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  • FIRST POST
    • FieldOps
    • By FieldOps 12th Aug 18, 11:17 AM
    • 4Posts
    • 0Thanks
    FieldOps
    Investing 101k
    • #1
    • 12th Aug 18, 11:17 AM
    Investing 101k 12th Aug 18 at 11:17 AM
    I have 101k to invest and I am looking for investment advice, having not dabbled in investments before. My intent would be to invest for 5 to 10 years as a growth fund. The reason for the 101k is the extra 1k seems to push up the amount into new cheaper fee bands.

    For the past couple of months, I've been researching across a number of investment companies to understand shares, funds, ISAs etc, and also trying to understand fees etc - to say it is confusing and a minefield is an understatement!

    My initial plan was to put it in a managed fund, and one of the top companies appears to be Hargreaves Lansdown with their Portfolio+ multi manger accounts. But with a 0.45% fund fee, and a 1.4% OCF on top, that's quite an annual whack each year from any gains, but there appear to be quite a number of people who will pay that to get top level service. There are a number of lower % fees with other investment companies with lower fees (JP Morgan at 0.1% for example), but would you get the same level of fund management and performance?

    Another one I was looking at was Nutmeg, which seems to have a 0.35% fee for managed funds above 100k (hence my 101k), with 0.21% and 0.9% charges on top for OCF, giving a 0.65% total per annum - much cheaper than HL, but I don't know much about them. Neil Woodford now has his own company and is another option. Slower performance of recent, but the thinking is he will come back strong, and he does have a considerable track record.

    With 101k, an alternative suggested approach from some sectors is to go for a fixed fee managed fund. But I'm assuming the level of management service goes down due to a lower management fee in proportion to the sum invested.

    So the question is, to get a better managed fund service, do I need to pay the HL fees, or are there others like Nutmeg who could do equally well, and on balance would give me a better return? Or do I go for a pre-selected fund from someone like HL and self manage?

    Welcome any thoughts.
Page 1
    • eskbanker
    • By eskbanker 12th Aug 18, 11:38 AM
    • 8,212 Posts
    • 9,215 Thanks
    eskbanker
    • #2
    • 12th Aug 18, 11:38 AM
    • #2
    • 12th Aug 18, 11:38 AM
    Most on here would recommend that for newbie investors (and many others), the best option to achieve low-cost diversification is to buy into a global multi-asset fund, which are available through all the mainstream platforms.

    Typical funds would be Blackrock Consensus, HSBC Global Strategy, L&G Multi-Index and Vanguard LifeStrategy, while most platforms will be cheaper than HL, you can pick options from:

    http://monevator.com/find-the-best-online-broker/
    http://www.comparefundplatforms.com/
    http://forums.moneysavingexpert.com/showthread.php?t=5583030
    • ColdIron
    • By ColdIron 12th Aug 18, 11:46 AM
    • 4,721 Posts
    • 6,163 Thanks
    ColdIron
    • #3
    • 12th Aug 18, 11:46 AM
    • #3
    • 12th Aug 18, 11:46 AM
    The reason for the 101k is the extra 1k seems to push up the amount into new cheaper fee bands.
    Originally posted by FieldOps
    If you are thinking that this will substantially reduce the platform fee it won't. These fees are usually tiered so you'd pay the higher fee on the first 100K and a cheaper fee on the remaining 1K. I can't think of many platforms that offer this at 100K, most are north of 200K

    My initial plan was to put it in a managed fund, and one of the top companies appears to be Hargreaves Lansdown with their Portfolio+ multi manger accounts.
    HL's off the shelf products are very expensive with no likelihood that they will perform better than anything else quite possibly less once you take the fees into account. They are OK for people with no time or inclination to research alternatives and are willing to pay, handsomely, for a packaged offering
    • xylophone
    • By xylophone 12th Aug 18, 12:39 PM
    • 26,870 Posts
    • 16,019 Thanks
    xylophone
    • #4
    • 12th Aug 18, 12:39 PM
    • #4
    • 12th Aug 18, 12:39 PM
    Perhaps not invest the 101,000 right away?

    Maybe start with 20,000 in an ISA?

    https://www.vanguardinvestor.co.uk/investing-explained/stocks-shares-isa

    http://monevator.com/using-vanguard-lifestrategy-funds-life/
    • dunstonh
    • By dunstonh 12th Aug 18, 12:51 PM
    • 95,368 Posts
    • 62,993 Thanks
    dunstonh
    • #5
    • 12th Aug 18, 12:51 PM
    • #5
    • 12th Aug 18, 12:51 PM
    My initial plan was to put it in a managed fund, and one of the top companies appears to be Hargreaves Lansdown with their Portfolio+ multi manger accounts.
    That is a cash cow. You are paying more for a DIY solution than you would be if you were using an IFA. The point about DIY is to save money. Not spend more than a professional.

    but there appear to be quite a number of people who will pay that to get top level service.
    There is no "top level service" with this. Its a fund and a DIY platform. You would get identical service if you bought a 0.1% fund.

    There are a number of lower % fees with other investment companies with lower fees (JP Morgan at 0.1% for example), but would you get the same level of fund management and performance?
    You are buying an off-the-shelf solution. Not sure where you are getting this idea that it is a top solution.

    Another one I was looking at was Nutmeg, which seems to have a 0.35% fee for managed funds above 100k (hence my 101k), with 0.21% and 0.9% charges on top for OCF, giving a 0.65% total per annum - much cheaper than HL, but I don't know much about them.
    Nutmeg operate a completely different model to HL. They have poor financials (ever increasing losses each year) and they are not that transparent on their charges. The only only use index tracking funds to keep their costs down but charge you more for doing so.

    Also, their charge is 0.75% upto 100k. Its 0.35% above. So, 101k would be 100k at 0.75% with 1k R 0.35%. So, you are looking at pricing that is about 3 times more than it needs to be for what it is providing.

    Neil Woodford now has his own company and is another option.
    There are around 30,000 options. Neil Woodford is not one that is riding high on most people's lips at the moment. And is certainly not suitable for 100% of the investment.
    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.
    • keyboardworrier
    • By keyboardworrier 12th Aug 18, 1:21 PM
    • 108 Posts
    • 112 Thanks
    keyboardworrier
    • #6
    • 12th Aug 18, 1:21 PM
    • #6
    • 12th Aug 18, 1:21 PM
    Personally I would use Iweb (5 to buy a fund and then you only pay the fund charge after that. There is an account opening charge of 25) with a very low cost index fund.
    • Grumpazoid
    • By Grumpazoid 15th Aug 18, 7:41 PM
    • 10 Posts
    • 1 Thanks
    Grumpazoid
    • #7
    • 15th Aug 18, 7:41 PM
    • #7
    • 15th Aug 18, 7:41 PM
    Thinking of moving to iweb myself as my current provider has just announced 40% fee increase. It appears I could save around 500 per year.
    • Thrugelmir
    • By Thrugelmir 15th Aug 18, 8:03 PM
    • 60,096 Posts
    • 53,437 Thanks
    Thrugelmir
    • #8
    • 15th Aug 18, 8:03 PM
    • #8
    • 15th Aug 18, 8:03 PM
    I have 101k to invest and I am looking for investment advice, having not dabbled in investments before. My intent would be to invest for 5 to 10 years as a growth fund. The reason for the 101k is the extra 1k seems to push up the amount into new cheaper fee bands.
    Originally posted by FieldOps
    What does the rest of your portfolio consist of?
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • FieldOps
    • By FieldOps 16th Aug 18, 10:47 PM
    • 4 Posts
    • 0 Thanks
    FieldOps
    • #9
    • 16th Aug 18, 10:47 PM
    • #9
    • 16th Aug 18, 10:47 PM
    What does the rest of your portfolio consist of?
    Originally posted by Thrugelmir
    At the moment, I don't have any portfolio or investments. Now having 101k to invest, and never having invested before, I was looking for advise on what to do.
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