Daintree Wealth Management experience

older_and_no_wiser

Has anyone any experience of Daintree Wealth Management? My girlfriend has had an initial free consultation with them to assess her current pension arrangements and they've made a recommendation that she's asked me to comment on before her final free follow up meeting with them today.

She currently has 2 workplace pensions (current and former employment) with a combined value of £108k). She's 55yo and told them she wants to retire in 10 years. 

They've said the funds they are invested in are higher risk  than her assessed FinaMetrica risk profile (hmm) . They've recommended transferring both into a single portfolio on AJ Bell's InvestCentre platform and within this opening an account managed by Raymond James Investment Services. This seemed a bit odd to me. 

They want her to transfer into the Daintree WM Discretionary Managed Growth or Balanced portfolio which looks like a global multi asset fund. However, both are 30%+ UK equities. 

They will charge an initial 1% fee to set the above up - plus the AJ Bell fees. Then 0.35% ongoing fee plus VAT plus fund and platform fees. 

I'm quite dubious about the recommendations and fees and believe that charging VAT means they aren't independent (?). 

Personally I don't think she needs this level of wealth management and based on my knowledge and my own experiences, I'm happy to give her suggestions and guidance which will be a lot cheaper for her and probably give better results! 

Any comments on the above would be most appreciated, especially around the Wealth Mgt company and their suggestions. 

artyboy

I don't know them but I don't see the word "Independent" mentioned on their website, so that's quite enough for me to get the bargepole out...

older_and_no_wiser

Looking at the portfolios on their website, they are charging just under 1% pa for each fund which appear to be made up of (mainly) Vanguard and iShares ETFs. 

tacpot12

FinaMetrica is a well known platform for Financial Advisers to survey clients for their risk appetite. I would not be concerned about them using FinaMetrica, but there is always the potential for advisors to place too much emphasis on the results of such analysis. As your partner is 10 years away from retirement, it is perhaps not unsurprising that her existing investments as more risky than they would advise at this point. 

How do you think your partner would feel if she took your advice and it didn't go very well, possibly due to a downturn around the point she retired? You can point out to her that investments that you suggest have return 0.35% less than those recommended by Daintree to acheive the same outcomes. 

The other think she needs to consider is how she is going to access her retirement savings. If she is going to draw down on them, then she is still looking at a 35-40 year time horizon, and taking greater risks might be necessary to ensure that her savings keep pace with inflation. 

Factoring in her state pension entitlement and any other pensions or income she would have in retirement should also inform her attitude to risk. 

LHW99

Is it advisable to tranfer a current workplace pension to another provider?

Her employer isn't likely to pay into anything other than their own scheme, and to do  a transfer out she may have to leave the scheme, and then re-opt in. That could mean her being out of the pension for several months?

Does she know what the charges are on her two schemes for comparison? If the current one is reasonable for charges, could she transfer the old one into the current?

There is likely to be more than one fund available in both pensions, so she could consider moving some or all of the money within one or both pensions to a different more cautious fund, if she feels that they are correct in her risk level.

Moonwolf

A good rule of thumb, although I'm guessing there might be exceptions, is avoid any company with "wealth management" in the name.

As a cynic and having visited the Daintree rainforest in Queensland and stayed in Port Douglas, I can imagine the owners are hoping to use income from you to pay for their next trip there.

dunstonh

They've said the funds they are invested in are higher risk  than her assessed FinaMetrica risk profile (hmm) 

Not unusual. People tend not to take much notice of their pension when younger.  So, default options tend to be high in equities.  However, as people get closer to retirement, they tend to take more interest, and the risk of another 40% drop before retirement leading to bad decision-making is quite high.      So, it's usual to lower the risk profile in the lead-up to retirement.

Unless you are hmming over the reference to FinaMetrica.  However, that wouldn't be right as they are one of the big guns when it comes to risk profiling.

They've recommended transferring both into a single portfolio on AJ Bell's InvestCentre platform and within this opening an account managed by Raymond James Investment Services. This seemed a bit odd to me. 

Nothing odd there.  The use of a platform and a DFM MPS is very common.   

They will charge an initial 1% fee to set the above up - plus the AJ Bell fees. Then 0.35% ongoing fee plus VAT plus fund and platform fees. 

VAT should not be charged.  HMRC confirmed that about 4 years ago that investment management fees are not VATable.   That should be a red flag if they are still doing it as it suggests they don't know the rules.

I'm quite dubious about the recommendations and fees and believe that charging VAT means they aren't independent (?). 

There is nothing dubious about the recommendation other than incorrect VAT handling.

Some DFMs will white label a portfolio to have the IFA's name on it.  The IFA will be on the investment committee and the DFM is there to make sure all the audit trails and due diligence stacks up.   

However, DFMs will also give white labelled portfolios mirroring their own portfolio.  These are often used by wealth management FAs who are not IFAs.

In the first meeting, it is mandatory for the adviser to provide details of their regulatory status.   IFAs make a point of saying so.   FAs will often try and gloss over it.    In the initial disclosure documents supplied (e.g. terms of business letter), it should state in their status.

There is no reference to IFA status on their website.    They appear wedded to RJI (in use of platform and investment solution.  So, I suspect they are a Wealth management FA.    (RJ's platform fee of 0.30% can be bettered.  The underlying funds fee suggests an active and passive mix.  The investment management fee is at the upper end of the scale and shouldn't have VAT).

A good rule of thumb, although I'm guessing there might be exceptions, is avoid any company with "wealth management" in the name.

There are exceptions.  I used to say that same as you but it was pointed out to me that some IFA firms have used that term for decades before it got hijacked by the expensive firms whose sole aim is to hoover up as much as possible before selling up.

older_and_no_wiser

LHW99 said:

Is it advisable to tranfer a current workplace pension to another provider?

Her employer isn't likely to pay into anything other than their own scheme, and to do  a transfer out she may have to leave the scheme, and then re-opt in. That could mean her being out of the pension for several months?

Does she know what the charges are on her two schemes for comparison? If the current one is reasonable for charges, could she transfer the old one into the current?

There is likely to be more than one fund available in both pensions, so she could consider moving some or all of the money within one or both pensions to a different more cautious fund, if she feels that they are correct in her risk level.

I would hope the "transfer" into another SIPP would be just to move what's currently in there every so often and that her employer continues to contribute to the standard workplace fund. That's how I've arranged my own pension.

penners324

older_and_no_wiser said:

LHW99 said:

Is it advisable to tranfer a current workplace pension to another provider?

Her employer isn't likely to pay into anything other than their own scheme, and to do  a transfer out she may have to leave the scheme, and then re-opt in. That could mean her being out of the pension for several months?

Does she know what the charges are on her two schemes for comparison? If the current one is reasonable for charges, could she transfer the old one into the current?

There is likely to be more than one fund available in both pensions, so she could consider moving some or all of the money within one or both pensions to a different more cautious fund, if she feels that they are correct in her risk level.

I would hope the "transfer" into another SIPP would be just to move what's currently in there every so often and that her employer continues to contribute to the standard workplace fund. That's how I've arranged my own pension.

Many auto enrollment pensions don't allow this.

Albermarle

In general the advice given seems pretty normal and the costs are not obviously excessive, although if they really are charging 1% just for the funds that would be high. On the other hand 1 % initial and 0.35% ongoing is on the low side for a fund size of £100K .
Of course she can do it cheaper herself, if she wants to. 
They want her to transfer into the Daintree WM Discretionary Managed Growth or Balanced portfolio which looks like a global multi asset fund. However, both are 30%+ UK equities. 

There is a bit of a trend back into UK equities and being cautious about being too exposed to the US. AJ Bells own multi asset funds have a similar level of UK equities, although many would see 30% as too high.

older_and_no_wiser

Thank you so much for all the useful feedback. 

I have fed back all the comments - which my girlfriend has raised with the wealth management company. 

They are not independent and have said the VAT issue is being discussed with HMRC currently. 

The UK biase with funds seemed to be answered by some "we are globally diversified" answer and talk of how many companies they invest in which limits any downturn. This doesn't really answer the question in my opinion.

I did say that it isn't necessary for her to use a FA and this can easily be managed as DIY with a broader multi asset fund. However, she says that she doesn't have the time or inclination to do this. She's also worried about making wrong decisions and doesn't want me to advise as she fears it could spoil our relationship. This was mentioned by someone above and I fully respect that decision.

I would really like my girlfriend to speak to a proper independent FA now who would charge less than the one she's seen and hopefully have investment plans more aligned to those who frequent this forum (or mine haha) if she's determined to go down this route.

Am I allowed to ask this forum for suggestions on IFAs that could meet this criteria (North Manchester area) or is this forbidden? If so, are there any directories online I can check for this? Knowing my girlfriend, she won't want an endless stream of meetings with multiple companies as this would drive her crazy! Personally, I would love this though. :-)

Perhaps someone could PM me with suggestions if we can't post here? 

Thanks again.