40k to invest today over long term, your thoughts

Lee_F

I've got £40k to invest that I won't need to touch for at least 15-20 years. My financial adviser has advised a Skandia MultiManager. The fund range is MultiFund and the risk level is 4 out of 10. I would be each year switching the to the maximum allowed for ISA.

What I am wondering is whether now is a good time to invest or whether I would be better off keeping the money in high interest saving for next few years. I have read some of 2010 boom/bust and am worried that say in 2 years, due to global downturn, my £40k is worth like £25k. this wouldn't matter so much cos I won't need to touch the money for the long term. Clearly I have no investing knowledge. Just wondering what people would do in this situation.

cheers for your input.

Aegis

I'd be amazed if that recommendation came from anything but a tied adviser... Multimanager funds are generally used by lazy advisers to achieve a lot of commission for very little effort (this is what I've gathered from an industry news source, and it applies only when the adviser recommends that 100% of the capital goes into such a product: I'm sure they have their place somewhere along the line!)

You'd be better off speaking to an Independent Financial Adviser than a tied agent, as you'll get advice as to how to form a diversified portfolio that probably outperforms the Multimanaged fund because of the much lower charging structure.

shepasme

Lee, you're better of speaking to an IFA. Generally, the banks won't do the trick as they are tied. Right now, it would be important to get a mixed asset portfolio, as the above suggested, possibly through a multifund. Try somewhere like www.ifanational.co.uk or www.fsa.gov.uk/register to find a good ifa.

Best of luck

Lee_F

the advice was thru an IFA, however the type that doesn't charge for meeting you but makes money thru the commission. These IFAs tend to lead rich lifestyles and am wondering whether I am being pushed towards something cos its top commission for him.Thats maybe unfair but u got to think these things thru before you hand your money over.

so u think a mixed asset protfolio thru a multifund is a good idea? Thats what he rcommened and it is diverse.

Aegis

Lee_F wrote: »

the advice was thru an IFA, however the type that doesn't charge for meeting you but makes money thru the commission. These IFAs tend to lead rich lifestyles and am wondering whether I am being pushed towards something cos its top commission for him.Thats maybe unfair but u got to think these things thru before you hand your money over.

so u think a mixed asset protfolio thru a multifund is a good idea? Thats what he rcommened and it is diverse.

If it's an IFA, then I would strongly suggest walking away. An IFA has access to tens of thousands of products that could be used to work for your risk profile, so to suggest putting all £40k into a single very expensive product screams "mis-sale" to me.

I would very much recommend going to http://www.unbiased.co.uk and finding a different IFA to get a second opinion from.

dunstonh

I think there is some terminology confusion here. Skandia Multifunds is a fund supermarket. Indeed, IIRC it was the first fund supermarket in the UK. The "multifunds" doesnt mean multi-manager in the sense Aegis is mentioning.

These IFAs tend to lead rich lifestyles and am wondering whether I am being pushed towards something cos its top commission for him.Thats maybe unfair but u got to think these things thru before you hand your money over.

So what if most IFAs make a good living. Would you really want to invest with someone that hasnt made money? Skandia Multi-funds is no different to cofunds, fidelity and other fund supermarkets and use of a fund supermarket is what you would expect.

cooper2110

Lee, before listening to everyone else who has immediately jumped to conclusions about IFA's, I have used that exact product for some of my clients and it is very good. More importantly, it'd be more relevant to see his actual fund recommendations before passing comment as this plan is merely the vehicle.

I'll also second what Dunstonh has to say about remuneration. So what if he earns decent money. Concentrate on how good is advice is, how much of a service he provides and the performance of your investments, as I believe this is far more important that what kind of lifestyle that HE leads.

debbie42

What I'd be looking for from an IFA is added value through a good service.

I'd rather pay someone 5% of a £5K profit than 2% of a £2K profit, just for illustration.

I couldn't give a monkeys what sort of car the IFA chose to drive. Well apart from jarring with my innate sense of style and good taste, of course :rolleyes:

cooper2110

Indeed debbie. I think the most important thing for anyone to realise is that it is impossible for any advice given now, to remain the best advice for the next 15-20 years (term of the above investment). Markets change, circumstances change etc etc. If your adviser makes a commitment to you for regular reviews, is easily accessible for questions etc, then I think he is worth his salt. If he doesn't, and takes a large initial commission as opposed to a fund based incentive, then that's where maybe you could consider whether he is in it for the long haul, or to make a quick buck.

Unfortunately the latter are still very prevelent.

Lee_F

Having re-read what I wrote, I think that came out wrong. Of course an IFA is entitled to a living. I was just trying to get a feel as to what people thought of the services of IFAs.

Anyway back to original subject, the breakdown of multifund is as follows.

36% UK equity
20% property
11% european
11% north american
7% global specialist
7% japanese
4% emerging market equity
4% far east ex japan.

any views? thanks

dunstonh

Of course an IFA is entitled to a living. I was just trying to get a feel as to what people thought of the services of IFAs.

Most people in the UK havent used an IFA. Too many get caught up with the tied agent at banks or similar (although research shows that half of them think their tied agent is really an IFA).

IFAs have the lowest complaints with the FOS than any other retail distribution channel. However, they account for more transactions than any other distribution channel. Like any profession you get bad apples but things are not too bad and with a number of proposals from 2009 improving things more (basically increasing the gap between salesmen and advisers to make it more obvious to the consumer which they are seeing) things only stand to get better.

Anyway back to original subject, the breakdown of multifund is as follows.

It appears to be using sector allocation which is good. The sectors suggest a medium/high risk spread although the investments within each sector can obviously be tweaked to use higher or lower risk investments than the sector average.