Most tax efficient and low risk way to invest £1m today for an income

GenieBoy

When I won I didn't think I'd need any advice but how wrong was I. I could have just saved up the £10K every month and watched the value of it go down in real terms. Now I'll be able to make the money work for me to provide an income for the rest of my life well beyond the 30 years.

kuratowski

With a bit of knowledge, you could have done that equally well by yourself, without the help of Coutts or whoever.  Or, as above, you could have had the same advice cheaper from an IFA.

TheBanker

kuratowski said:

With a bit of knowledge, you could have done that equally well by yourself, without the help of Coutts or whoever.  Or, as above, you could have had the same advice cheaper from an IFA.

With a bit of knowledge I could do my own plumbing. But I don't have the knowledge and I'd probably get it wrong. So I pay someone who knows what they're doing and can stop me making mistakes. 

If I have £1m then paying for financial advice wouldn't bother me. Then I could enjoy my free time rather than spending it learning about finances (or plumbing!)

adindas

TheBanker said:

kuratowski said:

With a bit of knowledge, you could have done that equally well by yourself, without the help of Coutts or whoever.  Or, as above, you could have had the same advice cheaper from an IFA.

With a bit of knowledge I could do my own plumbing. But I don't have the knowledge and I'd probably get it wrong. So I pay someone who knows what they're doing and can stop me making mistakes. 

If I have £1m then paying for financial advice wouldn't bother me. Then I could enjoy my free time rather than spending it learning about finances (or plumbing!)

If people are using the wealth management to grow their money (not for tax or other purposes) then they simply can not compare a plumber with a wealth manager.

A plumber deliver a tangible benefit. Compared to another alternative if you can not do plumbing DIY, if you do not ask the plumber to fix it for you, your life will be miserable.

On the contrary to the wealth manager. If the wealth manager can not beat the return from an index such as S&P, where you could easily do it yourself, it will beg a question what you are paying for ?

GenieBoy

No it's not Coutts, they are a bank.

TheBanker

adindas said:

TheBanker said:

kuratowski said:

With a bit of knowledge, you could have done that equally well by yourself, without the help of Coutts or whoever.  Or, as above, you could have had the same advice cheaper from an IFA.

With a bit of knowledge I could do my own plumbing. But I don't have the knowledge and I'd probably get it wrong. So I pay someone who knows what they're doing and can stop me making mistakes. 

If I have £1m then paying for financial advice wouldn't bother me. Then I could enjoy my free time rather than spending it learning about finances (or plumbing!)

If people are using the wealth management to grow their money (not for tax or other purposes) then they simply can not compare a plumber with a wealth manager.

A plumber deliver a tangible benefit. Compared to another alternative if you can not do plumbing DIY, if you do not ask the plumber to fix it for you, your life will be miserable.

On the contrary to the wealth manager. If the wealth manager can not beat the return from an index such as S&P, where you could easily do it yourself, it will beg a question what you are paying for ?

I am paying for the Wealth Manager (or IFA)'s expertise. I am not asking for them to beat a particular index, rather I am asking them to help me arrange my finances in a way that could support the lifestyle I want to have. I would not necessarily want to squeeze every last penny of income out of my money because this would involve excessive risk.

I think the service I'd find most useful would be cashflow modelling, similar to what people (should) do before drawing down their pension. And I do see a tangible benefit - I know my plans are sound and have been validated by an expert - so I will have less anxiety about running out of money. I will know how much I can spend on a new car, a bigger house, gifts to family etc and how this will impact my future position.

I think without this, I'd be nervous about spending money on luxuries for fear of running out of cash. But I don't want to be the richest man in the graveyard either. So I do think professional advice would be very useful and personally I would be willing to pay for it rather than take the risks associated with trying to manage everything on a DIY basis.

I appreciate that if your goal is simply to beat a particular index, then their services may be less useful. Especially because I don't believe most IFAs offer 'beat a specific index' as one of their specialisms.

wmb194

GenieBoy said:

No it's not Coutts, they are a bank.

Coutts offers wealth management and it's definitely regularly mentioned in relation to lottery winners but it could be that your win wasn't large enough to meet its criteria or the National Lottery is now recommending a different one.

https://www.coutts.com/wealth-management.html

I'd be interested to know the broad brush of what your guys have you invested in.

Malthusian

wmb194 said:

What investments did the financial planner Camelot referred you to suggest for your £10k pm Set For Life win?

https://forums.moneysavingexpert.com/discussion/6399266/sfl-winner/p1

The big question there is whether they have any long term investments in the first place; saving part of a large monthly income is very different from investing a lump sum already in your hands.
(Despite the name, the Set For Life prize only pays out for 30 years, so if you want to keep your lifestyle after that, you need to save some of your prize ecah month. I'd be very intrigued as to how many SFL winners are actually doing that and what the impact on their lives will be if they don't. It seems to me that living in relative luxury for 30 years and then going back to nothing would be even harder than blowing through a seven-figure fortune in a year or two and then going back to nothing. But we'll have to wait until 2049 to find out...)

Malthusian

adindas said:

If the wealth manager can not beat the return from an index such as S&P, where you could easily do it yourself, it will beg a question what you are paying for ?

If I knew how to install taps that turned mains water into champagne I wouldn't bother hiring a plumber either.

TheBanker

Malthusian said:

wmb194 said:

What investments did the financial planner Camelot referred you to suggest for your £10k pm Set For Life win?

https://forums.moneysavingexpert.com/discussion/6399266/sfl-winner/p1

The big question there is whether they have any long term investments in the first place; saving part of a large monthly income is very different from investing a lump sum already in your hands.
(Despite the name, the Set For Life prize only pays out for 30 years, so if you want to keep your lifestyle after that, you need to save some of your prize ecah month. I'd be very intrigued as to how many SFL winners are actually doing that and what the impact on their lives will be if they don't. It seems to me that living in relative luxury for 30 years and then going back to nothing would be even harder than blowing through a seven-figure fortune in a year or two and then going back to nothing. But we'll have to wait until 2049 to find out...)

This is a good point, and if they stop working and therefore don't think about retirement savings, they're likely to have a shock because their winnings will likely run out at around the time they'd be thinking of retiring. Imagine going from £10k a month to the State Pension (and not a full pension if they've not made sufficient NI contributions). 

Personally I'd be ok - 30 years would see me through to 70 and I'd make sure I put enough aside each month to provide the necessary income from then onwards.