Advice on True Potential LLP Investment Service

DoneWorking

masonic said:

DoneWorking said:

masonic said:

Malthusian said:

masonic said:

There's an appreciable difference between a real return of 4%, a nominal return of 4%, a maximum return of 4% and an average return of 4%. You should probably seek to clarify what was actually meant. My understanding is that you were going for a portfolio that was 50% equities and 50% consumer savings accounts, where the adviser would only be responsible for the equities part, so from their perspective it would be 100% equities. Has this changed?

I missed the thread where this was mentioned, but it is very unlikely that any UK regulated adviser would recommend that.

Cautious investors (and for that matter nearly everyone else) don't perceive a 40% stockmarket fall in a 50% equities / 50% consumer savings accounts as a 20% fall. They perceive it as losing 40% of their money, and sell their equities before they lose any more, to add to their 50% cash which is doing so much better.

People only take a holistic view when everything is going up.

I linked the previous update by the OP, given in his previous thread on the subject earlier on this page, but here it is again: https://forums.moneysavingexpert.com/discussion/comment/79161938/#Comment_79161938

There's been a series of threads chronicling the journey to that point. The savings ladder plus global tracker portfolio seems to have been suggested in another of the OP's threads on this topic and favoured over multi-asset DIY/multi-asset advised/robo. There have been several threads running in parallel, so not always easy to follow along with the current thinking. Prior to this thread being started, it seemed the 50:50 portfolio had been decided upon and the IFA was on board, but as you can probably see, I have a question for the OP in relation to this. It is possible the IFA has only agreed to advise on the 50% of assets as if they were the only assets under consideration, so not to take the 50% cash as a bonds proxy. OP does not want to include bonds in the portfolio (discussed in another of the threads), so that would have been a non-starter I believe, and perhaps goes some way to explaining how this new thread appears to be back at square one.

The IFA had based his figure of 4% based on him using 50 % of my funds

This was after costs 

"The  4% would only be on the funds held in the ESG Cautious portfolio.This isn’t guaranteed, and it could be more or less than this."

I would be using the other 50% to try and attain an overall return of about 2%

I haven't moved ahead on this as yet as I am just making some last minute checks to ensure I have covered all options before I make a final decision

Ok, so you are going to be super cautious overall with 50% in cash. I think the average return of 4% on the other 50% (after costs of 1.2%) sounds optimistic for a cautious portfolio! Don't expect that in the early years.

I'm still thinking about it

My cash should get 2%
But need to factor in tax

The 4% return on investment is not guaranteed and of course there could be a loss in early days due to volatility

It's not an appealing prospect

To be frank I'm going round in circles and getting nowhere

This is why I was looking for advice on Vanguard style investments

Plus info on True Potential

eskbanker

DoneWorking said:

To be frank I'm going round in circles and getting nowhere

This is why I was looking for advice on Vanguard style investments

Perhaps already covered in one of the threads but 'Vanguard style investments' isn't really a thing!  They offer many types of investment, including multi-asset funds and trackers in ETF and OEIC form, but these aren't really associated specifically with Vanguard as such, so that's a bit like saying you're looking for a Ford-style car when you're actually specifically after, say, a hatchback....

masonic

DoneWorking said:

masonic said:

DoneWorking said:

masonic said:

Malthusian said:

masonic said:

There's an appreciable difference between a real return of 4%, a nominal return of 4%, a maximum return of 4% and an average return of 4%. You should probably seek to clarify what was actually meant. My understanding is that you were going for a portfolio that was 50% equities and 50% consumer savings accounts, where the adviser would only be responsible for the equities part, so from their perspective it would be 100% equities. Has this changed?

I missed the thread where this was mentioned, but it is very unlikely that any UK regulated adviser would recommend that.

Cautious investors (and for that matter nearly everyone else) don't perceive a 40% stockmarket fall in a 50% equities / 50% consumer savings accounts as a 20% fall. They perceive it as losing 40% of their money, and sell their equities before they lose any more, to add to their 50% cash which is doing so much better.

People only take a holistic view when everything is going up.

I linked the previous update by the OP, given in his previous thread on the subject earlier on this page, but here it is again: https://forums.moneysavingexpert.com/discussion/comment/79161938/#Comment_79161938

There's been a series of threads chronicling the journey to that point. The savings ladder plus global tracker portfolio seems to have been suggested in another of the OP's threads on this topic and favoured over multi-asset DIY/multi-asset advised/robo. There have been several threads running in parallel, so not always easy to follow along with the current thinking. Prior to this thread being started, it seemed the 50:50 portfolio had been decided upon and the IFA was on board, but as you can probably see, I have a question for the OP in relation to this. It is possible the IFA has only agreed to advise on the 50% of assets as if they were the only assets under consideration, so not to take the 50% cash as a bonds proxy. OP does not want to include bonds in the portfolio (discussed in another of the threads), so that would have been a non-starter I believe, and perhaps goes some way to explaining how this new thread appears to be back at square one.

The IFA had based his figure of 4% based on him using 50 % of my funds

This was after costs 

"The  4% would only be on the funds held in the ESG Cautious portfolio.This isn’t guaranteed, and it could be more or less than this."

I would be using the other 50% to try and attain an overall return of about 2%

I haven't moved ahead on this as yet as I am just making some last minute checks to ensure I have covered all options before I make a final decision

Ok, so you are going to be super cautious overall with 50% in cash. I think the average return of 4% on the other 50% (after costs of 1.2%) sounds optimistic for a cautious portfolio! Don't expect that in the early years.

I'm still thinking about it

My cash should get 2%
But need to factor in tax

The 4% return on investment is not guaranteed and of course there could be a loss in early days due to volatility

It's not an appealing prospect

To be frank I'm going round in circles and getting nowhere

This is why I was looking for advice on Vanguard style investments

Plus info on True Potential

The problem is your risk tolerance rather than the choice of adviser. It's not something you can or should change. A worse outcome will be achieved if you invest above your risk tolerance, watch your investments fall, then sell them to make it stop.

Whatever you decide to do, there will be risk, whether it is short term volatility or long-term erosion of value due to inflation.

DoneWorking

eskbanker said:

DoneWorking said:

To be frank I'm going round in circles and getting nowhere

This is why I was looking for advice on Vanguard style investments

Perhaps already covered in one of the threads but 'Vanguard style investments' isn't really a thing!  They offer many types of investment, including multi-asset funds and trackers in ETF and OEIC form, but these aren't really associated specifically with Vanguard as such, so that's a bit like saying you're looking for a Ford-style car when you're actually specifically after, say, a hatchback....

Thanks

Apologies for my use of words

What I meant to say is that I was thinking about using Vanguard style funds or products 

But I do not currently have sufficient knowledge to move forward on this

DoneWorking

masonic said:

DoneWorking said:

masonic said:

DoneWorking said:

masonic said:

Malthusian said:

masonic said:

There's an appreciable difference between a real return of 4%, a nominal return of 4%, a maximum return of 4% and an average return of 4%. You should probably seek to clarify what was actually meant. My understanding is that you were going for a portfolio that was 50% equities and 50% consumer savings accounts, where the adviser would only be responsible for the equities part, so from their perspective it would be 100% equities. Has this changed?

I missed the thread where this was mentioned, but it is very unlikely that any UK regulated adviser would recommend that.

Cautious investors (and for that matter nearly everyone else) don't perceive a 40% stockmarket fall in a 50% equities / 50% consumer savings accounts as a 20% fall. They perceive it as losing 40% of their money, and sell their equities before they lose any more, to add to their 50% cash which is doing so much better.

People only take a holistic view when everything is going up.

I linked the previous update by the OP, given in his previous thread on the subject earlier on this page, but here it is again: https://forums.moneysavingexpert.com/discussion/comment/79161938/#Comment_79161938

There's been a series of threads chronicling the journey to that point. The savings ladder plus global tracker portfolio seems to have been suggested in another of the OP's threads on this topic and favoured over multi-asset DIY/multi-asset advised/robo. There have been several threads running in parallel, so not always easy to follow along with the current thinking. Prior to this thread being started, it seemed the 50:50 portfolio had been decided upon and the IFA was on board, but as you can probably see, I have a question for the OP in relation to this. It is possible the IFA has only agreed to advise on the 50% of assets as if they were the only assets under consideration, so not to take the 50% cash as a bonds proxy. OP does not want to include bonds in the portfolio (discussed in another of the threads), so that would have been a non-starter I believe, and perhaps goes some way to explaining how this new thread appears to be back at square one.

The IFA had based his figure of 4% based on him using 50 % of my funds

This was after costs 

"The  4% would only be on the funds held in the ESG Cautious portfolio.This isn’t guaranteed, and it could be more or less than this."

I would be using the other 50% to try and attain an overall return of about 2%

I haven't moved ahead on this as yet as I am just making some last minute checks to ensure I have covered all options before I make a final decision

Ok, so you are going to be super cautious overall with 50% in cash. I think the average return of 4% on the other 50% (after costs of 1.2%) sounds optimistic for a cautious portfolio! Don't expect that in the early years.

I'm still thinking about it

My cash should get 2%
But need to factor in tax

The 4% return on investment is not guaranteed and of course there could be a loss in early days due to volatility

It's not an appealing prospect

To be frank I'm going round in circles and getting nowhere

This is why I was looking for advice on Vanguard style investments

Plus info on True Potential

The problem is your risk tolerance rather than the choice of adviser. It's not something you can or should change. A worse outcome will be achieved if you invest above your risk tolerance, watch your investments fall, then sell them to make it stop.

Whatever you decide to do, there will be risk, whether it is short term volatility or long-term erosion of value due to inflation.

I've always known I was risk adverse 
But assumed I would not need to take investment risks after retirement due to low inflation

I felt able to accept a hit of 2% inflation

Although I realized inflation would rise at some point I never thought it would be so high

Dealing with this higher inflation is at the heart of my dithering

I know I have to do something but the prospect of making it worse by ending up with investment loss due to factors beyond my control is incredibly stressful

cheerfulcat

DoneWorking, it seems to me that you are tying yourself into tighter and tighter knots over this! I wonder whether it wouldn’t be better to just step back and take a wider view. In your main thread ( https://forums.moneysavingexpert.com/discussion/6318154/best-option-for-cash-lump-sum/p1 ), you say

“I am looking for the best option for what to do with a lump sum of around £400k as from January

I have a fair pension and very little outgoings and do not need to secure any income from this money

However I do want to protect it from inflation so I can bequeath it to my wife after I pass on which will be probably in ten years time “.

So your goal for this money is to support your wife after you’ve gone? If that is the case, then your time horizon is based on her life expectancy ( you can get an idea of that here - https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/articles/lifeexpectancycalculator/2019-06-07 ). 

You may not need an income from it, but will she? Will she benefit from your pension? Does she have her own pension arrangements? Does she have ISAs or other investments?

 

GSP

I suppose 4 pages in a question you should be asking yourself how comfortable you are with TP now?

As there are a number of doubts or concerns raised, perhaps that’s telling you things are not well?

Albermarle

DoneWorking said:

eskbanker said:

DoneWorking said:

To be frank I'm going round in circles and getting nowhere

This is why I was looking for advice on Vanguard style investments

Perhaps already covered in one of the threads but 'Vanguard style investments' isn't really a thing!  They offer many types of investment, including multi-asset funds and trackers in ETF and OEIC form, but these aren't really associated specifically with Vanguard as such, so that's a bit like saying you're looking for a Ford-style car when you're actually specifically after, say, a hatchback....

Thanks

Apologies for my use of words

What I meant to say is that I was thinking about using Vanguard style funds or products 

But I do not currently have sufficient knowledge to move forward on this

You seem to be obsessing a bit about Vanguard . They are just one company of many offering similar products .
If you employ an IFA , they may well recommend other companies investment funds.

To use a similar analogy to one already used.
If you were searching for a new car , your first and most important decision is what type of car . Electric; hybrid; petrol; hatchback, estate , mini SUV; big SUV etc 
Only when you have made this decision can you then start thinking about what brand you prefer.

Same with investments . First you decide on the type of investments you want and at what risk level . Then only later pick the actual fund/manager. The former is by far the most important decision, the latter is less important.

DoneWorking

Albermarle said:

DoneWorking said:

eskbanker said:

DoneWorking said:

To be frank I'm going round in circles and getting nowhere

This is why I was looking for advice on Vanguard style investments

Perhaps already covered in one of the threads but 'Vanguard style investments' isn't really a thing!  They offer many types of investment, including multi-asset funds and trackers in ETF and OEIC form, but these aren't really associated specifically with Vanguard as such, so that's a bit like saying you're looking for a Ford-style car when you're actually specifically after, say, a hatchback....

Thanks

Apologies for my use of words

What I meant to say is that I was thinking about using Vanguard style funds or products 

But I do not currently have sufficient knowledge to move forward on this

You seem to be obsessing a bit about Vanguard . They are just one company of many offering similar products .
If you employ an IFA , they may well recommend other companies investment funds.

To use a similar analogy to one already used.
If you were searching for a new car , your first and most important decision is what type of car . Electric; hybrid; petrol; hatchback, estate , mini SUV; big SUV etc 
Only when you have made this decision can you then start thinking about what brand you prefer.

Same with investments . First you decide on the type of investments you want and at what risk level . Then only later pick the actual fund/manager. The former is by far the most important decision, the latter is less important.

From memory I usually refer to Vanguard style funds

I have been exploring other options too

eskbanker

DoneWorking said:

Albermarle said:

DoneWorking said:

eskbanker said:

DoneWorking said:

To be frank I'm going round in circles and getting nowhere

This is why I was looking for advice on Vanguard style investments

Perhaps already covered in one of the threads but 'Vanguard style investments' isn't really a thing!  They offer many types of investment, including multi-asset funds and trackers in ETF and OEIC form, but these aren't really associated specifically with Vanguard as such, so that's a bit like saying you're looking for a Ford-style car when you're actually specifically after, say, a hatchback....

Thanks

Apologies for my use of words

What I meant to say is that I was thinking about using Vanguard style funds or products 

But I do not currently have sufficient knowledge to move forward on this

You seem to be obsessing a bit about Vanguard . They are just one company of many offering similar products .
If you employ an IFA , they may well recommend other companies investment funds.

To use a similar analogy to one already used.
If you were searching for a new car , your first and most important decision is what type of car . Electric; hybrid; petrol; hatchback, estate , mini SUV; big SUV etc 
Only when you have made this decision can you then start thinking about what brand you prefer.

Same with investments . First you decide on the type of investments you want and at what risk level . Then only later pick the actual fund/manager. The former is by far the most important decision, the latter is less important.

From memory I usually refer to Vanguard style funds

I have been exploring other options too

But what do you actually mean by that?

Nobody's trying to pick holes for the sake of it but if you clarify what you mean then someone can advise what the normal recognised term would be, which should ultimately help you when researching your investment decisions....