Wealth management performance and charges

JonathanGavin

Thanks for your advice.
The research i have done has highlighted that HL are well rated and have won awards within the industry, so I think you're probably doing the right thing. 
The only thing I have read is that they are not the cheapest, however, no where near as expensive as SJP.

Thrugelmir

JonathanGavin said:

I think they should do better??

That depends on the remit you've given them. We can all invest with hindsight and say if only......... 

dunstonh

 and have won awards within the industry, so I think you're probably doing the right thing. 

Never buy on the basis of awards.     Financial services awards are handed out like candy.    Staff voting for their own company.  Advertisers favouring companies that advertise with them.    Some really poor quality products and providers have won awards over the years.

The only thing I have read is that they are not the cheapest, however, no where near as expensive as SJP.

Actually, they can be more expensive.  HL's platform charge is just one part of it.  You need to add the investment charges on top.   Plus, there is no adviser charge as HL are not advising you.

jamesperrett

Some of my family were sucked into investing with SJP (their salesmen are very slick). They were actually perfectly happy with their returns but to me they seemed to create a very complex portfolio which seemed more intended to confuse than to serve the customer. I tracked it on Trustnet and it seemed to grow at about the same rate as Vanguard Life Strategy 40 on an offer to offer basis but, if you took into account the bid to offer spread that SJP incorporate, it did much worse.

Plenty of people around here seem to like investing directly in the VLS funds which have far lower charges than SJP.

jimjames

JonathanGavin said:

I've been letting them manage it as I've been too busy.
They advise every Yr, what to alter and where they think I should invest.
Returns go up and down,  but on average that's my return.
I think they should do better??

If they're chopping and changing every year then that will come with costs. A good portfolio might need rebalancing but it shouldn't be a case of looking where to invest differently each year. 
If you buy the right multi asset funds then there isn't really any management needed.

GeoffTF

OldMusicGuy said:

JonathanGavin said:

Any advice on where I might get better returns, or is this reasonable.

However, I did make the mistake of having too low risk a portfolio when I was younger, and that's when I should have been going for growth.

You may be being too hard on yourself there. With hindsight, you know that the worst did not happen, but it could have done.

Thrugelmir

Worth noting that even Vanguard are moving into the advisor sector of the market with their professional range. In effect returning to their roots. 

JonathanGavin

Interesting, thankyou. 

Albermarle

JonathanGavin said:

Interesting, thankyou. 

You need to be clear on the structure of how these things normally work .

If you DIY your investments, like many on this forum . You join an 'investment platform' - Hargreaves Lansdown being one example. They charge a % fee of the money you have invested on the platform. You have to choose which investments to buy and there is a charge for each investment. So just as an example you could be paying 0.35% for the platform and 0.45% on average for the investments = 0.8% in total.( will vary a lot between different investors )

If you employ an IFA , they may get slightly cheaper prices for the platforms and funds , but they have their own charge of say 0.7% , so maybe in total 1.3%

With a company like SJP - it is similar except all their charges will be a bit more adding up to say 1.8% or even 2% ( just a guess ) . Also they are tied to using their own funds and they lock new customers in for long periods.

These higher charges reduce the return and will have the most effect proportionally on a low risk/return portfolio.

On another point , investment returns are best looked at after inflation to see the real growth . In your case that is going to be approx zero . I would have thought that even for a low/medium risk strategy , real growth over 5 years should have been a minimum 10%

JonathanGavin

Thankyou Albemarle. 
This is all very informative. 
Much appreciated everyone.