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

Aminatidi

Do you have some kind of dashboard or portal or something that gives you even a basic breakdown of the asset allocation?

The whole 18 fund thing sounds worth looking into more but at a basic level I'd have thought if you know you're (say) 60/40 equities/bonds it may help you make a basic judgement whether you think you've got value for money for what you've paid v a cheap multi-asset fund.

Albermarle

Aminatidi said:

Do you have some kind of dashboard or portal or something that gives you even a basic breakdown of the asset allocation?

The whole 18 fund thing sounds worth looking into more but at a basic level I'd have thought if you know you're (say) 60/40 equities/bonds it may help you make a basic judgement whether you think you've got value for money for what you've paid v a cheap multi-asset fund.

OP - some figures based on the above comments, if it helps.
 Firstly medium risk covers a wide spectrum, and is not a hard and fast definition at all.

However a typical 60/40 ( 60% equities ) low cost multi asset fund has gained about 20% over the last 5 years
A 40/60 fund ( 40% equities) has gained about 11 % over the last 5 years.

Both results are after subtracting the typical fund fee of 0.2% pa, but do not take account of platform fees ( say 0.25% pa ) or of course any advisor fees. 

poppy10_2

InvesterJones said:

Did your advisor really tell you that shares were a good idea if you wanted to look at a 5.5yr time frame?!

If you are considering a longer term, why are you interested in how they perform in any given intervening period?

A simple global tracker would have been up over 42% over the same period. If the financial adviser is underperforming the market by such a massive margin over a five year period then it is a red warning sign to pull out your money. 
Most financial advisors who give investment advice  are charlatans. This guy is charging huge fees for such underperformance. And yet you suggest he sticks with him for the longer term. 

Notepad_Phil

cleverdic said:
...
The reason for this post is to gauge that, after 5.5 years, is a 5.74% return on a product sold as medium growth with risk standing up to other average, similar funds and sold to me as someone approaching retirement age (and now arrived!) So far, I am getting the sense that something has gone wrong that should have been brought to my attention sooner.

...

I wonder if this retirement age arrival has some bearing on the performance - did they say what would be different for someone approaching retirement age as opposed to another person who had a similar risk profile but was 20 years away from retirement?

Bostonerimus1

poppy10_2 said:

InvesterJones said:

Did your advisor really tell you that shares were a good idea if you wanted to look at a 5.5yr time frame?!

If you are considering a longer term, why are you interested in how they perform in any given intervening period?

A simple global tracker would have been up over 42% over the same period. If the financial adviser is underperforming the market by such a massive margin over a five year period then it is a red warning sign to pull out your money. 
Most financial advisors who give investment advice  are charlatans. This guy is charging huge fees for such underperformance. And yet you suggest he sticks with him for the longer term. 

A simple global tracker might not be appropriate for the OP and we need more information for us to see if their advisor's portfolio is under performing. Even a very broad indication of equity to bond asset ratio would help. They have mentioned "medium" growth so that implies some equities, but we need more to evaluate the performance.

JohnWinder

I’ll persist with my suggestion that you can sort this out better than we can, by yourself, and here’s a way…

Use the portfoliovisualizer website to back-test some different asset allocations. The ones to start with are those that might best suit your circumstances, eg start with 60% equities and 40% bonds; choosing broad categories eg global stocks and global bonds. Hit the ‘analyse’ button.

Ignore how good or bad the returns were, and focus on the standard deviation of returns,  the ‘worst year’ values and how many years they spent in the doldrums (or sinking) from the graph. Do this for different asset allocations until you find something that you feel might be comfortable for you into the future. Finally, compare the returns of the last 5 years for your ‘choice’ with the returns your advisor has achieved for you. But makes sure you use the same start/end dates in the comparison.

That won’t tell you whether you have a dud advisor; some already suspect that since you have 18 funds. But it might substantiate or refute your belief that your funds don’t ‘stack up’, you wrote.

Altior

There also often a perception gap, sometimes a person's own perception when tolerance to risk is gauged is different to their actual responses, ie they are more cautious than they believe. From what we have gleaned, this portfolio has a veneer of capital preservation. A global tracker of course has not insignificant currency risk, and if GBP to USD had moved in the opposite direction over the time period being compared, the comparison would look quite different. 

It's not clear why the OP is seeking growth from this capital after retirement, if they are not drawing down from it. Is it intended for passing wealth on after death, for example. 

For me, it would be the worst time to reverse out of bonds, the damage is done (personally I am pivoting in that direction, not away, of course a personal judgment). The bigger question is whether the cost of the advice is justified in of itself, given the relatively modest pot size. It's just going to chip away at the value of the portfolio at that level over time, regardless of the strength of the advice. Something like invest engine would achieve similar results at a fraction of the cost.

JohnWinder

the cost of the advice...It's just going to chip away at the value of the portfolio at that level over time,

Chip or chew? Reducing costs by 0.3%/year for assets that are growing isn't going to benefit you just 6% over 20 years; it's going to gain you the difference between 20 years of returns of 2.3%/year vs 2%/year, which is 15% of the gain.

Altior

Well, yes. I was stating it gently and don't wish to offend the OP in any way. We don't have full information, the OP could be hnw with the cash and property, but on the face of it, you don't need to pay for individually tailored advice at these levels. It doesn't quite tally though, is their entire wealth being assessed as part of the advice package, one wonders. If they have lumpy capital elsewhere (property, cash), then on the face of it, the equity/bond element could afford to be more risky.

It's really important to know what their intention is for this holding (as well as what it is invested in). As above, I suspect this is actually more along the lines of preservation, but the perception may be different. 

Aminatidi

4 pages and we still don't even know the asset allocation (or the exact 18 individual funds).

It would help.