Do you have rights to commute part of your USS-invested pension monies? If so, and you may be considering retiring soon, I’d advocate an IFA ASAP, as this can need rationalising and perhaps considering alternatives/options – unless the USS can continue to be used?
One aspect here, is that in the run-up to a (potential) commutation event, it’s often sensible to protect part of your capital by going to cash.
Whilst we (members plural) can chat generally about things on a thread like this, the permutations, options, underlying considerations are so plentiful (and there’s no ‘right answer’!), that getting a professional view is really the recommended way to go (IMHO).
Because I’d reached the conclusion that I do finally need to get an IFA.
And also because 4 days ago I discovered James Shack on YouTube, who in my view gives the most interesting and useful, theoretically-informed, UK-based advice for people in my kind of position that I’m aware of.
Which is helping to prepare me to employ an IFA myself.
And I’m also aware that the sheer tonnage of my own ignorance in this field is so vast that there may be much better general, free background advice out there that I’m unaware of.
For example, I have a limited sense of what a good or bad deal would be when recruiting an IFA.
If anyone has any sage advice on this, it would be welcome.
The answer here is undertaking a ‘beauty parade’ of IFAs, as the first meeting is usually ‘free’, when you can assess the cut of their jib, and things like fees (initial and ongoing). A must is to understand your own needs & wants e.g. what income you desire, what capital spends you may wish to hold near-cash for, what your tax position is et al.
There will be no ‘right answer’ for you, as all market investments involve risk (often erratic and unpredictable risk). There are some names I’d avoid, as their fees are very ‘off market’ (code for very expensive).
Hi JD, I’m going to stay out of this one if you don’t mind.
Quoting facts in a relatively generic thread is fine imo. However, without wishing to appear melodramatic, responding to and making suggestions in respect of an individual’s personal situation has an outside chance of being construed as advice within a very tightly regulated environment. Unlikely, but I’d just prefer not to go there…
I also use HL and make our own choices. I have an ISA, my wife has ISA and SIPP, son and his wife also ISA and SIPP, grandchildren Junior ISAs that we contribute.
All or most of the investments are in a mix of investment trusts chosen to spread the risks and exposure quite wide.
Started investing in these about 40 years ago as PIPs and on average achieved an total annual return of about 10 percent above inflation!
About 15 years ago as we entered retirement we had a number of meetings with IFAs, had we took any of their advice, we would have been significantly worse off and they would have been significantly better off!
I like to take my own decisions, then if goes wrong it’s my fault.
Paul
I used to Jim, but I have a financial advisor I’ve been using for about ten years now. We basically do it together with him as the principle.
I think that soon I will take a small portion and invest it solely by myself again, to see if I can get even higher returns. It has been nice to have an experienced manager tho.
Sage words, HL. I always just hire the prettiest one. The ugly ones aren’t any cheaper …
I was fortunate in being recommended to an IFA that the person had a profitable 30 year relationship with. But I stay in frequent contact with him and let him know my expectations.
I can’t believe that many friends of mine just give their money to someone and don’t sub-manage them.
They haven’t a clue what their returns really are. I’ll offer them some advice, once or twice, then I just drop the issue.
To answer that question, I would not take away the impression that an IFA sits behind a Bloomberg screen (with all asset/share/fund performance data), and then calls you up to suggest a switch if something isn’t going well. IMV, that’s the last people/person you want. Fund/share/asset performance must be judged over years, not weeks and months – unless it’s clear a wrong turn has been taken.
As above, their role (IFAs) is to investigate your holistic financial profile, then make recommendations, not just in positioning and nature, but also in how to purchase the investments effectively, which is normally on a ‘platform’, rather than direct investing, as ‘direct retail investing’ (say by 'web page of the provider) is often more expensive.
I’d say an IFA fee level for running support should be around 0.5%p.a. of funds invested, with the odd transactional charge on top of this. Initial charges may be higher (set sums not %-related) for all the admin in reviewing existing investments (if any) and working-up a report et al. Be warned, it is a paper intensive process, as dictated by regulation. Of course, you may make different agreements on fees/costs.
Would you say a little bit more about this please?
I imagine that something like AJ Bell or HL provides a platform, which includes availability for nonprofessionals like me to buy individual shares or funds or other assets from a website.
But as I understand it, you are saying that an IFA can get the same assets at a better price on a Professional version of the same platform/website/Service?
But a cost of that (over and above how much I pay the IFA) is that I don’t have direct visibility of where my money is any more?
Then I just get reports from the IFA, telling me how much he or she claims I’ve got, but I have no sight of the institutional reality of this?
The only day you really know what your returns are is the day that you part company with the IFA and they pay you the money they’ve been managing on your behalf.
Firstly IFAs have now to work to a tight regulatory framework, having started out a Life Insurance Inspector ( it means that I used to call on IFA for new business for my employer) I thought most IFAs were not people I would want to deal with for my savings.
Then came the FSA and compulsory exams stated, and standards started to improve , and things ramped up and improved .
By this time I was dealing with the major fee based consultancies and actuarial practices .
These days IFA s are tightly regulated and have to be qualified by exam , I do wonder if they are overwhelmed by wrappers etc and fail to understand the finer nuances of what investment providers are doing.
My advice is not to want the best possible returns but to work out what you want from your investments, what level of risk you are prepared to absorb and do you want an ethical approach to your portfolio
Oh yes, the days of IMRO, the PIA, when things were going very much awry (Barlow Clowes anyone!).
Thing is, when you reach retirement, and protection of capital becomes more important, this doesn’t square with achieving market-leading returns, which means (in most times), holding high equity exposure - UNLESS - your financial position allows you to be non-reliant on your investments and can take the longer view.
