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Worth using a Discretionary Fund Manager?

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2

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  • Alexland
    Alexland Posts: 10,183 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    edited 26 June 2024 at 3:30PM
    You will have to assess the suitability for yourself but I am also a fan of the HSBC GS multi-asset series particularly the Balanced version which offers a good blend of equities and bonds. It might still drop around 30% in a bad stock market crash. Hopefully you will build up some gains before that happens but you never know something might go wrong in the world the day after you invest.

    I am also a fan of iWeb as a basic but inexpensive platform with no ongoing charge owned by Halifax (Lloyds Banking Group) who as we know are too important to be allowed to fail (again...). If you do not need the income then go for the Accumulation version of the fund to avoid you needing to pay iWeb extra £5 trades to reinvest distributions/dividends. You could just pay £5 each once and not pay them again for years until you need to sell some/all the fund units.
  • Eyeful
    Eyeful Posts: 938 Forumite
    Fourth Anniversary 500 Posts Name Dropper
    edited 26 June 2024 at 4:28PM
    Alexland I agree, that's why at point 5 I suggests a Global Multi Asset Fund,
    With these when they buy them, they could chose to go in at  the cautious level with that level of bonds & shares as explained in the video of point 4.

     If they do not want to hold the investment for at least 10 year, then they should just stick to a cash ISA & not invest at all.         
  • Alexland
    Alexland Posts: 10,183 Forumite
    10,000 Posts Seventh Anniversary Photogenic Name Dropper
    edited 26 June 2024 at 5:34PM
    Eyeful said:
    Alexland I agree, that's why at point 5 I suggests a Global Multi Asset Fund,
    Aah sorry I misunderstood what you intended with a "passive Global Multi Asset Index Fund or ETF" because of course a multi-asset fund is in itsself neither passive or would track an index. I now understand you mean a multi asset fund that contains index trackers so yes we are in agreement.
    Eyeful said:
    With these when they buy them, they could chose to go in at  the cautious level with that level of bonds & shares as explained in the video of point 4.
    Is there much point with going a cautious multi-asset fund at the moment when it's possible to get similar likely returns from simply holding cash savings?

    Market outlook for cash rates is that they will remain at similar levels to current even if they do drop a little. I don't see how a cautious fund would be likely to outperform either cash or money market rates unless interest rates dropped materially again but then could underperform if rates increased. It would be more of a bet on the future direction of rates.

    If investing and taking a conscious decision to accept risk and volatility for the possibility of a better return than cash there doesn't seem much point going for anything lower than balanced risk level.

  • Eyeful
    Eyeful Posts: 938 Forumite
    Fourth Anniversary 500 Posts Name Dropper
    The OP say they are "very cautious" and seem to not know about investing. So the cautious level, seems to me might be what they might be happy with, to get them into investing rather than just saving. They can always later change the level of share/bond split if they so wish.
  • Albermarle
    Albermarle Posts: 27,779 Forumite
    10,000 Posts Seventh Anniversary Name Dropper
    I would describe myself as very cautious just now, 

    OP- You need to think about your attitude to risk in more depth.

    In the world of investing being too cautious is a risk in itself, especially if you are investing for the long term.

    Avoiding high risk options is fine if you are not that way inclined. The majority of individual investors tend to go for medium risk funds.

  • ChilliBob
    ChilliBob Posts: 2,325 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper
    eskbanker said:
    ChilliBob said:
    For a cheap and no frills platform I'd say iweb might be good - £100 to open but nothing extra per year. Dealing costs are £5. So whilst year one cost may seem steep when averaged out over subsequent years it's very cost effective.
    No opening charges for quite a while now:
    Open a new account with IWeb between 1 September 2023 and 31 December 2024 and you’ll pay no account opening charge, that’s a saving of £100. Offer terms apply
    https://www.iweb-sharedealing.co.uk/
    Nice. I opened mine with no charge, they closed it (I'd ended up using II) so I opened one again when they did £100 cashback lol. That's a right result. I mean if you have a one find portfolio and just top it up once a year you'd only pay a fiver! Admittidly some may top up more frequently, in which case depending on pot size some others may work well instead. (See Monevator broker comparison!) 
  • ChilliBob
    ChilliBob Posts: 2,325 Forumite
    Fifth Anniversary 1,000 Posts Name Dropper
    I would describe myself as very cautious just now, 

    OP- You need to think about your attitude to risk in more depth.

    In the world of investing being too cautious is a risk in itself, especially if you are investing for the long term.

    Avoiding high risk options is fine if you are not that way inclined. The majority of individual investors tend to go for medium risk funds.

    This. 

    As bizarre as it sounds "I'm very cautious" and "I'm 100% cash". (as an example, not saying this is you) are two statements that don't really tally in the long term. 
  • Bostonerimus1
    Bostonerimus1 Posts: 1,396 Forumite
    1,000 Posts Second Anniversary Name Dropper
    OP I think you should be using your 40k to make extra pension contributions and maybe also fund an ISA. This will give you flexibility and withdrawal options and also be tax efficient. You don't need a DFM IMO and one would probably end up being expensive in fees. You can essentially get the services of a DFM by investing in one of the large number of multi-asset funds available from companies like Vanguard and HSBC etc. So take some time to educate you self about the basics of investing, don't make things more complicated than necessary; just learn about the tax advantages of pensions, SIPPs and ISAs and understand about the various types of investment funds available. Don't be tempted to think that you can pay for success or that complicated strategies and portfolios will necessarily  perform better than simple investments.
    And so we beat on, boats against the current, borne back ceaselessly into the past.
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