How to invest 300k

looking for some advice on how I should invest a large Compensation pay out. £500k

It looks as though we are going to go down the route of holding the money in a bare trust so as to protect me from future care costs in the future.
Holding the money in trust will also mean me not having an ISA as my understanding is these cannot be held through trusts.

I will be buying a new house and will be Mortgage Free, after which I will have about £300k to invest.
I do not have the first Idea how to go about this and am getting stressed.
I am scared to death of being ripped off by IFA as I am Vulnerable and do not always make the best choices, and there fee's seems high 3% of the initial Investment amount + 0.5% a year of the total pot fund.
They say I am a moderately cautious investor, but I do not think that describes me at all, I am at best cautious but more than likely defensive attitude to investment.

Am I wasting my time with Financial advisers because of my aversion to risks and so would not be able get any better interest rates through a FA than what i can get myself through high street banks and online.

I am also not interested in buying property to let out, I have watched to many episodes of nightmare tenants, slum landlords lol.

Does anyone have an suggestions on the things I could do or think about.

appreciate any help

Jacob
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Replies

  • Keep_pedallingKeep_pedalling Forumite
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    Who is advising you to do this? and why on earth do you want to rely on the the state to pay any care costs you may need?

    I do have an IFA but if I had one advising me to avoid care costs they would not see me for dust.
  • edited 14 May 2017 at 10:30AM
    dunstonhdunstonh Forumite
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    edited 14 May 2017 at 10:30AM
    Holding the money in trust will also mean me not having an ISA as my understanding is these cannot be held through trusts.

    Is this a court award?
    I am scared to death of being ripped off by IFA as I am Vulnerable and do not always make the best choices, and there fee's seems high 3% of the initial Investment amount + 0.5% a year of the total pot fund.

    There are over 20,000 advisers out there. All with very different pricing models. Whilst there are some that may charge 3% on £300k, most would not be anywhere near that. Pre-RDR (2013) the FSA used to record and publish the average initial and it was closer to around 1.8% as an average across the industry. Initial fees are generally perceived to have gone down since then. There will also be expensive firms (and that goes in all walks of life. Like the builder that wanted to charge me £20,000 more than the others for some work that needed doing on that I got done for £9000). You cant be ripped off here as fees are agreed in advance. So, if the IFA says £8000 fee then you walk away and find one that is closer to £2k.
    Am I wasting my time with Financial advisers because of my aversion to risks and so would not be able get any better interest rates through a FA than what i can get myself through high street banks and online.

    If this is a trust and you are the beneficiary then it is up to the trustees how it is invested. You mention risks but what risks are you averse to? If you are suggesting placing it all on deposits, then you are likely increasing your risk if this money is to be there very long term. You would be making it subject to inflation risk and shortfall risk.
    I am also not interested in buying property to let out, I have watched to many episodes of nightmare tenants, slum landlords lol.

    Again, if its a trust, its unlikely the trustees would want to use those things either.
    I am also not interested in buying property to let out, I have watched to many episodes of nightmare tenants, slum landlords lol.

    There is no fixed phrase to measure your risk. Some scales may call you moderately cautious and that could be lower risk than another scale that calls you defensive.

    You seem quite willing to take risks in losing money due to inflation. So, at this stage, it appears that any IFA the trustee's use is going to have to educate you on risks as you are heading towards decision making with your heart and not your head.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • jacob.ukjacob.uk Forumite
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    Please get off your high horse.

    It is nothing underhanded at all.

    It is acting perfectly well within the law.

    It is about protecting the compensation from future care costs, should they arise in the future after being the victim of crime and injured.

    If you are using a financial adviser yourself, then I am sure that you do all that you can to limit your tax liabilities, within the law

    I was after some financial advice, not a lecture on morals.
  • PincherPincher
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    What kind of criminal has insurance that pays out £500k? :A
  • Keep_pedallingKeep_pedalling Forumite
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    jacob.uk wrote: »
    Please get off your high horse.

    It is nothing underhanded at all.

    It is acting perfectly well within the law.

    It is about protecting the compensation from future care costs, should they arise in the future after being the victim of crime and injured.

    If you are using a financial adviser yourself, then I am sure that you do all that you can to limit your tax liabilities, within the law

    I was after some financial advice, not a lecture on morals.

    I was not lecturing you on your morals, just wanted to know why you would want to give up the ability to chose who provides, and where you receive care and risk being placed in some very basic care home at probably the most vulnerable time of your life.

    Yes we are taking actions to reduce IHT and CGT, but we also making sure that should the time come we are able to pay for care at a time and place of our choosing. We do not want to end up in a dump simply because that is all the LA can afford.
  • jacob.ukjacob.uk Forumite
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    Thank you for your reply dunstonh

    "Is this a court award?"
    Yes

    I have only seen 2 Financial Advisor so far and their fee's were 3% + 0.5% annual.

    I am going to see another one. I was just a little put off as they tried to convince me that I was moderately cautious when I do not think I am. I would not be prepared to risk 11% of investment over a year.

    "If this is a trust and you are the beneficiary then it is up to the trustees how it is invested."

    Yes it will all be in trust, although I am the beneficiary, I would be 1 of 4 trustee's. I understand under the terms of the trust, I would not be able to have anything to do with the managing of that trust.
    I just want to know what sort of returns I could expect, were I to go ahead with the trust and then have it invested through Financial Advisors with low risk investments.

    " You mention risks but what risks are you averse to? "
    I am averse to losing it in stocks and shares investments, it petrifies me. I prefer less risk investment strategies.

    This has all happened quite quickly, so my head is in a spin at the moment and I am struggling to make decisions
  • Keep_pedallingKeep_pedalling Forumite
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    Pincher wrote: »
    What kind of criminal has insurance that pays out £500k? :A

    https://www.gov.uk/government/organisations/criminal-injuries-compensation-authority
  • jacob.ukjacob.uk Forumite
    10 Posts
    It's called the Criminal Injuries Compensation authority.

    Anyone who has been the victim of a serious crime and left with significant disabilities is able to apply.
  • jacob.ukjacob.uk Forumite
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    Sorry @Keep pedalling

    Little sensitive right now and probably read to much into it.

    The Compo was to cover past loss of earnings, and future loss of earnings and short term medical costs, not future care costs.
    I am just trying to invest that money sensibly whilst protecting it at the same time (within the law) in the most tax efficient way as possible.

    I have no understanding of any of this, neither does my family who would be trustee's.

    It is all very frightening.
  • Keep_pedallingKeep_pedalling Forumite
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    jacob.uk wrote: »
    Sorry @Keep pedalling

    Little sensitive right now and probably read to much into it.

    The Compo was to cover past loss of earnings, and future loss of earnings and short term medical costs, not future care costs.
    I am just trying to invest that money sensibly whilst protecting it at the same time (within the law) in the most tax efficient way as possible.

    I have no understanding of any of this, neither does my family who would be trustee's.

    It is all very frightening.

    No problem, Jacob. Care costs scare a lot of people and there are "advisors" out there who might exploit that fear to get you to do something that really is against your own interests. most people never need residential care, but if you do I think loss of control is far more scary than the loss of savings.
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