True Potential ISA

mettlemickey

Hello Everyone,

Last night my wife and I had a visit from a Financial Advisor from True Potential. He was very professional, not at all pushy and we generally liked his advice around our work pensions and taking an ISA out to supplement them.

However, he told us that they only invest in their own True Potential fund, where other advisors I've spoken to have suggested a certain fund (usually Vanguard) but told us that they could move to any given fund in the market if they thought this was in our benefit. My gut says its not sensible to tie in to a single fund and its better to have the option to move within the market if the fund isn't performing well. But am I missing something here? Is the True Potential fund somehow a really good one that it's worth tying in to? Or should I listen to my gut?

Thanks for your thoughts.

Albermarle

No idea how 'good' the TP funds are or not, but clearly it is better to work with an advisor who has a full market to choose from.
 As you have workplace pensions and setting up a S&S ISA yourself is very easy, I wonder whether a financial advisor is really needed anyway?

Johnjdc

It's not unheard of but I would find it annoying. Their website doesn't make it fully clear as it does mention "self-directed investment" as one of the options.

My other question would be - they allocate in the TP funds but then essentially it's a fund of funds, based on what their "investment partners" page says.

Are they just taking 0.8% to allocate weightings to their portfolios and then sit back, while you pay another (say) 0.5% on the actual funds within those portfolios, such that you're paying 1.3% in total? Or are fund manager charges absorbed in the 0.8%. It doesn't seem clear.

Beddie

It's probably this - https://www.tpllp.com/true-potential-portfolios/

So they risk assess you and choose a portfolio based on that. This is then managed for the level of risk.

Why did you speak to this adviser, when you've already spoken to others who are independent? He might be a nice chap, but if this is all they are offering you might as well choose your own investments. However, if you value the advice and feel you can work with this guy, that's fine too! It's your money

mettlemickey

Beddie said:

It's probably this - https://www.tpllp.com/true-potential-portfolios/

So they risk assess you and choose a portfolio based on that. This is then managed for the level of risk.

Why did you speak to this adviser, when you've already spoken to others who are independent? He might be a nice chap, but if this is all they are offering you might as well choose your own investments. However, if you value the advice and feel you can work with this guy, that's fine too! It's your money

Yes I think you're right, the guy said the reviews are basically just assessing our needs and modifying the risk level to suit. I didn't know this chap was not independent until he got here, someone recommended him. He seems fine, but im not keen on the tie in now I know it exists.

Albermarle

If all you want is for someone to manage an ISA for you, based mainly on a risk assessment, with no other advice about pensions etc ( and no face to face contact), there are the robo advisors, like Nutmeg and Wealthify, or a new service launched by Vanguard. Managed ISA | Vanguard UK Investor (vanguardinvestor.co.uk)

All will only use their own products.

mettlemickey

Albermarle said:

If all you want is for someone to manage an ISA for you, based mainly on a risk assessment, with no other advice about pensions etc ( and no face to face contact), there are the robo advisors, like Nutmeg and Wealthify, or a new service launched by Vanguard. Managed ISA | Vanguard UK Investor (vanguardinvestor.co.uk)

All will only use their own products.

Thanks Albermarle, I do value the advice of an IFA to recommend a particular fund, periodic pension advice is always useful too.

Eyeful

1. I have never heard of TP before now. 
However taking a very quick look on their website I see that they term themselves
"Wealth Management". Every since I can recall, this has been an initial indication, that you can expect to be paying higher fees and expenses than you need to. This of course means that all things being equal, less money ends up in your pocket.

2. Are they independent or tied.
 If they are the latter, if they pick their best fund (with low charges,) if it has below average performance you will get below average performance & are stuck with it.
If they are independent, then you should be able to switch to a better performing fund. 

3. Do you really have large amounts to invest and need advice. Then it makes sense to seek an Independent Financial Adviser (IFA). Not a tied financial adviser.

4. If all you need is just general knowledge on money, investing, pensions, there is the internet.
Get to know the basics.
Examples:
https://monevator.com/
https://www.kroijer.com/

5. The person may have been professional and not pushy. That sounds just like the man from the Prue that called each week to collect my parents insurance money. At the end of the day he was just an insurance salesman. You are far more likely to complete a sale by being nice to the customer than being pushy. 

dunstonh

However, he told us that they only invest in their own True Potential fund, where other advisors I've spoken to have suggested a certain fund (usually Vanguard) but told us that they could move to any given fund in the market if they thought this was in our benefit.

Advisers are split between FAs and IFAs.    FAs are restricted.  This can mean in products and services they offer or areas they advise in. The most common restriction is that they are sales rep of a provider.   IFAs are independent.  Any hint of restriction then they are not allowed to refer to themselves as independent. 

Thanks Albermarle, I do value the advice of an IFA to recommend a particular fund, periodic pension advice is always useful too.

TP are FAs. Not IFAs.

The general rule of thumb is that you should either DIY or use an IFA.  Not an FA.    

Brilley

We moved to TP about 6 years ago, and our investment (mid risk) have been steadily "losing" money ever since, (due to inflation).

Initially we were informed "a likely return return of 8%", but the highest we ever achieved was 4%, (pre pandemic) and currently returns to date equivalent to 1.5% / yr overall. (TP / advisor have probably made more money than we have?).

Once you have had the "advice" to assess your risk it would probably be better to read up and DIY? I would leave them but that would just consolidate our (to date), poor returns.

We were advised that if you are investing you should do so for the "long term, (10 years), but after 6 years I would have expected a better return, but I accept Covid and a war has not really helped things!

Also depends whether or not you actually need "ongoing" or just "one off" advice?

..and yes they will only offer you their products based on your risk.

Albermarle

I have never heard of TP before now.

They are mentioned from time to time on here, mainly because they seem very active in tempting IFA's who are near retirement to join them, and bring their clients with them ( for a bonus of course)

Initially we were informed "a likely return return of 8%", but the highest we ever achieved was 4%, (pre pandemic) and currently returns to date equivalent to 1.5% / yr overall. (TP / advisor have probably made more money than we have?)

Your personal returns can be skewed by when you have contributed and exactly how the provider reports them.

A better comparison could be to see how that fund has performed over 6 years and compare it to a medium risk multi asset fund like HSBC Global Strategy Balanced C Acc (morningstar.com)

You have to be careful that you are not comparing apples with pears though, so it is only an indication.