🤔 Financial Planner or No Financial Planner? 🤔

Manchester2024

Hello All 👋 

I recently met with a financial planner after only ever saving in standard current/reward accounts in my life (I’m in my early 30’s. They offered a 3% fee on investments. 

I’m currently saving around £2000 per month and have savings of about £150,000 that I want to do more with. I do need to spend about £70k of that in the next 12 months. 

I’ve always been a bit risk-averse and scared of stocks and shares investments. Although I’m coming round to the suggestion that keeping my money ‘safe’ is also a risk after some research. 

I also don’t always have time/knowledge to constantly research the best options for my money, with having a young family. I know things depends on my financial goals, which at the moment is to simply help my money to do more with as little of what I deem to be ‘risk’ as possible. 

I would love to hear people’s thoughts on whether I should just go with a financial planner or try to do things myself?!

thanks 😊

Manchester2024

Manchester2024 said:

Hello All 👋 

I recently met with a financial planner after only ever saving in standard current/reward accounts in my life (I’m in my early 30’s. They offered a 3% fee on investments. 

I’m currently saving around £2000 per month and have savings of about £150,000 that I want to do more with. I do need to spend about £70k of that in the next 12 months. 

I’ve always been a bit risk-averse and scared of stocks and shares investments. Although I’m coming round to the suggestion that keeping my money ‘safe’ is also a risk after some research. 

I also don’t always have time/knowledge to constantly research the best options for my money, with having a young family. I know things depends on my financial goals, which at the moment is to simply help my money to do more with as little of what I deem to be ‘risk’ as possible. 

I would love to hear people’s thoughts on whether I should just go with a financial planner or try to do things myself?!

thanks 😊

To add - I’ve recently moved house and have a £250k mortgage that I could attempt to regularly overpay?

chile_paul2

My personal view is that 3% is a huge amount to pay for a financial planner especially if your circumstances are reasonably straight-forward. 

Over the long term you can expect to realise 7% from investments in the stock market, but if you then pay 3% of your investment to your planner, you are only making 4% - which is more or less what you should be earning in cash savings.

It is now very easy to invest in simple, low-cost, tracker funds yourself.

I'd recommend reading this article from The Escape Artist and then exploring some of the links to his other articles in the same article. I've found his articles really easy to read and inspiring!

https://theescapeartist.me/2023/11/12/its-as-simple-to-invest-your-own-portfolio-as-it-is-to-run-an-online-bank-account/

masonic

HOW MUCH???!!!! Is that 3% of £150k, i.e. £4,500?

Manchester2024

Lmasonic said:

HOW MUCH???!!!! Is that 3% of £150k, i.e. £4,500?

They didn’t suggest an exact investment amount but suggested a 3% fee for around £50,000+. It’s confusing because they had tons of positive client reviews online 

masonic

Manchester2024 said:

Lmasonic said:

HOW MUCH???!!!! Is that 3% of £150k, i.e. £4,500?

They didn’t suggest an exact investment amount but suggested a 3% fee for around £50,000+. It’s confusing because they had tons of positive client reviews online 

Reviews are only as reliable as the people making them. If you don't know them and their financial acumen, then they may just be easily impressed or have no Idea that a typical fee is around half what this planner charges. Have you considered approaching an Independent Financial Adviser instead? That would be the third way beside the expensive financial planner and low cost DIY options. A fourth option is using a robo-platform, which uses a risk tolerance questionnaire to pick an appropriate portfolio from a set of options and can be useful for smaller amounts where an adviser isn't competitive on price.

aphecs

If you are risk averse then possibly avoid stocks for now but as a minimum max out your cash ISAs. If you have a partner get them to max out theirs too. You can tuck away 40k at 5% which is over £150pm with capital protected. It allows you to use the 70k and then come april top up both ISAs (if possible) and take in £300pm, again capital protected. 

While you are earning money for nothing you could swot up on financial investments or do more research into options.

The planner would charge you min £1500 which you will immediately lose but then you will be taking on the risk of losing capital plus have exit fees etc if you want to liquidate any positions. Just my 2p

Bigwheels1111

Ouch, f that 3%.
Most of the comments on her say over pay your pension.
Only have a state pension so don’t understand why.
Except for tax purposes. ie the gov ads 20% to what you put in.

Bazzalona13295

Manchester2024 said:

Hello All 👋 

I recently met with a financial planner after only ever saving in standard current/reward accounts in my life (I’m in my early 30’s. They offered a 3% fee on investments. 

I’m currently saving around £2000 per month and have savings of about £150,000 that I want to do more with. I do need to spend about £70k of that in the next 12 months. 

I’ve always been a bit risk-averse and scared of stocks and shares investments. Although I’m coming round to the suggestion that keeping my money ‘safe’ is also a risk after some research. 

I also don’t always have time/knowledge to constantly research the best options for my money, with having a young family. I know things depends on my financial goals, which at the moment is to simply help my money to do more with as little of what I deem to be ‘risk’ as possible. 

I would love to hear people’s thoughts on whether I should just go with a financial planner or try to do things myself?!

thanks 😊

My own personal opinion is that unless your finances/goals are very complicated I'd give financial planners a wide berth, especially with a 3% fee. 

If these investments fail will they give you 3%?
Enough said.

In 3 months time it will be a new tax year so you have the option of funding an ISA, not forgetting topping up this years. Depending on whether you have a partner that could/will maximise your tax free allowance at a stroke.

No, steer clear of planners. The only time I ever got involved I regretted immediately, particularly as I didn't really want to. Don't make the same mistake.

Veteransaver

I assume that isn't a 3% annual fee on the value of your investments? Or is it a one off set up fee to cover advice etc? If it's an annual fee then that is huge.

Bostonerimus1

3% OMG....run a mile. You are doing ok just as you are. You seem sensible and frugal, so why do you "need to spend 70k". Before you pay someone to do something you can easily do yourself do some research and learn about pensions, ISAs and the different types of investment funds you can buy inside those two wrappers.

Do you have a work place pension. If so you are probably already invested in "investment funds". Start by understanding your pension.