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Re: Are huge charges inevitable?
Posted: September 24th, 2019, 8:38 am
by OhNoNotimAgain
Gilgongo wrote:I'm 52 and thinking of retiring in 5 years, so I thought I'd get my current investments (held by both myself and my wife) looked at by a professional with a view to living off them in perpetuity without too much maintenance hassle in the process.
We've got roughly 40% in a HYP (ISA), 20% in a Lunibasket L7 ITs (SIPP), 15% in cash and the rest in various ETFs (bonds, gilts, gold, and index trackers) in SIPPs and non-pension accounts. I also have a workplace pension that I'm contributing to that's currently worth about 5% of the whole. Overall, the current portfolio could have a bit more international exposure perhaps, but it's reasonably diverse.
The pro recommended consolidating around a mix of active and passive funds, one portfolio for each of us (we have different attitudes to risk).
The combined AMCs and other charges on the portfolio right now are costing about £2,000 year. For the convenience of a simple collection of diversified funds over the current hodge-podge of holdings (not to mention the management of the HYP), I'd expected to pay a bit more in charges. But the proposed portfolios would rack up over £4,000 per year, adding an extra AMC of about 0.35%
That's a fair headwind, but should I just accept is as the price of doing business?
G
No, look at
https://monevator.com/
Re: Are huge charges inevitable?
Posted: September 24th, 2019, 1:32 pm
by Gilgongo
Dod101 wrote:It seems that the IFA has helped you with your general finances. Why not just leave it at that?
Yes, I think the IFA has been useful in terms of a "sanity check" in general as well as other things (there are some details around CGT and stuff that he's highlighted as well, for example). If I hadn't done it, I'd be at least curious about what an IFA would say.
But I'm coming around to the idea that I'm on the right track, and can carry on as I am with some minor optimisations.
https://monevator.com is a good site to know about too - thanks to those who have mentioned it!
Re: Are huge charges inevitable?
Posted: September 25th, 2019, 6:13 am
by Wuffle
Had not come across the Architas product so I had a poke about.
They seem to have diligently created a 'Lifestyle 70' product at an ongoing cost of 0.43%
Vanguard are happy to sell you a '60' or an '80' at an ongoing cost of 0.22%.
I used Hargreaves Lansdown fund comparison total return graph over 5 years, open to all.
Maybe the IFA is a genius and I am missing something, or he is trying to appear clever, or he is not very good.
Wuffle.
Re: Are huge charges inevitable?
Posted: September 25th, 2019, 6:48 am
by Wuffle
The L&G product is very similar to Vanguard Lifestyle 60, with higher ongoing.
I have got into the habit of using these 'Lifestyle' products as my go to quick graphical reference and have no particular drum to beat regarding Vanguard. It does beg the question as to why an IFA would sidestep them though.
Re: Are huge charges inevitable?
Posted: September 25th, 2019, 9:36 am
by Alaric
Wuffle wrote:It does beg the question as to why an IFA would sidestep them though.
It used to be commission, but that should have been outlawed. It may be a desire to offer something not directly available to the general public such as fancy reports.
As well as the retail platforms like Hargreaves, ii, AJ Bell etc. , there are a number mostly specialising in OEICs which are only accessible through intermediaries.
This is more the back office, but a driver of what "wealth managers" might offer.
https://www.fnz.com/about
https://www.fnz.com/service-platform
A wealth manager
https://www.moneymarketing.co.uk/quilte ... aff-money/
Re: Are huge charges inevitable?
Posted: September 28th, 2019, 9:03 am
by Gilgongo
Wuffle wrote:
Vanguard are happy to sell you a '60' or an '80' at an ongoing cost of 0.22%.
To be fair, when I queried the charges he did say we could look at swapping out some of his recommendations for equivalent Vanguard lifestyle funds, but that these were not "volatility managed" as much.
Re: Are huge charges inevitable?
Posted: September 28th, 2019, 9:27 am
by Itsallaguess
Wuffle wrote:
Had not come across the Architas product so I had a poke about.
They seem to have diligently created a 'Lifestyle 70' product at an ongoing cost of 0.43%
Vanguard are happy to sell you a '60' or an '80' at an ongoing cost of 0.22%.
I used Hargreaves Lansdown fund comparison total return graph over 5 years, open to all.
In case anyone is interested in the really good HL comparison tool discussed above, then here's a link -
https://www.hl.co.uk/funds/fund-discoun ... ion/charts
Please note that the above link comes in with a Fundsmith chart by default, but additional Funds, Equities, Sectors or Indexes can be added on the right hand side of the section under the chart, and then once something else is added, the original Fundsmith chart can be removed for clarity.
I find these HL comparison charts invaluable, and I can recommend keeping the above URL link as a bookmark for future reference.
Cheers,
Itsallaguess