IFA fees

Qyburn

boingy said:

Albermarle said:

If you asked 100 people what a global equity index fund was, how many do you think would know? Five ? and maybe another five with a close guess. 

Or out of a 100 working adults, how many could explain how pension tax relief actually works? I would guess less than 10%.

What percentage of those 100 people have any significant money to invest?

A good proportion will have workplace pensions. Think how often people come on here with concerns about their pension's suitability, performance or cost. Generally they're virtually berated for not learning for themselves and exercising what control thy do have over the policy.

GeoffTF

MQA said:

I apprecaite all the comments, very interesting views and more food for thoughts for me..

Before I had my ex-IFA, I had one fund : Jupiter European Fund. My ex-IFA had chosen some of most these funds as a good spread using a platform.  Some funds was closing and the fund mangers had to buy different funds to replace them.

I am now thinking what to do next with my funds as it has acheived an average 5% return. I have read there are better platforms than Aegon and better fees. My challenge is

1.   when I will review the funds, shoild I comparing unit value by the original price to most recent price? how to decide whether to sell or keep? is it by how many percentage it had grown? or by fund mangement fee? or the reputation of the fund manager?

2.How to make the switch to another platform ? As I had looked previously and there is no single platform that I can do a direct transfer as they do not holds the same funds as I have so many.

3. As my funds do not seem to be making a loss ? does it make financial sense to leave it as it is? while I self study? 

4. What would be a return for medium and high risk, please?  What would be a managable number of funds? what would be the spread? ie 6 funds with  15 - 17% per fund? or would you have a higher percentage of one fund that you feel positive about ?

5. Pardon me, I have realised that income and capital growth is not same.  Previously, my ex-IFA was paying me an income from the funds and I  had asked it to be reinvested back to the funds.  I think I am getting a bit confuse with buy to let properties, which has a capital growth 9increase on the property value) and rental income. Earlier, I had not realised that there are captial growth in funds?? and as well as income? what I do not understand is without capital growth on the funds there will be no income ?  is that correct?  Whereas with the Property, even if the property value does not increase,if the rent is paid then there will be a rental income? 

I hope this make sense, look forward to your comments.

1. Funds that did well in the past are no more likely to do well in the future than those that did badly. Ignore past performance.
2. You either switch to funds that are widely supported or cash before transferring.
3. Funds often make a loss. Ignore that.
4. Return is a matter of chance. Nobody knows the future. You could make a lot of money or lose it all. You are more likely to lose a lot of money with high risk funds.
5. Funds can pay an income and grow in value. They can also pay income with no growth or a capital loss. What matters most is the total return, which is the capital growth that you would get if any income was reinvested.

LHW99

Qyburn said:

boingy said:

Albermarle said:

If you asked 100 people what a global equity index fund was, how many do you think would know? Five ? and maybe another five with a close guess. 

Or out of a 100 working adults, how many could explain how pension tax relief actually works? I would guess less than 10%.

What percentage of those 100 people have any significant money to invest?

A good proportion will have workplace pensions. Think how often people come on here with concerns about their pension's suitability, performance or cost. Generally they're virtually berated for not learning for themselves and exercising what control thy do have over the policy.

And the opposite of that is that "the best investors are the deceased" because they don't keep selling and buying things!

dunstonh

1. Any harm leaving the funds as they are (long term investments) and acheiving about 5% net after all the fund manager fees?

If you investments are with a DFM MPS then you cannot keep them if you end the ongoing servicing with the adviser.   

2. If the funds are providng a 5% return, would it be worth selling and buying the same / other funds with less management or platformfees? Is there a way to compare management and platform fees?

Its an active portfolio.  So, you wouldn't look to use the same funds.  Plus, if you are going DIY, then liquidity concerns that result in 30 funds would not apply to you.  Although you wouldn't get the institutional share class (many DFM MPS use the cheaper share class)..
Platform fees are typically easy to compare.

3. Sell them all and invest in no more than 10 funds? as there is no way to know what the value will be.

Why less than 10?    At the end of the day, you need the number you need.  If you are going to continue to self build a portfolio, you could find 10 is not enough. It may be 14, it may be 12.    (Mine has 11 and sometimes a 12th is in there).   Maybe you shouldn't self build and should stick with multi-asset?

GeoffTF

MQA said:

If the funds are providng a 5% return, would it be worth selling and buying the same / other funds with less management or platformfees? Is there a way to compare management and platform fees?

Nobody has any idea what investment returns will be over the next ten years. You are probably confusing current dividend payments with future total return. Being paid a big dividend is no good if the capital value shrinks away. Cheaper is better, but you do not have to fall over yourself making changes. Costs have to be disclosed. Compare the numbers.

MQA

Albermarle said:

MQA said:

Good to hear your thoughts. I was a bit surprised with their fees.

I am now thinking whether I can DIY? as finding an excellent IFA is not easy.. I need to know where to start), as the funds have  more a less stayed the same (some had been closed so the FM moved them to another). What is the expected return as so far it has been average about 5%?

Aegon is not ideal - also need to learn how to master the systems and about funds

The classic medium risk portfolio fund is 60% equities and 40% bonds .
Had a look at a couple of well known simple funds like this and from Jan1st 2020 ( just pre covid) they have grown about 17 to 20% . So about 5% pa .

i'd like to know how you know  / worked out how much they have grown and the percentage per annum, please?

Beddie

MQA said:

Albermarle said:

MQA said:

Good to hear your thoughts. I was a bit surprised with their fees.

I am now thinking whether I can DIY? as finding an excellent IFA is not easy.. I need to know where to start), as the funds have  more a less stayed the same (some had been closed so the FM moved them to another). What is the expected return as so far it has been average about 5%?

Aegon is not ideal - also need to learn how to master the systems and about funds

The classic medium risk portfolio fund is 60% equities and 40% bonds .
Had a look at a couple of well known simple funds like this and from Jan1st 2020 ( just pre covid) they have grown about 17 to 20% . So about 5% pa .

i'd like to know how you know  / worked out how much they have grown and the percentage per annum, please?

Look up some 60/40 type funds e.g. the ever popular:

https://www.trustnet.com/factsheets/O/G1HD/hsbc-global-strategy-balanced-portfolio-c-acc