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

Albermarle

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 global tracker is too high risk/volatility for the majority of the investing/pension population. Especially for those nearing retirement and stating they want medium risk investments.

In any case, as discussed numerous times on this forum, you do not pay an advisor to beat the market. 
That is totally misunderstanding their function.

However I think it is fair to say that based on the info supplied in the OP's case, the returns do seem low, the number of funds excessive, and the fees high.

DavidT67

Aminatidi said:

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

It would help.

Nor whom the financial advisor is...  SJP or TP, maybe !?

Aminatidi

DavidT67 said:

Aminatidi said:

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

It would help.

Nor whom the financial advisor is...  SJP or TP, maybe !?

Perhaps but I think that's secondary right now.

If the funds cleverdic is in are the equivalent to LS20 or a cautious fund that's really bond heavy the returns themselves may not be too far out of line with what you might expect.

I imagine seeing that £6K that's gone to the IFA doesn't help as that's a very visible number.

Sea_Shell

Does a portfolio ever need to be spread across 18 funds to get the spread/diversity one might like (require)?

Is there an optimum number that can "do the job" without lots of overlap?

Somewhere between 1 and 18 😉 ?

dunstonh

Does a portfolio ever need to be spread across 18 funds to get the spread/diversity one might like (require)?

Yes.     And is worth noting that VLS60 has 17 funds.  So, all those posting that using 18 funds is bad investing are effectively saying that Vanguard Lifestrategy funds are bad as well.

it all boils down to your portfolio build/strategy. If a core and satellite approach strategy is being used, then that could go to 18.   Higher risk portfolios may introduce increased weightings to small cos or targeted areas and that will increase the number.   Bucketing your portfolio can utilise more funds as you are looking at time weighted investing and the assets will need to vary between the time periods.     Yielding strategy will also often have more funds if you aim to have distribution dates covering all 12 months.

And larger portfolios may want to use more funds purely for increased FSCS protection and potential liquidity.  

If you look at VLS60, it has 10 funds covering fixed interest securities. and 7 covering equities.   

sevenhills

Albermarle said:

A global tracker is too high risk/volatility for the majority of the investing/pension population. Especially for those nearing retirement and stating they want medium risk investments.

Just trying to find one to see how volatile they are, this one only goes 5 years back. Less volatile than the FTSE?

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/f/fidelity-index-world-class-p-accumulation/charts

Aminatidi

Problem is the last couple of years bonds did something a lot of people (me included) haven't seen before so weren't used to bonds doing.

People expect (or should expect) equities to be volatile.

A lot of people don't expect that from their nice "safe" bond allocation.

Sea_Shell

dunstonh said:

Does a portfolio ever need to be spread across 18 funds to get the spread/diversity one might like (require)?

Yes.     And is worth noting that VLS60 has 17 funds.  So, all those posting that using 18 funds is bad investing are effectively saying that Vanguard Lifestrategy funds are bad as well.

it all boils down to your portfolio build/strategy. A core and satellite approach strategy is being used, then that could go to 18.   Higher risk portfolios may introduce increased weightings to small cos or targeted areas and that will increase the number.   Bucketing your portfolio can utilise more funds as you are looking at time weighted investing and the assets will need to vary between the time periods.     Yielding strategy will also often have more funds if you aim to have distribution dates covering all 12 months.

And larger portfolios may want to use more funds purely for increased FSCS protection and potential liquidity.  

If you look at VLS60, it has 10 funds covering fixed interest securities. and 7 covering equities.   

I think you probably knew what I meant 😉 

I was thinking of a named fund as a single fund (with a given price), even if it's a "fund of funds" under the skin.

cleverdic

Aminatidi said:

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

It would help.

I think I'm not explaining myself well enough. Firstly my IFA works for a financial company that offers a portfolio service actively managing funds on my behalf. My IFA doesn't actually allocate the funds. That is done by advisors in the company that should analyse and understand the market at any given time. I can see my funds on an online platform and can use a tool like Trustnet to go and look at the history of each of the 18 funds. Up to now, I have never investigated any of these funds. The reason is that, as I am not knowledgeable at all about fund investing, I engaged a professional to invest on my behalf.

I prefer not to share the funds in this discussion as I am not seeking a critique on what has been chosen. I understand the desire to know the makeup of the funds but I am really dealing in generalities by trying to gauge the expected performance of our fund sold to us as medium growth with risk against other funds offered in similar circumstances. I was happy with the risk profile as this investment was only typically around 25% of our cash/property/investment portfolio. In summary I am really asking whether I am getting value for money.

I really appreciate the discussion around the original question but If I was to ask the question again, and based on the feedback so far, it would be this.

"Coming up to retirement, I engaged an IFA to make an investment of £100K that is being managed actively on my behalf. I fully understood I was investing in a basket of funds that should offer medium growth with some risk. After 5.5 years, and now fully retired, the fund has only gained 5.74% over that period. I have been charged £6K for that service. Does this represent a typical return over that period. Should I start looking at baling out and looking at alternatives."

inflationbuster

Pull out.  Your return is dire.