Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • Rockingfella
    • By Rockingfella 16th May 18, 9:42 AM
    • 2Posts
    • 0Thanks
    Rockingfella
    Investment advice for a newbie
    • #1
    • 16th May 18, 9:42 AM
    Investment advice for a newbie 16th May 18 at 9:42 AM
    Hi,

    I am in the very fortunate position at 34 to be mortgage free. I would like to capitalise on this by investing for three main reasons:

    1. Buy a bigger house in 8 years (when my children start secondary school) in London
    2. Save for retirement
    3. Be able to help my children out when they need to buy their first home

    I can invest approximately 80k per annum.

    Re. buying a bigger house, for this I would need 500k of available cash, the rest (c. 1m) would either be mortgage funded or via the sale of our current home; if this would be more tax efficient given the recent tax changes in the UK.

    Additionally we have another property that we rent out which generates 21k per annum in rent. This is under my wife's name and she currently uses the proceeds as her income until she returns to work (July next year). After this we will be able to use the income for investing.

    I'm not opposed to investing in property but returns vs hassle (again, given the recent tax changes) do not seem worth it and I cannot see property prices in London increasing significantly in the next 5 years given the saturation point / affordability issues. Perhaps I am wrong?

    I was looking into a couple of Fidelity funds but I am certainly not an expert so any advice would be greatly appreciated.

    What would you do if you were in my position?

    Thanks.
Page 1
    • AlanP
    • By AlanP 16th May 18, 10:04 AM
    • 1,214 Posts
    • 874 Thanks
    AlanP
    • #2
    • 16th May 18, 10:04 AM
    • #2
    • 16th May 18, 10:04 AM
    Given the amount you have to play with - significant - and your admitted lack of expertise I would suggest you engage the services of an INDEPENDENT Financial Adviser.

    Investing is like home improvements or car mechanics, as an IFA on here often says - You can do it yourself and save money but if you do it badly it will end up costing you a lot more than getting a professional involved and paying the fees.
    • Rockingfella
    • By Rockingfella 16th May 18, 10:27 AM
    • 2 Posts
    • 0 Thanks
    Rockingfella
    • #3
    • 16th May 18, 10:27 AM
    • #3
    • 16th May 18, 10:27 AM
    Given the amount you have to play with - significant - and your admitted lack of expertise I would suggest you engage the services of an INDEPENDENT Financial Adviser.

    Investing is like home improvements or car mechanics, as an IFA on here often says - You can do it yourself and save money but if you do it badly it will end up costing you a lot more than getting a professional involved and paying the fees.
    Originally posted by AlanP
    Thanks AlanP, very fair advice. I use the same logic when filling my self assessment - use a professional.

    Is there somewhere you would recommend?
    • AlanP
    • By AlanP 16th May 18, 3:38 PM
    • 1,214 Posts
    • 874 Thanks
    AlanP
    • #4
    • 16th May 18, 3:38 PM
    • #4
    • 16th May 18, 3:38 PM
    No, as I don't use an IFA.

    Our investment levels are much lower than yours, it is all pension based and represents only a small proportion of our retirement funds as we are fortunate to both have good DB pensions to look forward to. Hence we can take more risk that I get it all totally wrong and, heaven help me, lose the lot - we would still be OK (although my wife may be looking for an IFA and/or a new husband!).

    Ones to avoid, based on comments on here, are those such as St James Place that charge a lot and are not independent.

    Sounds like you are in London, I would have thought London based ones would be higher fees than outside but more hassle in terms of meetings etc.

    If you google you should be able to find a few local ones and then meet with them and see how you feel about working with them and trusting them.
    • Superscrooge
    • By Superscrooge 16th May 18, 8:00 PM
    • 1,081 Posts
    • 776 Thanks
    Superscrooge
    • #5
    • 16th May 18, 8:00 PM
    • #5
    • 16th May 18, 8:00 PM
    https://www.unbiased.co.uk/ is a useful website when searching for a local IFA
    • Credit-Crunched
    • By Credit-Crunched 17th May 18, 10:09 AM
    • 2,107 Posts
    • 4,133 Thanks
    Credit-Crunched
    • #6
    • 17th May 18, 10:09 AM
    • #6
    • 17th May 18, 10:09 AM
    No, as I don't use an IFA.

    Our investment levels are much lower than yours, it is all pension based and represents only a small proportion of our retirement funds as we are fortunate to both have good DB pensions to look forward to. Hence we can take more risk that I get it all totally wrong and, heaven help me, lose the lot - we would still be OK (although my wife may be looking for an IFA and/or a new husband!).

    Ones to avoid, based on comments on here, are those such as St James Place that charge a lot and are not independent.

    Sounds like you are in London, I would have thought London based ones would be higher fees than outside but more hassle in terms of meetings etc.

    If you google you should be able to find a few local ones and then meet with them and see how you feel about working with them and trusting them.
    Originally posted by AlanP
    My parents used a St. James's place adviser and he was cheaper than two IFA's they sat down with. They have flexibility on what they charge, they paid a 2.0% initial fee, and a total ongoing fee of 1.2%. This include the adviser 0.5% (ifa's wanted between 0.6% and 1%) fund fees. So all in of 1.2% seemed reasonable to me.

    Yes, they are not independent, but the other two IFA's both were recommending the Pru Cautious fund, whereas my parents have a portfolio with more than one provider running it.

    Horses for courses though, parents liked the St James chap and found the two IFA's a bit contrived.

    I would have several meetings, and go with who you feel most comfortable with and ensure that you have a total break down of ALL costs from everyone before a decision is made.
    • Malthusian
    • By Malthusian 17th May 18, 12:56 PM
    • 4,307 Posts
    • 6,804 Thanks
    Malthusian
    • #7
    • 17th May 18, 12:56 PM
    • #7
    • 17th May 18, 12:56 PM
    My parents used a St. James's place adviser and he was cheaper than two IFA's they sat down with. They have flexibility on what they charge, they paid a 2.0% initial fee, and a total ongoing fee of 1.2%. This include the adviser 0.5% (ifa's wanted between 0.6% and 1%) fund fees. So all in of 1.2% seemed reasonable to me.
    Originally posted by Credit-Crunched
    If true that's a remarkably cheap SJP salesman.

    St James Place salesmen usually charge 0.75% to 1%, with high initial costs, and all-in fees typically in the region of 2 - 2.5%pa.
    • Credit-Crunched
    • By Credit-Crunched 17th May 18, 4:28 PM
    • 2,107 Posts
    • 4,133 Thanks
    Credit-Crunched
    • #8
    • 17th May 18, 4:28 PM
    • #8
    • 17th May 18, 4:28 PM
    If true that's a remarkably cheap SJP salesman.

    St James Place salesmen usually charge 0.75% to 1%, with high initial costs, and all-in fees typically in the region of 2 - 2.5%pa.
    Originally posted by Malthusian
    I have seen the paperwork, and the ongoing advice fee is 0.5%, with the TER of 1.2%.

    He did explain that most people think that he will be expensive, but he is able to reduce the initial fees to a level he feels comfortable with. From what I can see on the website the max they can charge for ongoing advice is 0.5%, obviously other costs on top of that.
    • bostonerimus
    • By bostonerimus 17th May 18, 4:37 PM
    • 2,014 Posts
    • 1,334 Thanks
    bostonerimus
    • #9
    • 17th May 18, 4:37 PM
    • #9
    • 17th May 18, 4:37 PM
    I have seen the paperwork, and the ongoing advice fee is 0.5%, with the TER of 1.2%.

    He did explain that most people think that he will be expensive, but he is able to reduce the initial fees to a level he feels comfortable with. From what I can see on the website the max they can charge for ongoing advice is 0.5%, obviously other costs on top of that.
    Originally posted by Credit-Crunched
    What do you get for you 0.5% every year? I'm continually amazed at how people will give money away when they can DIY quite easily
    Misanthrope in search of similar for mutual loathing
    • dunstonh
    • By dunstonh 17th May 18, 4:51 PM
    • 93,353 Posts
    • 60,851 Thanks
    dunstonh
    What do you get for you 0.5% every year? I'm continually amazed at how people will give money away when they can DIY quite easily
    Originally posted by bostonerimus
    Better returns. More free time. Less hassle.

    All the usual things that people benefit from by letting someone else do the work.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • eskbanker
    • By eskbanker 17th May 18, 5:01 PM
    • 7,495 Posts
    • 8,081 Thanks
    eskbanker
    What do you get for you 0.5% every year? I'm continually amazed at how people will give money away when they can DIY quite easily
    Originally posted by bostonerimus
    I'd have thought that most people spending money in this way will do so precisely because they don't feel that they (personally) can DIY quite easily, even if others can (the sort of people who'd dismissively describe it as 'giving money away'!)....
    • dunstonh
    • By dunstonh 17th May 18, 5:07 PM
    • 93,353 Posts
    • 60,851 Thanks
    dunstonh
    My parents used a St. James's place adviser and he was cheaper than two IFA's they sat down with. They have flexibility on what they charge, they paid a 2.0% initial fee, and a total ongoing fee of 1.2%. This include the adviser 0.5% (ifa's wanted between 0.6% and 1%) fund fees. So all in of 1.2% seemed reasonable to me.
    We were up against an SJP rep recently. Our initial charge was 2500. SJP was 25,000.

    The ongoing charge of SJP is not flexible. The SJP rep quoted AMCs versus us quoting OCFs plus transaction costs. Our ongoing was higher than SJP because of the different disclosure level. it was very hard to explain that to the client as the parents and much of the family used SJP and we were the outsiders effectively.

    They had been "sold" very well by the SJP sales rep but disclosure was awful.

    My gut (as I never saw the SJP advice but based on comments) is that SJP were trying to get it into an investment bond and write a bogus trust (bogus as in not actually needing the trust but using it as an excuse to do an investment bond). Whereas we were looking at ISA, pension and GIA with annual CGT allowance use and bed & ISA/bed & pension. They said the SJP rep told them they didnt have to worry about CGT (again, making me think it is was a bond).

    Once the SJP rep found out our initial charge, he lowered his to match ours.

    but the other two IFA's both were recommending the Pru Cautious fund, whereas my parents have a portfolio with more than one provider running it.
    Interesting. That is a niche fund for people who are very cautious. It historically delivers year in year out but it really is for the very cautious. To find two IFAs recommending that indicates their belief your parents are very cautious. Over the last decade, there has only been one unit price reduction and very straight line growth. SJP doesn't have a similar investment in their range.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

58Posts Today

2,117Users online

Martin's Twitter
  • RT @bbcthehour: "Mental health and debt is a marriage made in hell" @MartinSLewis told the Senedd when people are more vulnerable they're m?

  • RT @justindeaville: @MartinSLewis I looked it up when we last went. It's ball speed. And it's about O.3 seconds to cross the court. @Martin?

  • Amazing how empty the #Wimbledon court is for the mixed doubles even though there's a Brit playing. The bars outside are rammed though

  • Follow Martin