Brewin Dolphin investment

Jaco70

Eighteen months ago I invested some spare funds into a BD medium risk fund, via a financial advisor and taking his advice regarding risk level, investment company etc. It was my first foray into investments other than BTL property, so I am very green.

The money was from my limited company (120k) and I topped it up recently with 12k, which I intend to do each year if I’m able to.

I was originally offered the option of being able to log on at any time to check on how it was going, but was advised against this, as it can become a bit all consuming, and I agreed.

At my financial year end, six months into the investment, the value had dropped very slightly, which didn’t concern me. My plan is to invest long term, with the comfort blanket of the funds being accessible in 5 days (maybe 7, I’m not sure) in the event of the company needing cash.

I wondered how others have fared with these funds (specifically BD, but others as well). I looked at reviews on a checkatrade type site, but the replies tended to focus on service rather than returns. As I deal with a broker, service isn’t that important. 

dunstonh

I was originally offered the option of being able to log on at any time to check on how it was going, but was advised against this, as it can become a bit all consuming, and I agreed.

That is a fair comment as it can lead to inexperienced investors logging in daily and during negative periods, they often end up doing something silly.

I wondered how others have fared with these funds (specifically BD, but others as well).

BD do multiple portfolios.  I am not a fan as I think they are too expensive but investing is largely about opinion.

The money was from my limited company (120k) and I topped it up recently with 12k, which I intend to do each year if I’m able to.

What tax wrapper did you use? And what accountancy method do you use?  Limited companies often use offshore bonds rather than direct holdings (depending on on their accountancy method) as it can allow you to select when losses and gains get recorded in your books.

Jaco70

dunstonh said:

I was originally offered the option of being able to log on at any time to check on how it was going, but was advised against this, as it can become a bit all consuming, and I agreed.

That is a fair comment as it can lead to inexperienced investors logging in daily and during negative periods, they often end up doing something silly.

I wondered how others have fared with these funds (specifically BD, but others as well).

BD do multiple portfolios.  I am not a fan as I think they are too expensive but investing is largely about opinion.

The money was from my limited company (120k) and I topped it up recently with 12k, which I intend to do each year if I’m able to.

What tax wrapper did you use? And what accountancy method do you use?  Limited companies often use offshore bonds rather than direct holdings (depending on on their accountancy method) as it can allow you to select when losses and gains get recorded in your books.

Thanks for the answers to Q1 and Q2. I’m not sure what portfolio we have, as I keep the paperwork in my office and I’m off for xmas. I remember my broker offered a risk range of 1 to 7 (7 most risky) and we chose 5 on his advice. I remember that two thirds of the total was in shares (which surprised me, as I thought it would be 100 percent), some in government bonds and 5% in cash (which sounded counterintuitive to me, but is apparently normal). Also, I recall that no more than 4% was invested in any one stock.

Sorry I don’t understand Q3. I have no idea what Tax Wrapper means. We use a cash accounting system, and our accountant produces annual small company accounts. It is a stand alone company at this point, although we have considered a holding company, but decided the balance sheet doesn’t warrant this at present. 

tacpot12

Is the money that you have invested yours, or is it your company's? It sounds like the money is still owned by the company (as you mention a financial year end), in which case it won't have any sort of tax wrapper around it. If the money is yours, it could be in an ISA or a Pension (which are the tax wrappers that dunstonh refers to) or it could be held outside of a tax wrapper (usually in an account that is referred to as a General Investment Account or GIA). 

dunstonh

It sounds like the money is still owned by the company (as you mention a financial year end), in which case it won't have any sort of tax wrapper around it

The offshore bond wrapper is often used with companies for tax reasons.  It gives more control over when to update the book value into the accounts of the business and when the tax is to be paid.  It sounds like the OP is using a GIA though.

Jaco70

It’s all limited company money. Surplus funds that were earning no interest in our current account. 

Bostonerimus1

There seems to be a bit of confusion here over whether this is personal money or company money, which is obviously a critical distinction. That will also determine the appropriate tax wrapper/structure for the money and investments. Then we come to how the money is invested and the OP has little to no knowledge of this which is a big red flat IMO and from what I've seen BD funds look to be quite expensive and would not be my choice.

So the OP needs to clarify ownership of the money, the investment tax structures used and the asset allocation of the funds.

dunstonh

There seems to be a bit of confusion here over whether this is personal money or company money, which is obviously a critical distinction. That will also determine the appropriate tax wrapper/structure for the money and investments.

For limited companies, putting aside pension for the director which will likely be the best option but result in the money leaving the company, the typical tax wrappers used for investments remaining in the limited company are offshore bond or GIA.   Offshore bond gives more control over when profits and losses can be recorded on the accounts.  Offshore bonds for corporates does not work in the same way as it does for personal.    

Jaco70

Bostonerimus1 said:

There seems to be a bit of confusion here over whether this is personal money or company money, which is obviously a critical distinction. That will also determine the appropriate tax wrapper/structure for the money and investments. Then we come to how the money is invested and the OP has little to no knowledge of this which is a big red flat IMO and from what I've seen BD funds look to be quite expensive and would not be my choice.

So the OP needs to clarify ownership of the money, the investment tax structures used and the asset allocation of the funds.

Sorry, I thought I’d clarified that. It’s ENTIRELY company money (from a limited construction company that I own the majority of the shares in), none of it is personal.

The advice regarding tax wrappers etc is all very interesting and informative, but my query was really about people’s experiences in investing in these funds. ie, whether the returns had been good for them, or not.

Please don’t say “investments can go down as well as up”, because I understand that. It was just a purely speculative question regarding other people’s lived experiences, because I’m a virgin to this type of investment. 

Marquise

I retired in Sept 2021.  Outside of property assets, I had a pension with Scottish Widows (76% of my funds) and accumulated ISA savings (13% of my funds) as well as an amount of cash savings (11% of my funds).  I investigated many IFA’s and investment options to invest my pension with.   In the end I appointed a new IFA from Sands (now owned by Truly Independent).  Their recommendation was to invest both my pension and ISA’s into stocks and shares managed by Brewin and Dolphin.  I insisted I keep the cash element of my funds under my control as a “rainy day” fund, which I invested separately.   Both my SIPP and ISA were invested at risk profile of “Intermediary 4” (where the lowest risk is 1 and the highest risk is 7). The funds were allocated 52% equities, 29% bonds, 15% alternatives and 5% cash.  The portfolio took an immediate downturn primarily because of the onset of war in Ukraine and fallout energy price increases and supply concerns.  This downward trend was common across most stock market investments at the time.  However, unlike other investments which started to recover rapidly after a year or so, my portfolio continued to fall, stabilising at around -12% below initial investment value.   The worst two performance months were Sept 22 at -17.19% and 31st Oct 23 -16.95% so this heavy loss was prolonged.  Because the negative returns were so rapid and so bad, I took up part time work and so have never drawn down on the original investments, so the performance is easy to see.  The cumulative net performance over the entire 2.5-year investment period has been -5.31%with a -£39K shortfall of the original invested value for my SIPP and -£12K on my ISA, so an overall loss of £51K.  Annual fees were 2% for Brewin and 0.5% for my IFA.  This delayed recover and lack of any obvious indications that my portfolio would regain and surpass original investment values and recognising that other funds are performing far better lead me to re-assess and I have now changed provider to Kelland’s and will utilise their higher performing portfolios to recover my losses, rather than “wait and hope” with Brewin.  I have also decided to not invest my ISA’s in the stock market – a learning from this “horror show” of an investment.  I will utilise the 5% Cash ISA rates for the foreseeable future, until I am confident in the next stint of stock market investments delivering a positive return and hopefully recouping my losses with Brewin.

Below is the investment performance - looks horrible doesn't it!  I'm philosophical and will make the losses up with improved performance and lower fees.  

Hope this helps.

dunstonh

Below is the investment performance - looks horrible doesn't it!  I'm philosophical and will make the losses up with improved performance and lower fees.  

To be honest, they look in line with any portfolio that had a fairly large chunk in gilts.

The portfolio took an immediate downturn primarily because of the onset of war in Ukraine and fallout energy price increases and supply concerns.  This downward trend was common across most stock market investments at the time.

No it wasn't.   It was bonds that suffered in that period.  Not equities.  in 2022, equities were down around 8%.  Bonds fell around 16% (having been negative in 2021 as well).   Gilts fell up to 40%.

However, unlike other investments which started to recover rapidly after a year or so, my portfolio continued to fall, stabilising at around -12% below initial investment value.   

Portfolios heavier in equities recovered much quicker.  portfolios with bonds have been dragging that anchor until recently.

  Annual fees were 2% for Brewin and 0.5% for my IFA. 

in this day and age that is not on.  I just completed a case today where the total ongoing costs including IFA charge were 0.83.    Your IFA charge is fine but Brewin is taking the P.

 I have also decided to not invest my ISA’s in the stock market – a learning from this “horror show” of an investment. 

So, because the investments that are not in the stockmarket have done badly and the investments that are in the stockmarket have done very well, you have chosen not to invest in the stockmarket?