IFA fees

MQA

RogerPensionGuy said:

I just spotted the link below today, think its old news, they are in the press a plenty lately, 80% and from my reading on average 90% of IFAs achieve a lesser outcome than just picking a low cost platform and pick 1 or more of the standard trackers of whatever you like.

I get that IFAs can make you feel warm and secure and help planning if a person needs it, but these last few years with nice easy low cost platforms, it looks to me like DIY will just keep growing and growing, the IFA has had a good long run in the old days, but its all different now.

***

 https://www.yodelar.com/st-jamess-place-fund-review?utm_term=sjp problems&utm_campaign=St+James's+Place&utm_source=adwords&utm_medium=ppc&hsa_src=g&hsa_acc=5476612764&hsa_grp=155146019196&hsa_tgt=kwd-2239987254212&hsa_ver=3&hsa_kw=sjp problems&hsa_cam=1865420087&hsa_mt=b&hsa_net=adwords&hsa_ad=678885912228&gad_source=1&gclid=CjwKCAjw88yxBhBWEiwA7cm6pbCK86qxojrvo7DxdS719e_-gvB0gEVnE-3UJMFWxDFyefLkzop7dxoCHicQAvD_BwE

Great to read your post.

MQA

boingy said:

30 funds!!!
Did the FA/IFA explain the purpose of each of those?

I was told 'good to have a spread.' Now thinking back I think I am paying more management fees.'

MQA

MX5huggy said:

I would get rid of them, they can’t answer a straight simple question. Are you an IFA? is one word answer. They have created a portfolio of 24 funds to make it look like they are doing something magic and amazing which you can’t do yourself. They aren’t they’re creating unnecessary complexity and the general effect is that your returns trend towards bang average minus the expensive fees. If you get bang average without the fees you beat them. 

Name the company then we can tell how they operate. 

You don’t seem to have enough knowledge currently to go DIY you can either invest your time and effort into learning (a couple of books, specific YouTube channels, websites and asking and reading and here, would be enough). Or find an IFA who can do this for you. 

I agree and, I feel much better for it.

I have reserved a copy of Tim Hale's investment book and will learn the termiology first. so I can work on my pension (is not doing well), after reading other posts, most people are doing very well! I have to catch up is time is zooming by and wish I can learn that fast. 

MQA

ColdIron said:

Why would you sell and buy new funds? I won't be selling anything until and if my circumstances and needs change

I was thinking of selling and buying, as I thought the return can be better than 5%, and then from the replies, I realised may be better if I reduce the number of funds I hold.

RogerPensionGuy

The link below mentions fees etc, it quotes a figure mention in a video I posted on this thread, this 1.9% is certainly sticking in my mind. 

I feel in a long stream of bumper years of markets going up generally, costs like 1.9% can be easily absorbed from all points of view, however in a longish period of depressed, low or dropping markets these costs may be won't look so reasonable. 

I'm aware IFAs, FAs & FPs do lots more that just cause a drag on performance, in fact overall stratagy and eeking out best net value for clients can be overlooked by some. 

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https://www.which.co.uk/money/investing/financial-advice/how-much-financial-advice-costs-aODa70J6nYs7

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!

MQA

GeoffTF said:

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.

Appreicate this.

MQA

Update, my fund valuation (yes, 30 funds, sigh 'too many') are bouncing back after a few years  (relieved). As  I have 10 years to invest I would like to know:

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

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?

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

Appreicate your comments.