Investment Planning

masonic

The portfolio as a whole ought to be able to sustain it. It is a case of pulling from the right bucket to suit the conditions and rebalancing. Most financial planning targets an 80-85% success rate, especially if there is scope to reduce spending or earn if things got really tight in the early years.

The state pension has not been mentioned so far, but presumably that will kick in and take pressure off your investments at some stage.

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/81952169#Comment_81952169

IFAs don't have platform fees. The only fee an IFA introduces if the IFA fee.

You can take the portfolio with you. You seem to be mixing up IFAs with FAs. (later can be tied to a single provider using own-branded products and funds - IFAs are not that).

7685

@dunstonh
What is the typical minimum investment needed for an IFA to take on a new client? Also, I am unsure whether my portfolio size will generate the necessary returns or cover the advice fees.

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/81957156#Comment_81957156

There are a number of IFA business models. Some of high minimums. Some have lower. Where you are in country can come into play as well. I know of firms with £1m+ and others with £500k or £250k. Typically city based firms are that level. Whereas £100k+ is more typical of out of town localised firms.

Fees tend to taper with the amount. 0.50% is typical of higher amounts but can rise to 1% for smaller amounts.

7685

All my funds will be held within an ISA wrapper. I currently hold the HSBC All World Index Tracker. Even though it is well-diversified, I would like to add other funds to make it more balanced and to offer me flexibility when I need to access my money. 

Initially, I have chosen two funds: the HSBC Global Strategy Balanced (OCF and Transaction charge) (unless there are better alternatives, I will buy this one) and the L&G Multi-Index 7 ACC (OCF and Transaction charge) (as I want to tilt away from the US, as its UK home bias outweighs the high US portion, despite having a lot of overlap and I want to exclude UK as I have a property in the UK).

I am thinking about selling the All World Index fund and starting over, but I suspect I will end up back with the HSBC All World Index tracker as my core holding because it is diversified (though it has too much US concentration for my liking). I would like to have a multi asset fund with 2 - 3 index trackers (OEIC) so I get a balanced portfolio.

I am getting a headache because I have limited knowledge about funds. However, I know that I have a 10-year investment horizon. My risk tolerance is that I will not be selling until I need the money and I will not panic sell. I want to tilt away from the US and the 'Magnificent 7'. I plan to add a multi-asset fund (HSBC Global Strategy Balanced?) which will overlap with my HSBC All World Index tracker. I was thinking of adding another index tracker focused on Asia (excluding Japan), Europe, and / has minimum UK/USA exposure. As I do not have any small-cap exposure, I am wondering whether I should add small caps, or if large caps will work better since I need the growth.

InvesterJones

If the All World is your starting point (and it's a very sensible one if so) then you can simply add some extra funds to some complimentary (not overlapping) holdings to tilt it how you like. Since you're considering HSBC balanced you seem to want bonds, so you can just add a bond (or even money market) fund to the All World and you'll have more flexibility as you can sell from which ever you like, rather than selling form both like you would in the global strategy. If you want to tilt away from US you can add a global ex-US, or you can add individual regions funds if you really must avoid the UK, though it makes up such a small proportion of global funds it's probably not worth worrying about. You can likewise add a global small cap fund if you want to capture the additional volatility/potential return there too.

dunstonh

 I currently hold the HSBC All World Index Tracker. Even though it is well-diversified, I would like to add other funds to make it more balanced and to offer me flexibility when I need to access my money. 

from a diversification point of view, you cannot get any better. It does the job for equities unless you preferences to tilt towards/away from a particular country/region.

Initially, I have chosen two funds: the HSBC Global Strategy Balanced (OCG and Transaction charge) (unless there are better alternatives, I will buy this one) and the L&G Multi-Index 7 ACC (OCG and Transaction charge) (as I want to tilt away from the US, as its UK home bias outweighs the high US portion, despite having a lot of overlap and I want to exclude UK as I have a property in the UK).

the HSBC GS range doesn't tilt. It uses market cap for the equities but introduces defensive assets.

Mixing and matching multi-asset funds with underlying passives is largely pointless and overcomplicates it.

I am thinking about selling the All World Index fund and starting over, but I suspect I will end up back with the HSBC All World Index tracker as my core holding because it is diversified (though it has too much US concentration for my liking). I would like to have a multi asset fund with 2 - 3 index trackers (OEIC) so I get a balanced portfolio.

Without software, balancing multiple funds, especially multi-asset funds, is complicated. Indeed, it would be easier to pick the 6-7 single sector funds that give you the makeup of FTSE all world and then select the percentage you want into each. That would give you a tilt that exactly matches your wishes.

I am getting a headache because I have limited knowledge about funds. However, I know that I have a 10-year investment horizon. My risk tolerance is that I will not be selling until I need the money and I will not panic sell. I want to tilt away from the US and the 'Magnificent 7'. I plan to add a multi-asset fund (HSBC Global Strategy Balanced?) which will overlap with my HSBC All World Index tracker. I was thinking of adding another index tracker focused on Asia (excluding Japan), Europe, and / has minimum UK/USA exposure.

the FTSE All world is ideal for someone that lacks knowledge. However, you are trying to make it more complicated by effectively becoming your own fund manager by mixing and matching.

If you don't know what you are doing, then you stand to make things worse by throwing amounts into different funds on a pretty random basis. There is nothing wrong with tilting from market cap. My own portfolio is tilted. But you don't do it by picking off-the-top-of-your-head numbers into any old fund.

ticacica

I think these options are not all the options you have, and some other options can give you more than these.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/81973269#Comment_81973269

Perhaps rather more constructive if you actually suggest other options that you believe may be relevant!

masonic

"the HSBC GS range doesn't tilt. It uses market cap for the equities but introduces defensive assets"

I think this was a reference to blending with L&G multi index, which tilts quite a lot geographically.