Vanguard 2030 Vs IFA?

hodd

^ I’m paying this via my limited account to get the corporation tax relief if that’s what you mean?

wjr4

If they are with Quilter, they are not IFAs, so you need to find an IFA.

Ibrahim5

I think of it like used car salesmen. If you go to an Audi dealership they can only sell you an Audi. An independent car salesman can sell you any used car. At the end of the day they are all still used car salesmen with similar characteristics.

dunstonh

I know IFAs have to gather all information first so can’t dive in and say what they’d change. They’re with Quilter, and the brochure makes the claim that the average retirement income with and without financial advice is £24,175 and £17,168 respectively. No source for this.

Quilter agents are FAs.  Not IFAs. Quilter agents retail the quilter platform and quilter funds.     IFAs are whole of market.

An IFA is primarily about doing the work for you and making sure your plans can be achieved or putting right any bad ideas you have.    They will also handle tax efficiency, and use multi-wrappers where necessary.    I would say the majority of my clients  value the hand holding/comfort and the focus on suitability above all else.

However, lets look at your choice....



The quilter FA won't have access to the funds you have mentioned or the ones I am about to.   Hence why you should't use FAs but make the choice between IFA and DIY.

A: is my preferred MPS (runs like the IFA version of lifestrategy but lower cost)
B: is Vanguard Lifestrategy 60% MPS version available to IFAs only
C is the Vanguard 2030 fund
D is the Vanguard Lifestrategy 60% OEIC.

Vanguard only launched the MPS versions in 2022, hence why there are just two years. But it was 2% higher than the VLS OEIC version at that time. So, if you employed an IFA of 0.50%, the bottom line may be more expensive because of the adviser charge, but they have options that you cannot utilise, which could lead to better outcomes.  And if you get all the support, planning/modelling, methodology etc then you can more or less sit back and let the adviser do their job.

IFAs are not about investment returns.  They are not investment managers.   Suitability is the primary objective.   you could get the same returns as my preferred portfolio without using an IFA.     You cannot use the same MPS but you could use the same portfolio build.  But you would need to know what you are doing (and there are posters here that do and posters here that don't).

As IFAs are the whole of the market, they can use more than the FA you are speaking to at the moment.   If you don't value an IFA's service, don't use one.  An IFA doesn't want clients who don't see value in what they do.

Its also worth noting from a regulatory point of view, that it is a mandatory requirement for an advsier to make you aware of their status and any limitations they have.   Your fact that you think your FA is an IFA suggests that has not happened. 

Ibrahim5

FAs normally have access to a good range of funds. Your Audi salesman can only sell you an Audi so he has to sell you an A6 if you ask for a large luxury saloon. An IFA may say a BMW 5 series is better but there isn't much in it. That's why so many people are happy with SJP. An IFA can charge twice the fees of an FA. There's nothing stopping that. It seems a bit unfair that a team of IFAs sit on MSE criticising FAs when they are often providing a very similar service. The IFAs may criticize the FAs but retiring IFAs are happy to throw their customers under the bus when they retire and sell their customers to FAs for a large fee.

DT2001

If you are planning to retire to Asia what are the tax implications. Maybe you need to talk to your accountant first especially if you will continue to work part time when overseas/non resident? Are you better leaving funds in the company or putting into your pension?

I use an IFA, I do not expect him to get better returns than I did in the past (as I took bigger risks than are appropriate now) however I wanted a plan to reach a specific goal. He provided that and I am now in a position where my OH can retire any time she wants to. If anyone wants to increase their returns they need to do lots of research and minimise costs (or be lucky) whilst balancing risks.

hodd

^^ Thanks, Dunstonh.

In this adviser’s defence, he did briefly state there was a difference between an IFA and a Quilter adviser. It’s my error to use the term IFA.

I think the conclusion of the above is it pays to shop around. For those fees, I’d be after an IFA.

It’s also a small thing, but in life in general we may get judged by minor comments. He had a lot to get through, and he chose to point out the £24175 (with advice) Vs £17168 (without advice) section in his brochure without any sort of explanation which was disappointing. 

AlanP_2

@dunstonh - quick question if you don't mind:


I've seen you refer to MPS a few times and wondered what it meant please?


Thanks

hodd

DT2001 said:

If you are planning to retire to Asia what are the tax implications. Maybe you need to talk to your accountant first especially if you will continue to work part time when overseas/non resident? Are you better leaving funds in the company or putting into your pension?

I’m a contractor and have no employees. It suits me to work through a limited company as the taxes/NI are lower than the alternative. Isn’t one of the few advantages left of a limited company the fact it can be used to pay into a pension and save on corporation tax?

I don’t usually keep much in my limited company bank account. I pay myself a low salary and withdraw the expenses that I can. It’s costly in accounting fees to have a limited company, and I’ll be happy to close it when I retire. 

But it sounds like you’re suggesting keeping money in the business as an alternative to putting it into a pension. Surely the money won’t grow in a business account? Could you expand on this, please?

zagfles

dunstonh said:

I know IFAs have to gather all information first so can’t dive in and say what they’d change. They’re with Quilter, and the brochure makes the claim that the average retirement income with and without financial advice is £24,175 and £17,168 respectively. No source for this.

Quilter agents are FAs.  Not IFAs. Quilter agents retail the quilter platform and quilter funds.     IFAs are whole of market.

An IFA is primarily about doing the work for you and making sure your plans can be achieved or putting right any bad ideas you have.    They will also handle tax efficiency, and use multi-wrappers where necessary.    I would say the majority of my clients  value the hand holding/comfort and the focus on suitability above all else.

However, lets look at your choice....



The quilter FA won't have access to the funds you have mentioned or the ones I am about to.   Hence why you should't use FAs but make the choice between IFA and DIY.

A: is my preferred MPS (runs like the IFA version of lifestrategy but lower cost)
B: is Vanguard Lifestrategy 60% MPS version available to IFAs only
C is the Vanguard 2030 fund
D is the Vanguard Lifestrategy 60% OEIC.

Vanguard only launched the MPS versions in 2022, hence why there are just two years. But it was 2% higher than the VLS OEIC version at that time. So, if you employed an IFA of 0.50%, the bottom line may be more expensive because of the adviser charge, but they have options that you cannot utilise, which could lead to better outcomes.  

Or it could lead to worse outcomes. There seem to be two version of the VLS MPS funds, the classic which "mirrors" and so has the same UK bias as the normal retail versions and the Global which is more like a pure tracker and based on market cap. So what are you comparing? 

The charges look the same as the retail version, so can only assume the difference is because you're comparing the global MPS one with the retail one, ie comparing a market-cap fund with a UK bias fund. So UK equities didn't do as well as global equities in that period. Is that what it's really down to, rather than your implication it's because IFAs can get better performing funds? 

Recently UK equities have done better than global equities, if that continues the retail version may do better than the MPS global, so you'd lose twice if you're also having an IFA cream off 0.5% or more...

Vanguard launches Lifestrategy model portfolios - FTAdviser