Go Back   Forums @ The Digital Fix > Shopping and Money Forums > Finance Discussion Forum

Reply
 
Thread Tools Display Modes
Old 31-12-2020, 11:12   #81
AdamBrunt
Trusted User
 
Join Date: Sep 2000
Location: UK
Posts: 26,363
Thanks: 197
Thanked 376 Times in 262 Posts
Quote:
Originally Posted by jockosjungle View Post
I really wish I was brave enough to invest in cryptos and shares. I invested £20 in shares a while ago, and the ups and downs on a daily basis stressed me out.
That's the thing though .... stocks and shares as an investment are a long term thing; you should be in it for the long haul and not worrying about what they do from one day to the next net alone intraday

I have a similar problem with home owners who worry about being in negative equity even though they have no intention of moving/selling anytime soon

Sent from my Mi A2 Lite using Tapatalk

Last edited by AdamBrunt; 31-12-2020 at 14:22.
AdamBrunt is offline   Reply With Quote
Old 31-12-2020, 12:40   #82
The Bear
Old-gold and black member
 
The Bear's Avatar
 
Join Date: Jan 2001
Location: Molineux
Posts: 17,128
Thanks: 513
Thanked 1,723 Times in 597 Posts
Indeed. In the short term the pandemic was terrible for my portfolio. It plummeted after the first lockdown but then it recovered and even increased before this latest wave. In a couple of years it'll be higher because investments are cheaper to buy when the market dips.
The Bear is offline   Reply With Quote
Old 16-01-2021, 11:47   #83
AdamBrunt
Trusted User
 
Join Date: Sep 2000
Location: UK
Posts: 26,363
Thanks: 197
Thanked 376 Times in 262 Posts
So, we finally have a load of paperwork back from a fianancial advisor recommending Stocks and Shares ISAs.

They are recommending 2 lots of £20k into S&S ISA (one each for me and the OH) before April and then another 2 lots of £20k after April. The first deposit incurs a fee of £395 for each £20k. Which didn't sound too bad to me. Any thoughts ?

However, I am confused about one thing on a PDF they also sent over - which says it is the the "quarterly update October 2020" for the 'Adventurous' portfolio they are recommending. The PDF states the following:

Quote:
Yield: The anticipated yield for this portfolio is 2.21%

Discrete annual performance (as at 30/09/2020):
09/2019 to 09/2020: -2.42%
09/2018 to 09/2019: 6.09%
09/2017 to 09/2018: 4.29%
09/2016 to 09/2017: 12.18%
09/2015 to 09/2016: 23.61%
Given it's a quarterly update, would that be the yield for the following quarter ? year ? or something else ?

I am also assuming that the most recent performance figure is largely due to Covid ?
AdamBrunt is offline   Reply With Quote
Old 16-01-2021, 11:54   #84
The Bear
Old-gold and black member
 
The Bear's Avatar
 
Join Date: Jan 2001
Location: Molineux
Posts: 17,128
Thanks: 513
Thanked 1,723 Times in 597 Posts
Yield would be annually yeah.
The Bear is offline   Reply With Quote
Old 16-01-2021, 11:57   #85
AdamBrunt
Trusted User
 
Join Date: Sep 2000
Location: UK
Posts: 26,363
Thanks: 197
Thanked 376 Times in 262 Posts
Quote:
Originally Posted by The Bear View Post
Yield would be annually yeah.
Thanks, thought so.

So they are effectively predicting the performance table to become:

Discrete annual performance (as at 30/09/2021):
09/2020 to 09/2021: 2.21%
09/2019 to 09/2020: -2.42%
09/2018 to 09/2019: 6.09%
AdamBrunt is offline   Reply With Quote
Old 16-01-2021, 12:19   #86
unclerichy
Geek up your life
 
Join Date: Mar 2003
Posts: 341
Thanks: 4
Thanked 16 Times in 9 Posts
Quote:
Originally Posted by AdamBrunt View Post
The first deposit incurs a fee of £395 for each £20k. Which didn't sound too bad to me.
Is the £395 the adviser's fee or is it on top of the fee? Either way that's almost 2% of your 20k gone straight away (give or take a bit).

And do the yield values account for the 2% - if not then knock off 2% from your 2020/21 prediction and your first year is only a 0.21% return.

Will the adviser manage your ISA on an ongoing basis or are they just recommending specific investments within it and then leaving them alone?
unclerichy is offline   Reply With Quote
Old 16-01-2021, 12:48   #87
AdamBrunt
Trusted User
 
Join Date: Sep 2000
Location: UK
Posts: 26,363
Thanks: 197
Thanked 376 Times in 262 Posts
Quote:
Originally Posted by unclerichy View Post
Is the £395 the adviser's fee or is it on top of the fee? Either way that's almost 2% of your 20k gone straight away (give or take a bit).

And do the yield values account for the 2% - if not then knock off 2% from your 2020/21 prediction and your first year is only a 0.21% return.

Will the adviser manage your ISA on an ongoing basis or are they just recommending specific investments within it and then leaving them alone?
So, according to the blurb it's a total of £395 (and there will be no more charges for another year). I am also assuming the yield doesn't take the fee into account. However, to counter that, we would be in this for the long term - and not a quick profit - and so, hopefully, the yield will start going up way beyond the 2% fee. Or are you suggesting waiting, say, a year and leaving the money - for now - somewhere with a higher than 0.21% return for a year ?

As far as I know, we are just putting one off payments into the portfolio and then doing nothing from our end - it's totally managed for us.

Is a 2% fee good/bad/average ?

Last edited by AdamBrunt; 16-01-2021 at 12:49.
AdamBrunt is offline   Reply With Quote
Old 16-01-2021, 13:17   #88
unclerichy
Geek up your life
 
Join Date: Mar 2003
Posts: 341
Thanks: 4
Thanked 16 Times in 9 Posts
A quick bit of searching suggests that 2% is about the going rate (1-3% was mentioned when I looked) for financial advice. The benefit of an adviser is that you're paying for knowledge and experience and the likelihood of higher yields compared to the DIY approach.

Personally I like to do my own research so I manage my own S&S ISA, putting money in every month to smooth the bumps, and have a relatively risk-free portfolio spread (compared to the Adventurous you're looking at) . For reference my recent returns (calendar years so Jan-Jan) after the 0.35% platform fee are:

2020: 7.4%
2019: 10.3%
2018: -4.6%
2017: 3.4%
2016: 9.7%

As for holding off - I'd just invest it straight away.
unclerichy is offline   Reply With Quote
Old 16-01-2021, 13:20   #89
AdamBrunt
Trusted User
 
Join Date: Sep 2000
Location: UK
Posts: 26,363
Thanks: 197
Thanked 376 Times in 262 Posts
Quote:
Originally Posted by unclerichy View Post
A quick bit of searching suggests that 2% is about the going rate (1-3% was mentioned when I looked) for financial advice. The benefit of an adviser is that you're paying for knowledge and experience and the likelihood of higher yields compared to the DIY approach.

Personally I like to do my own research so I manage my own S&S ISA, putting money in every month to smooth the bumps, and have a relatively risk-free portfolio spread (compared to the Adventurous you're looking at) . For reference my recent returns (calendar years so Jan-Jan) after the 0.35% platform fee are:

2020: 7.4%
2019: 10.3%
2018: -4.6%
2017: 3.4%
2016: 9.7%

As for holding off - I'd just invest it straight away.
Was just thinking that ... in my mind, you are affecting buying low (so to speak). Also, and I know it all comes out of the same total pot but the £395 will be paid from a different account (not come from the ISA fund).

Just found the breakdown of the fees:

Quote:
Service charges
Ongoing charges
Advance portfolio yearly charge £70.00 (0.35%)
Ongoing adviser remuneration £130.00 (0.65%)
Advance retained interest £0.40 (0.10%)
Total service charges £200.40
Asset costs and charges
One-off charges * £0.00 (0.00%)
Ongoing charges £142.64 (0.71%)
Transaction costs £52.36 (0.26%)
Incidental costs £0.00 (0.00%)
Total asset costs and charges £195.00
Total costs and charges £395.40

Last edited by AdamBrunt; 16-01-2021 at 13:26.
AdamBrunt is offline   Reply With Quote
Old 16-01-2021, 16:01   #90
jmdomain
The Postmaster General
 
jmdomain's Avatar
 
Join Date: Mar 2001
Location: Glasgow
Posts: 4,028
Thanks: 46
Thanked 36 Times in 30 Posts
Quote:
Originally Posted by AdamBrunt View Post
So, according to the blurb it's a total of £395 (and there will be no more charges for another year). I am also assuming the yield doesn't take the fee into account. However, to counter that, we would be in this for the long term - and not a quick profit - and so, hopefully, the yield will start going up way beyond the 2% fee. Or are you suggesting waiting, say, a year and leaving the money - for now - somewhere with a higher than 0.21% return for a year ?

As far as I know, we are just putting one off payments into the portfolio and then doing nothing from our end - it's totally managed for us.

Is a 2% fee good/bad/average ?
I would say 2% is on the high side.

For example at Vanguard I would go for the following two funds:

U.S. Equity Index Fund - This charges 0.10%

Global Bond Index Fund - This charges 0.15%

A combined 0.25% in total.

You would be surprised over 30 years how much (taking compound interest into account) that difference of 1.75% will cost you.
jmdomain is offline   Reply With Quote
Old 16-01-2021, 16:21   #91
cjanderson
2 phalanxs and a catapult
 
cjanderson's Avatar
 
Join Date: Sep 2001
Posts: 36,515
Thanks: 667
Thanked 438 Times in 221 Posts
it sounds like my new pension fund, rather than me picking some funds to invest in, (UK tracker, Japanese tracker etc), I invest in their fund which does all the work.

and yes, that costs money - 1.5% or so annual fee. but I am hoping they should do much better than me picking funds (and me also not bothering to change them around all the time) (they did show me what my funds would have grown each year if I was with them over the last 5 years, than with what I had picked and it was 4-5% better.
cjanderson is offline   Reply With Quote
Old 16-01-2021, 19:34   #92
jmdomain
The Postmaster General
 
jmdomain's Avatar
 
Join Date: Mar 2001
Location: Glasgow
Posts: 4,028
Thanks: 46
Thanked 36 Times in 30 Posts
This article explains things further as a possibility for the OP:

https://www.financialthing.com/best-tracker-funds/
jmdomain is offline   Reply With Quote
Old 17-01-2021, 10:59   #93
AdamBrunt
Trusted User
 
Join Date: Sep 2000
Location: UK
Posts: 26,363
Thanks: 197
Thanked 376 Times in 262 Posts
Quote:
Originally Posted by jmdomain View Post
This article explains things further as a possibility for the OP:

https://www.financialthing.com/best-tracker-funds/
So how does that work in terms of a S&S ISA ?
AdamBrunt is offline   Reply With Quote
Old 17-01-2021, 15:48   #94
jmdomain
The Postmaster General
 
jmdomain's Avatar
 
Join Date: Mar 2001
Location: Glasgow
Posts: 4,028
Thanks: 46
Thanked 36 Times in 30 Posts
Vanguard offer those two funds in the article as well as lots of others.

It would be whatever the cost of the funds are plus Vanguard's annual platform fee of 0.15% of the total funds invested if you go with Vanguard. Whatever you invest will be taken off your ISA allowance.

Once you open an account and invest then you get a dashboard home screen when you log-in from which you can see how much of your ISA allowance is left, rate of return performance etc

They also have a help section with any questions and an option of speaking to someone for any queries you may have.

https://www.vanguardinvestor.co.uk/i...cks-shares-isa

Last edited by jmdomain; 17-01-2021 at 16:25.
jmdomain is offline   Reply With Quote
Thanked once by:
AdamBrunt (17-01-2021)
Old 17-01-2021, 16:47   #95
jockosjungle
Alone in the Atlantic
 
Join Date: Feb 2001
Location: Falkland Islands
Posts: 24,140
Thanks: 291
Thanked 1,315 Times in 927 Posts
Any thoughts on putting a little more into something like this...

I have freetrade and I have £6.74 invested in something called MSCI World, every three months or so it pays a small dividend of on average 2p. It tracks the performance of large and mid cap countries in 23 developed markets and is hedged for GBP. It has risen 20% since I bought it.

Admittedly I only own the 1 share. But I'm wondering if something like this would be suitable for me in the medium term.

I'm also concerned that the few thousnad quid the kids have got would be better off in a some shares than the minimal interest they are receiving.

When I got married, my MIL reminded Kathryn that her she had some old NS&I accounts from when she was little, about £500 invested. We found the stuff and got them paid out and it was close to £3000. I just can't see my kids getting anything like this, I remember back in the day when I was 18, I had an ISA, didn't have to shop around or anything and it consistently paid out 4-5%.

Just thinking an Amazon share each might be a bit more lucrative over the next decade.
jockosjungle is offline   Reply With Quote
Old 17-01-2021, 18:33   #96
jmdomain
The Postmaster General
 
jmdomain's Avatar
 
Join Date: Mar 2001
Location: Glasgow
Posts: 4,028
Thanks: 46
Thanked 36 Times in 30 Posts
Yes, MSCI World, a world index tracker, sounds like it has performed okay for you. It only covers large and mid-caps though.

I'm very wary of buying single stocks, yes, great rewards are there to be had in time but also great risks and can go the other way. I like to get to sleep at night.

I prefer index funds for an easier life as with those, depending on which one you go for you get greater diversification spreading the risk involved. A little bit of e.g. 3500 companies based on weighting so that if a micro-cap company covered by the fund suddenly strikes it lucky with a product and becomes massive you'll still benefit from that growth but not as much as if you had bought that stock individually. However, as the fund will be following the market as a whole, if the market goes down, so will the fund which is where your bonds come in as a protection against those events (as they're less volatile and you can use them to buy more equities at a cheaper price if that happens).

I would be putting as much as you can into your employer pension fund (if with NEST that can be paid out to your benificiaries. You can specify the investment approach as well; aggressive, balanced or cautious). Then either a SIPP or ISA depending on when you think you'll need access to your cash.

I have to add, i'm not a financial advisor nor do I work for Vanguard. Drawing from personal knowledge and experience.

Last edited by jmdomain; 17-01-2021 at 19:04.
jmdomain is offline   Reply With Quote
Old 18-01-2021, 11:45   #97
AdamBrunt
Trusted User
 
Join Date: Sep 2000
Location: UK
Posts: 26,363
Thanks: 197
Thanked 376 Times in 262 Posts
Putting as much as possible into the employer pension fund is fine - but, as I understand it, there will come a time (either as a base rate or 40% tax payer) when you lose the tax incentive to keep putting more money in. For example, if you only actually paid £x of tax at the 40% rate then you can't get more than £x back as 'additional tax relief'

As such there will be amount where, unless your pension fund portfolio is outperforming other options, you should stop paying into the pension.

At least I think that's how it works

Quote:
Originally Posted by jmdomain View Post
Vanguard offer those two funds in the article as well as lots of others.

It would be whatever the cost of the funds are plus Vanguard's annual platform fee of 0.15% of the total funds invested if you go with Vanguard. Whatever you invest will be taken off your ISA allowance.

Once you open an account and invest then you get a dashboard home screen when you log-in from which you can see how much of your ISA allowance is left, rate of return performance etc

They also have a help section with any questions and an option of speaking to someone for any queries you may have.

https://www.vanguardinvestor.co.uk/i...cks-shares-isa
Thanks - will take a look.

And those are funds where you can just dump a load of money in and then forget about (so to speak) except for paying the 0.4% [ if my maths is right ] once a year ? If that is right, and what the financial advisor told me at our last meeting, I am kind of confused now as to what benefit I am getting for the extra 1.6% ?

Last edited by AdamBrunt; 18-01-2021 at 12:05.
AdamBrunt is offline   Reply With Quote
Old 18-01-2021, 13:47   #98
Arthur Fowler
Trusted User
 
Arthur Fowler's Avatar
 
Join Date: Aug 2002
Location: Bedfordshire
Posts: 11,406
Thanks: 1,108
Thanked 523 Times in 304 Posts
Quote:
Originally Posted by AdamBrunt View Post
Putting as much as possible into the employer pension fund is fine - but, as I understand it, there will come a time (either as a base rate or 40% tax payer) when you lose the tax incentive to keep putting more money in. For example, if you only actually paid £x of tax at the 40% rate then you can't get more than £x back as 'additional tax relief'

As such there will be amount where, unless your pension fund portfolio is outperforming other options, you should stop paying into the pension.

At least I think that's how it works
Well if you are doing PAYE then the pension gets taken out of your gross amount, so yes, you are kinda right in that you can only get tax relief on what you have paid in.

But that means you will get tax relief on everything down to £12,500 per year. i.e. your investments start at 20% higher if you are earning up to £50k and 40% higher for anything going into your pension taken out of your >£50k salary.
Arthur Fowler is online now   Reply With Quote
Old 18-01-2021, 15:42   #99
cjanderson
2 phalanxs and a catapult
 
cjanderson's Avatar
 
Join Date: Sep 2001
Posts: 36,515
Thanks: 667
Thanked 438 Times in 221 Posts
i am trying to work out this year if its worth me putting extra into pension when I am now a 20% tax payer.

As you then pay 20% on it when you get the money in the future

Though it also will save me NI won't it at 12% (and employer gives me half of their NI saved) so I get an extra 19% on top of the tax saving.

Before I always tried to get just below 40% band via pension so not thought about the maths of doing it at lower salary levels.
cjanderson is offline   Reply With Quote
Old 18-01-2021, 17:17   #100
jmdomain
The Postmaster General
 
jmdomain's Avatar
 
Join Date: Mar 2001
Location: Glasgow
Posts: 4,028
Thanks: 46
Thanked 36 Times in 30 Posts
Quote:
Originally Posted by AdamBrunt View Post

Thanks - will take a look.

And those are funds where you can just dump a load of money in and then forget about (so to speak) except for paying the 0.4% [ if my maths is right ] once a year ? If that is right, and what the financial advisor told me at our last meeting, I am kind of confused now as to what benefit I am getting for the extra 1.6% ?
Yes, 0.4%.

I would phase it in equal amounts on a monthly basis if putting the full amount in rather than a one-off payment. The way the markets are at the moment i'm thinking a correction is due.

Might be best to call Vanguard and speak to someone about any questions you may have before investing.

As far what benefit you're getting from your financial advisor for that extra 1.6%, that will be be between you and your advisor to determine that. I would be scrutinising their investment prospectus to fully understand their investment strategy as it may or may not be something that you can do yourself. They have the product knowledge and will have passed the necessary financial planning certificates in order to be able to advise clients.

Last edited by jmdomain; 18-01-2021 at 17:24.
jmdomain is offline   Reply With Quote
Reply

Bookmarks

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On

Forum Jump

Similar Threads
Thread Thread Starter Forum Replies Last Post
Large memory not so large processor - best optimisation? Guest 81 Computing Forum 2 28-01-2005 18:57

All times are GMT. The time now is 11:19.


Powered by vBulletin® Version 3.8.9
Copyright ©2000 - 2021, vBulletin Solutions, Inc.qq
Copyright ©2000 - 2021 Network N Ltd.