50-50 - sensible compromise or bonkers fudge?

Avoirdupois

So, since I've been reading the book I bought a few weeks ago (Invest Your Way To Financial Freedom, by Carlson & Powell) I remain unable to decide whether to pitch in with an IFA or else go DIY.  As I sit here musign on the subject, prior to visiting a prospective third-party, I wondered whether the following solution would make sense: Let's say I have £500,000 in cash assets.  How about I split that lump sum in two and give half to the chosen professional to invest and manage and invest the other half in products I choose myself and buy via one of the on-line platforms like YouInvest or iWeb.  What are the pros and cons?  At the very least, I would be able to compare the performance of the two sides.

eskbanker

Bonkers fudge.

The idea of engaging an IFA is to help you identify your objectives (plus timescales, risk tolerance, etc) and then find the most appropriate method of achieving these, not to try to spot the investments that give the highest returns, so your whole premise of comparing performance is flawed!

Edit: as pointed out last month: https://forums.moneysavingexpert.com/discussion/comment/78856196/#Comment_78856196

So, either DIY or IFA, but not both....

Thrugelmir

Bonkers fudge.

quirkydeptless

https://www.youtube.com/watch?v=ISy0Hl0SBfg

https://www.youtube.com/watch?v=PmrlqVibv2I

Albermarle

At the very least, I would be able to compare the performance of the two sides.

To get any kind of sensible comparison, you would need to go through at least one market cycle , preferably a couple . So you would not get a reliable answer for at least ten years.

Even then both portfolios would have to be correctly matched to your risk profile, objectives etc. to start with .

ChilliBob

Hmm, I have a different perspective. An IFA I was considering using said that I could test the waters so to speak with say 1/4 or 1/3 of the amount I intended with him, then do the rest if I felt comfortable. The whole time there was this idea that I *could* have a pot myself if I so desired.

If I went down the IFA route this wouldn't be 50:50, probably more like 90:10 (the 10 bit me!)

It depends on your objectives, in my case this would have been an ISA for me to meddle with really, probably ending up being to my detriment, but to satisfy the 'naughty active' small part of me.

So yeah, 50:50, nope, you're paying for someone to do stuff for you then having to do lots yourself.

Out of interest what's making you want to or not? (As this was something I considered, and if I'm honest, I haven't 100% ruled out) 

dunstonh

I have a few clients that have part DIY and part advised.  However, the DIY part tends to more along the lines of play money at higher risk rather than the core portfolio.    Often you find they get bored with investing as they realise its not actually fun and find better things to do with their time and move it back into the core portfolio.

With £500k, you have multiple tax wrappers and annual CGT allowance use.  Possible use of offshore bond.    So, a mix and match at  50/50 just create extra work and who gets to use which wrappers and when.