£300k to invest

CheekyMikey

It would be easier to make suggestions if you told us what level of annual income you’d like to achieve your future plans….are you wanting to ensure you have a large amount in say 15 years when you may need care, do you want to travel the world every year while you can and are happy to spend £50k a year doing so or do you simply want to live very well in the UK? Etc etc. The answers to those sort of questions will dictate how you should invest imo…

Albermarle

The funds are globally spread (5 each all told) and have an average equity weighting of about 33%( the UK 13.17%). Given their poor performance over the last year, we are reluctant to substantially increase our monthly investment until we reach a point where we feel more confident to do so. 

Investing is a long term game. How they have  performed over the last 10 years is more important than what has happened this year.

When will you feel more confident ? When the markets have gone back up and you have missed the boat ?

1% / £3K seems pretty normal as an initial charge for an IFA. Then if you had ongoing advice ( which most do) probably 0.5%/0.75% pa.

Do not quite follow your maths though. If 1% = £3K then the fund size must be £300K, so you only need 1% return to get the £3K back.

dunstonh

and he gave us a quote of 1% which would cover the cost of the meetings, the research, his suitability report providing the advice and the implementation of his recommendations. I assume that would be standard market rate, but it being so we would immediately start with a cost of £3k to make up and i cannot think of anything in the area of low risk investment that would do that. It would need a 3% return for the 1st year and then more to counter the effects of inflation

There is no standard rate but many firms will taper their ongoing charge based on the fund value. e.g.  1% for smaller values,  0.75% for medium and 0.50% for higher.   Charges are important but they are a secondary concern to suitability.  There is no point moaning about 0.5% to 1.0% if you end up doing something that is going to cost more than that.   At £300k you wouldnt expect 1% but around 0.5-0.75%.

Some time back, I had someone having a bit of a moan about costs.  So, I told them to go off, do some research and come back to me with what they proposed to do.   They said they would use a certain very large DIY platform that had a 0.45% charge and their own in-house Multi-manager funds as that would avoid the adviser charge.    I pointed out to them that their platform charge with us was 0.25%, the fund charges 0.11% and the adviser charge was 0.5%.  A total of 0.86%.   Their DIY solution was closer to 2%.    That was before any conversation on tax allowance use and they didnt understand any of that.

DIY works when you DIY well.  It can be costly when you DIY badly.  Just as in all walks of life.

Mothman

With 300k and another BTL to sell plus your existing investments, it may be that inheritance tax advice would be an additional benefit an IFA would bring to the table.

Richard1212

Personally, I am not a fan of IFAs for anyone looking for advice with amounts over about £100,000   ( just an arbitrary figure I pluck out of the air ---but serves as a broad yardstick ). IFAs cost a lot of money for what they do IMHO and they dislike any mention of competition in  the form of WMs). Nevertheless,using a Wealth Manager, is most definitely a noticeable "step-up" from IFAs ( so long as you check their CVs, testimonials, and other things to beware of that have been covered in posts above ) ; they often turn out to save clients more money which offsets their slightly higher charges. I have no doubt that most folk with more than £1m would not opt for an IFA.

Of course, it is a subject that will attract differing opinions. But this forum is all about members passing on advice based on their personal experiences, and that's the sole basis of this post.

Regardless of IFAs vs Wealth Managers ( about which, as I have said, there will be differing opinions ----especially on smaller amounts where IFAs can be of some help), there is a third option which is often overlooked.
              
I refer to Financial Planners.                       

An IFA will typically provide advice on a product. For example, which pension or investment is most suitable for you? What they won’t answer is “Are your savings and investment plans going to provide the amount of money you need to do all the things you plan to do?”

This is the question a Financial Planner answers. A Financial Planner will discuss your aims and priorities; when you plan to retire and what you plan to do during retirement.

Based on this they will produce a lifetime cashflow to show whether your pensions and investments will provide the necessary income to allow you to do all these things.

In effect they will answer the question “Will I run out of money?”

Off at a tangent, I would also personally recommend portfolio managers---but as they are so specialised ie just within the shares' market---I will not highlight them in this post which is already a bit lengthy. But I would say that such managers are IMHO essential if you have a great many shares spread over a diverse number of market "sectors".

Let me try and guess the reaction to this post------well, there are quite a few IFAs on this Forum as well as forumites who use IFAs; but there are probably no Wealth Managers here or people who use them.   So..............I don't have to be a great guesser to describe the posts that will respond to my comments above 

Happy New Year to all.

Albermarle

 What they won’t answer is “Are your savings and investment plans going to provide the amount of money you need to do all the things you plan to do?”

This is the question a Financial Planner answers. A Financial Planner will discuss your aims and priorities; when you plan to retire and what you plan to do during retirement.

Based on this they will produce a lifetime cashflow to show whether your pensions and investments will provide the necessary income to allow you to do all these things.

In effect they will answer the question “Will I run out of money?”

I would be very surprised if an IFA did not discuss all of these topics with me, if I was to engage one.

Then again my 2023 resolution is not to respond anymore to posts like these !

dunstonh

 Nevertheless,using a Wealth Manager, is most definitely a noticeable "step-up" from IFAs 

This thread is getting some really bizarre responses.   

I have no doubt that most folk with more than £1m would not opt for an IFA.

Wrong.  

An IFA will typically provide advice on a product. For example, which pension or investment is most suitable for you? What they won’t answer is “Are your savings and investment plans going to provide the amount of money you need to do all the things you plan to do?”

That is completely wrong.

This is the question a Financial Planner answers. A Financial Planner will discuss your aims and priorities; when you plan to retire and what you plan to do during retirement.

You seem very confused.    There is no category of adviser called financial planner.  You either have IFAs (who are whole of market) of FAs who restrict their product range/fund selection.   Both FAs and IFAs are financial planners.    They do the same thing except one can use all product types and investment types from the market place and the other restricts their selection (typically to their own in-house range or a DFM.  Both of which tend to be quite expensive.

Based on this they will produce a lifetime cashflow to show whether your pensions and investments will provide the necessary income to allow you to do all these things.

Correct. IFAs and FAs typically have cashflow software and use it were its appropriate.   

Let me try and guess the reaction to this post------well, there are quite a few IFAs on this Forum as well as forumites who use IFAs; but there are probably no Wealth Managers here or people who use them. 

As a money saving site, you are unlikely to find anyone recommending a wealth manager.

 So..............I don't have to be a great guesser to describe the posts that will respond to my comments above 

You don't.   However, I do wonder if you are posting your response as a joke as its so bizarre.

Band7

Albermarle said:

  

Then again my 2023 resolution is not to respond anymore to posts like these !

That's probably what they are hoping might happen, so they can slowly turn this board to a Marketing machine for Wealth Managers.  Don't give up. Keep sharing the chores with other people on here who are keen to preserve the money-saving theme of this site.

Happy New Year 

lagransiete

bostonerimus said:

With equities off their recent highs it might be a great time to invest in equities, but nothing wrong in using fixed rate saving accounts. I'd ladder them. ie split the money into say 5 parts and buy 1,2,3,4 and 5 year saving bonds. So you have regular access to your money and can take advantage of today's interest rates. When year 1 matures you take the interest and use the principal to buy another 5 year bond and do the same with the rest of the bonds as they mature. Eventually you have 5, 5 year bonds with one maturing every year. Or you might think about buying an annuity, which isn't an investment, but might be a useful income tool.

yes thanks I think that may well my best option at this moment although i will still keep investing in my current multifunds and when Ukraine war ends I will make further investments 

sevenhills

dunstonh said:

Equities do not seem to be a good idea at the moment,

Why?
Would you have said that had equities gone up 20% in 2022?

The FTSE all share is at the same level it was at five years ago, but add in the dividend return and you would be at least 15 % higher.