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Fund performance with Financial Advisor only gained 5.74% in five and a half years.

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  • Some helpful comments here. Yes I did believe over 5 years was a fair time to make an assessment. Clearly I need to think longer term. I've looked at my fund portfolio and I see 18 funds made up of 35% identified as UK funds,  22% identified as Global and the remaining funds spread around the world including the UK and the US.

    To make my position clear though, I am only trying to ascertain whether a return of 5.74% is reasonable when comparing with other balanced portfolios. Of course I am exposed to the real world but so are the other funds. I am not looking for a quick buck but I did anticipate slow and sustained steady growth with a bumpy road at times. I've seen my portfolio lose 20% in a week and vice versa, seen it steadily rise to recover. 

    I could ask the question another way. Would anyone commenting here be comfortable in a 5.74% return over 5.5 years and is that a realistic return over that period considering the impact of certain world events. 
  • cleverdic said:
    Some helpful comments here. Yes I did believe over 5 years was a fair time to make an assessment. Clearly I need to think longer term. I've looked at my fund portfolio and I see 18 funds made up of 35% identified as UK funds,  22% identified as Global and the remaining funds spread around the world including the UK and the US.

    To make my position clear though, I am only trying to ascertain whether a return of 5.74% is reasonable when comparing with other balanced portfolios. Of course I am exposed to the real world but so are the other funds. I am not looking for a quick buck but I did anticipate slow and sustained steady growth with a bumpy road at times. I've seen my portfolio lose 20% in a week and vice versa, seen it steadily rise to recover. 

    I could ask the question another way. Would anyone commenting here be comfortable in a 5.74% return over 5.5 years and is that a realistic return over that period considering the impact of certain world events. 
    We will need to know the funds or at least the asset allocation in more detail to understand the returns.

    To answer your final question - no I would not be satisfied with 5.74% cumulative return over 5 years, but I'm not you and my portfolio is designed to be inexpensive and hold a large percentage of equities. Bonds have had a bad couple of years thanks to interest rate increases and Liz Truss so if you have a lot of them your portfolio will have suffered.

    I'll also say that any advisor who comes up with 18 funds is "having a laugh". There's no need for that many.
    And so we beat on, boats against the current, borne back ceaselessly into the past.
  • Clive_Woody
    Clive_Woody Posts: 5,938 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    cleverdic said:
    Some helpful comments here. Yes I did believe over 5 years was a fair time to make an assessment. Clearly I need to think longer term. I've looked at my fund portfolio and I see 18 funds made up of 35% identified as UK funds,  22% identified as Global and the remaining funds spread around the world including the UK and the US.

    To make my position clear though, I am only trying to ascertain whether a return of 5.74% is reasonable when comparing with other balanced portfolios. Of course I am exposed to the real world but so are the other funds. I am not looking for a quick buck but I did anticipate slow and sustained steady growth with a bumpy road at times. I've seen my portfolio lose 20% in a week and vice versa, seen it steadily rise to recover. 

    I could ask the question another way. Would anyone commenting here be comfortable in a 5.74% return over 5.5 years and is that a realistic return over that period considering the impact of certain world events. 
    We will need to know the funds or at least the asset allocation in more detail to understand the returns.

    To answer your final question - no I would not be satisfied with 5.74% cumulative return over 5 years, but I'm not you and my portfolio is designed to be inexpensive and hold a large percentage of equities. Bonds have had a bad couple of years thanks to interest rate increases and Liz Truss so if you have a lot of them your portfolio will have suffered.

    I'll also say that any advisor who comes up with 18 funds is "having a laugh". There's no need for that many.
    Probably trying to justify £6k in fees by spreading the investment over a bucket load of funds.
    "We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein
  • boingy
    boingy Posts: 1,916 Forumite
    1,000 Posts Second Anniversary Name Dropper
    I think it is perfectly reasonable to look at how an investment is doing after five years and ask "is that about right for the general market performance?".  There have been some rough years in that period but your investment has still underperformed. 

    I don't know what the brief was that you gave to the advisor but I would observe that your advisor has made as much money as you have from the investments. 

    So, based on the limited information you have provided, I'd be looking at dumping the advisor and self-infesting in one or two of the mainstream funds that are regularly discussed on here. Unless your current funds are very focussed then you definitely don't need 18 of them. Start by looking at passive global trackers. It's easier and cheaper than ever to invest yourself and save all those advisor fees. And there is plenty of help on here and other forums. Just ask.
  • Albermarle
    Albermarle Posts: 27,909 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    I could ask the question another way. Would anyone commenting here be comfortable in a 5.74% return over 5.5 years and is that a realistic return over that period considering the impact of certain world events.

    The key question here is what you told the IFA when the portfolio was set up. Did you say for example that you wanted low risk funds as you have a low risk tolerance. Or did you say you were looking for growth even if that came with some risks. If it was the former, than the low return over 5 years would be more understandable. 

  • You've paid your IFA more than you've made?

    This is why fees matter.
  • cleverdic said:
    Some helpful comments here. Yes I did believe over 5 years was a fair time to make an assessment. Clearly I need to think longer term. I've looked at my fund portfolio and I see 18 funds made up of 35% identified as UK funds,  22% identified as Global and the remaining funds spread around the world including the UK and the US.

    To make my position clear though, I am only trying to ascertain whether a return of 5.74% is reasonable when comparing with other balanced portfolios. Of course I am exposed to the real world but so are the other funds. I am not looking for a quick buck but I did anticipate slow and sustained steady growth with a bumpy road at times. I've seen my portfolio lose 20% in a week and vice versa, seen it steadily rise to recover. 

    I could ask the question another way. Would anyone commenting here be comfortable in a 5.74% return over 5.5 years and is that a realistic return over that period considering the impact of certain world events. 
    We will need to know the funds or at least the asset allocation in more detail to understand the returns.

    To answer your final question - no I would not be satisfied with 5.74% cumulative return over 5 years, but I'm not you and my portfolio is designed to be inexpensive and hold a large percentage of equities. Bonds have had a bad couple of years thanks to interest rate increases and Liz Truss so if you have a lot of them your portfolio will have suffered.

    I'll also say that any advisor who comes up with 18 funds is "having a laugh". There's no need for that many.
    Probably trying to justify £6k in fees by spreading the investment over a bucket load of funds.
    The advisor will probably have paid for a research company to come up with the portfolio and there will be some analysis, assumptions and algorithms that balance risk and return to justify it. It also has the benefit for the advisor of making things seem complicated and some might also use that to justify their fees. Where these "professionally" developed portfolios fall down IMO that they try to wring out returns vs risk metrics from models that rely on historical data and assumptions when they'd better serve the client by making things simple and more obviously lined up with a drawdown strategy.
    And so we beat on, boats against the current, borne back ceaselessly into the past.
  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 17,609 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    edited 1 September 2023 at 9:06PM
    Aminatidi said:
    You've paid your IFA more than you've made?

    This is why fees matter.
    I don't think we know the op has an IFA 🤔

    They only seem to have referred to a Financial Advisor, being independent hasn't been mentioned.
  • boingy
    boingy Posts: 1,916 Forumite
    1,000 Posts Second Anniversary Name Dropper
    dunstonh said:.

    BTW, some of the comments in earlier posts reflect poor knowledge or bias.  So, be on guard.
    So as an Independent Financial Advisor you don't think you might be biased towards Independent Financial Advisors then? On this board I've seen you defend some shockingly bad advice from other IFA's. The OP's advisor has taken half the profits. Do you think that is reasonable?

    Everyone has a bias, even you. It's what makes us human.  
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