IFA vs DIY

Cus

https://forums.moneysavingexpert.com/discussion/comment/81927329#Comment_81927329

The question @Bostonerimus1 is asking I believe is when did they return the portfolio to the previous asset balances after the crisis.

Edit to add: I suspect the underlying question is to query whether the IFA did further adjustments after the crisis, potentially if they didn't then as of today sitting tight and doing nothing might today be worth more.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81927329#Comment_81927329

Doh, yes 2022 was the "mini budget". The location of the funds after the sale of bonds is not mentioned so it could have gone into cash, gold, equities etc. So the question as to what happened next is still worth asking. Is the asset allocation still the same or have there been further adjustments as interest rates fell from their peak?

cfw1994

https://forums.moneysavingexpert.com/discussion/comment/81925615#Comment_81925615

Soma low-cost tracker is your answer. That’s fair enough, & kind of what Lars Kroijer espoused many years ago 👍

How do your cash savings make a lot of money?

Cash/PBs are a pretty low interest space these days 🧐

Ibrahim5

My wife can earn £6k of interest tax-free. She has loads of regular savings accounts earning 5 to 7+ % Interest. I borrow on 0% credit cards producing over 6% in total. No risk. The last person I met who used an IFA paying £ks a year for advice had £20k in their current account earning 0%. Of course IFA not interested. No fat fees in cash.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81927458#Comment_81927458

Lars Kroijer's youtube videos are informative and I agree with a lot of what he says. However, he's very late to the low cost tracker party. If you are hoping that an IFA will get you "superior returns" you have to decide whether or not they can over come their fee and I think that's a big ask. Of course there are other reasons to use an IFA and I think they are more important than hoping you can pay for investment return.

cfw1994

https://forums.moneysavingexpert.com/discussion/comment/81927597#Comment_81927597

You think that makes “a lot of money”?

Seriously?

We also have several regular savers….it’s hard to describe those as big earners: the biggest we have (& likely the biggest full stop) allows £300pcm for the year at 7#, but remember the last months deposit is only in for a month, so the interest at most makes £136.
Hardly touching her £6k allowance 🤷‍♂️

Stoozing against credit cards is fine, but again only earns what you can get against saving in interest account: tiny sums in the grand scheme of investing, I would say.

I'm no massive fan of IFAs, but it sounds to me like you might have benefitted from some advice over the years. Investing is way more than just regular savers. At least low cost trackers will be making some money for you, & is fair advice for many people.
Remind us why you are so anti-IFA? Was it a relatives poor experience many years ago?

Any recent experiences?

Presumably you stack £2,880 into your wife’s pension to get the 20% top-up there? That will outdo the regular savers for starters.

cfw1994

https://forums.moneysavingexpert.com/discussion/comment/81927652#Comment_81927652

Late to the party?

13 years ago he brought out his book!

I don’t think anyone should use an IFA hoping to “beat the market”. As you say, there should be other reasons to use one.
I have friends who use them, & frankly I think they and many people are simply scared (or perhaps disinterested) of managing “big sums”.
Which for some will be a fair reason to pass that to someone else.
No surprise, given the broad lack of financial education people get.

Personally I find it mildly insidious how “friendly” they have to get with those advisors: I always feel it should be viewed as a business relationship, but of course the industry prefers to make it personal: easier having a nice lunch and blinding people with arcane sounding views to keep the business, perhaps.

I do get pretty angry when companies pretend to be “Independant” and weasel their way into places.
A relative had their company bring in a FA firm. All very friendly and “free” advice. Wanted to take control of one pension pot they had, and blinded them with a 60+ page document.
I was a little involved (it was Covid and they had a zoom call I was able to join as a “wise sibling”).
When I read the document, towards the end the projections actually showed they expected to make LESS money than leaving it where it was 🤬
I won’t name names, but the initials were W@W….awful business, & no doubt will have got people on a hook with their approach.

Be curious about how your money works for you.

NormalNorman

https://forums.moneysavingexpert.com/discussion/comment/81927597#Comment_81927597

Just a different sort of risk.

I stopped doing fast stoozing cos if I cork it someone has to deal with all those organisations. I admit it get's addictive having someone else's money earning interest that is then contributed to the SIPPs for tax uplift and growth, stacking so to speak. Back then all these cards had cashback too with 0% fees. I think at one point I was funding every single high interest regular saver on the market. Oh and an offset mortgage too, lol!

If you get terminally ill suggest getting it all unwound immediately.

Please ensure all this is well documented in your files.

Cheers!

barnstar2077

https://forums.moneysavingexpert.com/discussion/comment/81927597#Comment_81927597

5 to 7% is an impressive return for savings accounts.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81927683#Comment_81927683

I'm in the US and trackers have been available here since the early 1970s and they arrived in the UK in the 1980s. Hence publishing a book on their use in 2010ish isn't very fast on the uptake. Most of my money was in trackers back in the early 1990s, but mostly because they were widely offered by my DC pension company, not from any great understanding about investing.

My money has been slacking for a few weeks now as I'm mostly still in equity trackers, but over the last 35 years I've averaged around 9% annual return and since I retired 12 years ago it's been almost 11%. That sort of DIY long term compounding with low costs and little effort is why I'm dubious about the utility of IFAs when it comes to investment returns. I'm happy to maintain a risky high equity allocation in retirement as my income comes from a DB pension and rent with SPs yet to start. If I was taking income from my investments I'd probably just take the natural yield from the portfolio and allow the capital gains to compound.