Which Platform? .... and which BOOK for beginner? PLEASE

Aminatidi

I've been investing a little over four years.

I'd like to think I've read and watched a lot.

One of the things I think I now know that I wish I'd been more certain of when I started out was how little it's about the choice of investments and how much it's about understanding your appetite for risk and your psychology and just sticking with it.

People tend to obsess over small differences between platforms and funds but I think you could go out today (well Monday) and open a Vanguard account and start investing in a global tracker or a bond fund or a multi-asset fund and so long as you were investing in line with your appetite for risk you'd be there or there about if you stuck with it.

A lot of the value of an IFA is coaching and behavioural.

If you want to read a good book I'd suggest "Just Keep Buying" by Nick Maggiulli.

You won't come away from it knowing anything about individual stocks or small cap funds or emerging markets but it illustrates with data the value of good investment behaviour and keeping costs low.

Albermarle

I will be investing in this field for the very first time. I have been in business all my life until recent retirement, and fully understand the risks. The gains I hope to derived from the investment will hopefully be enough to be my main income

See in bold - nothing with investing is cast iron guaranteed, You need to have a Plan B in case of a very long bad run in the markets, which could even  turn your income stream negative.

For example this year most investment portfolios are down 7 to 15% ( some even more ). With inflation at 10% the average real loss is around 20%, so far .

coyrls

datadezign said:

QUOTE: Dump the banks. Dump the FAs.   The choice should IFA or DIY.

is that everyone’s experience?

It is the guidance that most people on this forum would agree with and that's saying a lot, as there is not much that most agree on.

datadezign

Thank you everyone again for your advise.

Based on some comments made, is it not then relevant to see how the various platform funds manager have performed over a period of time? I have come across a performance league table provided by Yodelar that shows 1-5 star fund performance over a 5 year period. Amongst the various platforms suggested by FA & IFA’s are Vanguard, Aviva, Barclays, Lloyds-Schroder and SJP. The performance shown reflects particularly what some have said on this forum, with SPJ very low ranking and as said with very high fees. Vanguard that has been suggested by a IFA is ranked very high with good performance. I have also had one IFA suggest Jupiter, but there performance has not been good. Is the Yodelar table considered reliable, and if so, are the performance and ranking positions a worthwhile part of my decision making, or is a 5 year period not a sufficient time period to judge?

A few of you have suggested that the IFA is key, however I question why some IFA’s may suggest using a platform / fund manager that is not performing well?

Linton

datadezign said:

Thank you everyone again for your advise.

Based on some comments made, is it not then relevant to see how the various platform funds manager have performed over a period of time? I have come across a performance league table provided by Yodelar that shows 1-5 star fund performance over a 5 year period. Amongst the various platforms suggested by FA & IFA’s are Vanguard, Aviva, Barclays, Lloyds-Schroder and SJP. The performance shown reflects particularly what some have said on this forum, with SPJ very low ranking and as said with very high fees. Vanguard that has been suggested by a IFA is ranked very high with good performance. I have also had one IFA suggest Jupiter, but there performance has not been good. Is the Yodelar table considered reliable, and if so, are the performance and ranking positions a worthwhile part of my decision making, or is a 5 year period not a sufficient time period to judge?

A few of you have suggested that the IFA is key, however I question why some IFA’s may suggest using a platform / fund manager that is not performing well?

1) Platform's do not perform well/badly.  They provide a service and charge for that service.  Peformance comes from the funds you invest in.

2) Comparing funds from different providers is not that meaningful unless the funds are investing in the same things.  Funds with a similar title can be very different.  Similarly different fund managers have different ranges of funds.

3) Comparing performance over short periods (<10 years?) is not that meaningful.  For example since 2009 until recently tech has performed very well.  However in the past 6 monthsr or so tech has dropped significantly and the best performing funds have been those that invest in more boring and safer companies.  This effect was extremely evident in trhe period 2000-2005 when high tech funds  crashed whereas safe dividend paying ones carried on regardless.  Relative performance over one time period is not a good predictor of relative performance over a different one.

4)  Performance should not be a major criterion when choosing funds as higher performance can imply higher risk.  Any IFA that promotes his services on performance should be avoided (not that I have heard of any that do).  What is important is that the funds chosen are appropriate for your needs - most peoiple dont want to increase the chance of not meeting their objectives  to get excess return.   Also the funds need to be appropriate for you - if your red-hot high return fund crashes would you sell it in a panic and so guarantee a loss?

Investing in appropriate rather than highest performing investments is one of the main reasons for choosing an IFA in the first place.

datadezign

Thank you Linton makes sense, so unless we can compare like for like, as said the performance in the league table will not show how a specific platform / fund managers have performed in the mix of funds created in our own tailored portfolio? 

ColdIron

Platforms do not perform

Linton

datadezign said:

Thank you Linton makes sense, so unless we can compare like for like, as said the performance in the league table will not show how a specific platform / fund managers have performed in the mix of funds created in our own tailored portfolio? 

If you define portfolios with specific funds at specific % allocations then you can calculate how they will have performed in the past.  Of course this will be before platform and advisor charges.  

It wont tell you how the portfolios will perform in the future.  

If you try and work out a portfolio that will have done best in a previous short or medium term period there is a very good chance it will perform unusually badly in the future as it will probably be very poorly diversified.  Diversification is a major driver in desiging a portfolio as it ensures you wont suffer very badly should one type of investment, one industrial sector, one country, or one company crash.

In the long term funds can be very different thanks to changing managers or strategies.

dunstonh

ased on some comments made, is it not then relevant to see how the various platform funds manager have performed over a period of time? 

If you use a whole of market platform then, in terms of platforms, you are not looking at investment funds but cost and functionality.

Amongst the various platforms suggested by FA & IFA’s are Vanguard, Aviva, Barclays, Lloyds-Schroder and SJP.

Vanguard is not a platform available to advisers.  Vanguard have a heavily restricted advice (almost guidance level) service but its not comparable to full advice.   Aviva offer a whole of market platform that is better than their DIY offering.   Barclays don't appear to have a platform available.   Lloyds with their Schroder tie in is not a platform but robo-guidence.  SJP do not offer a platform.  They use the old fashioned way of products.

 Is the Yodelar table considered reliable

Never heard of it and as such, I cannot comment on their due diligence processes.

or is a 5 year period not a sufficient time period to judge?

it is insufficient.  Especially with managed funds rather than passive where the objective of the managed fund may be suitable in one period of the economic cycle but not in another.  5 years is only around one third of the cycle.

A few of you have suggested that the IFA is key, however I question why some IFA’s may suggest using a platform / fund manager that is not performing well?

Platforms do not perform.  The investments perform.       Not performing well has to be looked at relative to other similar investments and over identical timescales.  

Jupiter have many funds. Some of theirs are income-focused and the period from the credit crunch to 2021 saw income focused funds underperform.  However, the changing cycle the markets have been going through from late 2021 means that they could come back into play again, and the areas that have done well from 2020-2021 could underperform.

Albermarle

If you hold an Investment Fund  on one platform and the same Investment fund on another platform, they will perform exactly the same way. The cost of the fund is also likely to be identical ( although occasionally the platform will offer a discount)

So when picking an investment platform, you look for their charges ( a bit horses for courses with these ) , do you like their website, do they have a good reputation, well known etc and importantly do they offer the investments you want to buy?
Some offer a very large range and  some only a restricted range.

The platform only performs in the sense that it works smoothly, has good customer service, good website etc 

So picking the platform is much less important than picking the right investments that suit your objectives and risk profile.