🤔 Financial Planner or No Financial Planner? 🤔

JohnWinder

They offered a 3% fee...

That's a new meaning on 'offered' to me; 'requested'?

Whether you use an advisor or not, you owe it to yourself to get a bit familiar with the landscape, if only to remove yourself from the 'lambs to the slaughter' group. 

Two books ought to help considerably, and they're likely in your local library:

How to fund the life you want. Robin Powell. Broad in scope for younger people. Likely the one for you, but check the table of contents.
Smarter investing. Tim Hale. More specific, and detailed.

UncleK

3%! You get better rates from criminals!

El_Torro

Yes, yes, 3% is a lot. I believe what the Financial Planner was proposing was a 3% one off fee though, not annual fee. The annual fee would surely be lower than this, including platform charge, fund charges and advisor's charges. I don't know this for a fact of course, though if it is 3% annually that makes even St James Place look cheap!

Yes, you can do it cheaper yourself. Investing successfully doesn't have to be complicated, as long as you follow some rules. Like with many things though you do need to be actually interested in learning about the subject and you also have to have the right mindset. For example not selling up and moving it all to cash when your investments take a big dip. 

One option would be to shop around and find an IFA who maybe doesn't charge so much upfront. You'll never find an IFA who charges you less than managing it yourself though.

Albermarle

Any regular reader of this forum would presume the 3% is the initial fee only. It is a typical figure for smaller amounts. Probably for £150K + it would be a bit less. Then there would be annual fees to cover the advisor fee, platform fee and investment charges. Typically from 1 to 1.8%.

OP - You have not mentioned your pension situation, presumably if you are working that you have one?
If you want to invest long term for retirement, investing via a pension is usually the best bet . 

Normally some blend of cash savings, medium term investments, pension and overpaying the mortgage is the solution. The % for each will depend on personal circumstances, age, type of job etc.

london21

3% fees is a red flag I invest in lower cost index funds and fees are minimal.

There are savings account paying 5%+ can put it in that if you do not want to take risk. Spread with the 85k protection.

 

 

 

 

dunstonh

3% fees is a red flag I invest in lower cost index funds and fees are minimal.

The two things are not related.

3%! You get better rates from criminals!

On the amount being quoted, I wouldn't take issue with 3%.  Its more than what I charge but its certainly not at the level you suggest.

LHW99

Find out what you already have (make a list / excel sheet).

Mark up whether they are cash-type or stock / shares (work pension will almost certainly be the latter).

Look at whether they are ISA's or standard taxable accounts, and what interest rates / access conditions.

Then consider - 

can you increase your pension contributions? Get more tax relief, maybe get more employer contribution?

have you taken out a LISA - get a government bonus, and be able to access it for retirement from 60 (currently)?

can you swap taxable savings into a cash ISA at a similar / better rate?

can you fix some part(s) of your cash savings at longer access intervals to increase the interest rate?

Then read these forums, and some if the investing books / sites that are suggested, and think about whether you do need someone to help, either set it up for you or dela with both set-up and ongoing review.

boingy

The problem with a 3% up front cost is that your investment is starting on a losing footing. It's like starting a footy game a couple of goals down. You can still win but you have to catch up first.

RyanHello

You don't need any financial planner or advisor. The bar to qualify for a Financial advisor is quite low.
You can learn it all yourself. 

Read.
Learn.
Plan.

Albermarle

RyanHello said:

You don't need any financial planner or advisor. The bar to qualify for a Financial advisor is quite low.
You can learn it all yourself. 

Read.
Learn.
Plan.

I think it would be more accurate to say ' Some people do not really need a planner or advisor'

Many people are poor at :
Arithmetic, percentages etc 
Understanding of risk or probabilities
Handling money generally
Understanding tax issues.
Learning about boring and scary financial things.