take my retirement income, and I still worry that I'm not being prudent enough. Or that I'm being too prudent. It's a daily internal discourse to the point that if anyone asks me what I'm doing these days I'm going to tell them I'm a fund manager. I'll just not mention that it's my own funds I'm managing