Is it time to change from a wealth Manager aka True Potential to IFA or go DIY?

edited 24 January at 4:32PM in Savings & investments
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TallGirlTallGirl Forumite
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edited 24 January at 4:32PM in Savings & investments
I am aware others are asking the same as me currently but I felt it clearer to start a new thread based on my circumstances. I was with an FA (mainly used Old Mutual) for 5 years but he retired in 2021 and passed me on to True Potential. It feels a bit impersonal after having had the same adviser but nothing bad to say about the service I have had so far. I do struggle with the fees in terms of working out how much they charge although I do know there is a fee for advice and usually a platform one as well. 

My assets are very simple and currently looks as follow

GIA £28K True Potential Growth Portfolio -(£20K will be moved to S&S in April.) 
S&S £158K True Potential Growth Portfolio
Pension £248K Royal London

Occupational Pension £25K with Scottish Widows pay min in plus employer contribution which is the max they will pay.
Defined Contributions pension £3.5K pa at last valuation. 

I am 52, secure job able to save about £8K a year my other half is 57 self employed/part time employee take home minimal wages until self employment starts to pay. I want to retire in 5 years max 7 years and she would like to go as soon as possible but know this is not possible. Both entitled to full state pension at 67/68

I have had pension forecasts done and it looks about doable to have £30K p.a as I also have savings (Premium Bonds to live off to start with). I spoke to an old colleague who is now an IFA and she quoted me her fees as follows:
2.5% initial fee and 0.75% ongoing. 

My question is it worth switching over considering the initial fee but also thinking about how badly everything has done this last year should I just leave it alone? 
Do I really need financial advice or should I just go DIY? I could move the S&S to a passively managed fund say Vanguard and be done with that. 

Any comments gratefully received I know you cannot give financial advice here. I am just trying to work out the savings of switching and if there is any work involved in managing it myself. I feel clued up and very interested in finance so let me know if I need to provide more information. 

Many thanks


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  • AlbermarleAlbermarle Forumite
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     I do struggle with the fees in terms of working out how much they charge although I do know there is a fee for advice and usually a platform one as well. 

    Normally there is an advisor fee + platform fee+ a fee for the investment funds. The first two will be paid by you directly. Often the fund fee is taken out of the fund, so you do not pay it directly. Sometimes the platform fee and fund fee are combined.

    Until you know exactly what you are being charged then you can not compare it with any alternative, so you need to get clarity on the charges.

     I spoke to an old colleague who is now an IFA and she quoted me her fees as follows:
    2.5% initial fee and 0.75% ongoing. 
    My question is it worth switching over considering the initial fee but also thinking about how badly everything has done this last year should I just leave it alone? 

    These are only the advisor fees, you will not know the full annual charges until she has picked your investment portfolio and platform for you. So as you do not know what the charges are for the old and new advisors it is not possible to give an opinion. Only that you will pay a new initial fee ( quite a high one as well) if you move advisor.

    Do I really need financial advice or should I just go DIY? I could move the S&S to a passively managed fund say Vanguard and be done with that. 

    The $64K question asked many times on this forum , with varying opinions in response. All I will say is that it is not just about the investing, but also around withdrawal strategies, tax, general financial advice  etc. So you will have to put in some time to understand the bigger picture, rather than just changing to a cheaper investment. Many on here DIY, often learning a lot from this forum.

  • Richard1212Richard1212 Forumite
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    Please see my post at about 4.30pm on this forum called "Transfer from management of investments in active Wealth Manager to Vanguard passive funds" and I set out the difference there in certain advisers' "credentials" and I provide factual examples ( though there are many varied ways to become financial advisers). However I think my examples give a broad indication of the advice to turn to . You mention fees from an IFA of 2.5% + ongoing costs. My Wealth Manager charges sme 1.2% and he has a first class honours degree in financial management degree, an MA, years of experience in the finance sector and 4 years of studying for the coveted CISI qualification as a "Chartered Wealth Manager". He is worth his weight in gold to me ---he deals not only with the minutiae and details that I don't have time to do but he also advises on his and my ideas regarding my shares' portfolio ( and more). I would gladly pay him a higher fee. 

    You will see what I think of the whole subject which you have so clearly outlined in your post.

    Yes, you can opt out of all the hassle by going under the umbrella of Vanguard etc. But IMHO that takes a lot away from the achievement and "hands-on" of building up a large portfolio.

    But whichever route you decide to follow, may I take this opportunity to wish you well for your future healthy finances.
  • edited 24 January at 5:02PM
    jimjamesjimjames Forumite
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    edited 24 January at 5:02PM
    TallGirl said:

    I have had pension forecasts done and it looks about doable to have £30K p.a as I also have savings (Premium Bonds to live off to start with). I spoke to an old colleague who is now an IFA and she quoted me her fees as follows:
    2.5% initial fee and 0.75% ongoing. 
    Do I really need financial advice or should I just go DIY? I could move the S&S to a passively managed fund say Vanguard and be done with that. 
    I can't advise on way or another but personally I would definitely not be doing that and paying that fee. If you repeatedly use different advisers taking initial fees (which presumably happened with the Wealth manager) then they're each getting a bit chunk of your portfolio and your part is getting smaller.

    Certainly for what you've posted it doesn't look complex enough to be paying a wealth manager for but that's the choice to make if you want to make the time to DIY.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • bostonerimusbostonerimus Forumite
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    If you feel capable of navigating financial waters then DIY is definitely a possibility and to be honest if you have some basic maths skills and some common sense you can master all you need to know relatively quickly. But it really depends on what makes you comfortable. I can see the value of an IFA for one off advice when it comes to things like drawdown, but ongoing advice is difficult to justify IMO if circumstances are not changing much. For the amounts you are talking about you certainly don't need a wealth manager. Just think if you are in drawdown and have IFA fee of 0.75%, fund and platform fees of say 0.5% and maybe a wealth manager charging 1%, so that's 2.25% of your invested assets per year going on financial fees. That will be ~11k on half a million pounds and might well be your largest cost in retirement and severely limit your spending. How do you feel about spending a third of you 30kpa on financial fees? Now if you have 5 million pounds you can probably afford those sort of fees, but for the average investor they can really hammer a budget.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • JohnWinderJohnWinder Forumite
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    Firstly, you don’t ‘need’ an advisor or a wealth manager, in the sense of ‘ought to have one’. Having one might benefit you, or might leave you worse off when it comes to handing any residual over to your heirs (even without what you’d lose in fees). 

    You suggest there’s no urgency to decide, so you might spend the next 6-12 months (how diligent or committed are you?) learning the basics to allow you to DIY. If that feels successful, and gives you some confidence that you could DIY, proceed straight to DIY. If not, turn left to explore an IFA option as a possibly better choice than your current situation. At that time, choosing IFA or stay put, you’ll be far better informed about personal investing allowing you to make a better informed decision and for the rest of your life be less likely to have the wool pulled over your eyes by the financial services industry.

    So ‘no’ it’s not time to change, but you could work towards deciding whether you should.

  • Richard1212Richard1212 Forumite
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    Based on the financial figures set out by TallGirl in her opening post, I would imagine looking after her own finances or shielding within Vanguard are probably the best options for consideration.

    Personally, I cannot imagine life without my Wealth Manager but that is due to my own portfolio and nothing to do with what TallGirl decides upon.

    Once again, I wish her all the best with her healthy finances in whatever direction she decides to go.
  • TallGirlTallGirl Forumite
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    Thank you all so informative and some really good points. I’m going to contact TP today and ask about the fees. I do not recall paying to join them as the other FA set it all up but worth checking. 
  • AlbermarleAlbermarle Forumite
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    TallGirl said:
    Thank you all so informative and some really good points. I’m going to contact TP today and ask about the fees. I do not recall paying to join them as the other FA set it all up but worth checking. 
    You would have paid an initial fee to the original IFA, but as you were transferred to TP, then no need for a new one.
  • TallGirlTallGirl Forumite
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    Thank you I have now got some sort of answer  

    I can confirm that you fees you pay to True Potential are as follows:
    - 0.5% annual service fee
    - 0.4% platform fee
    - 0.8% portfolio fee

    They also explained where to filter out the "investment fees" for each type of investment. I have asked what this covers of the above but it looks like I am being charged approx. £100 a month for the ISA and £20 a month for the GIA. I have also asked what period the section on the "total fees covers" as it does not say (stands at £1600 and £400). I know I should know all of this but at least this is making me look and hopefully it will helps someone else by me reporting back.  
  • dunstonhdunstonh Forumite
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    I can confirm that you fees you pay to True Potential are as follows:
    - 0.5% annual service fee
    - 0.4% platform fee
    - 0.8% portfolio fee
    adviser service fee is right in the ballpark.
    Platform fee is expensive (0.2x% ballpark nowadays)
    portfolio charges will vary from around 0.1% to 1.00%.   The closer to 0.1%, the more passive funds are used. The higher towards 1.00%, the more active funds are used.   Hybrid portfolio (mix of the two) tend to be closer to 0.4%.  So, I suspect this ia fully active portfolio.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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