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Fund Manager For investing


Hopeful

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Quick question, or more thinking aloud. (posted in shares and investing but seems a bit quiet there)

Need to look after my late Father's investments for my Mother. I know fekk all about investing in the market :-)

Father had a portfolio that could buy a decent house. Did it himself but has been largely unattended for about 6 years, or more, I would guess. It was all a closely guarded secret. His plan was to write a cheque to himself and have it put in his coffin xD

It's very unbalanced, 75% is due to astronomical growth in 10% of the companies, which seem to have been genius picks at the time, but which now looks all a bit risky. Dividend yield OK-ish but overall, its' underperforming in dividends compared to the size of the investment.

Most concerned about maintaining value compared to inflation in case of care home fees and giving Mother an income - she has no decent state pension.

Thinking of putting the whole portfolio with a fund manager due to my lack of knowledge. Fees about 0.85%. Industry standard, but I really don't like giving money away and it makes me think I should DIY.

But a fund manager in my situation is probably a better approach than losing all the value by my making mistakes, right ?

It would leave mother fairly diversified at 50% would be in property and 25% in cash and 75% with the fund manager.

 

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TheCountOfNowhere

I'll look after it for you if you like 

Failing that, get a couple of monkeys up at the zoo to pick some stocks randomly. 

I. E. Trust no one with your money. 

Your father must have been a clever man. 

How do you stand Inheritance tax wise? 

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Not sure exactly what you are looking for,  but my understanding of financial advisers and private “fund managers” is they put you in whatever pays them the biggest commission..  and then keep moving things around regularly to keep tapping those commissions.

If you are happy to stay mostly in shares,  I would look at something like Alliance Trust.   0.65% fees,  pretty balanced global portfolio..

https://www.theaic.co.uk/companydata/0P00008ZLW/gearing

Lots of similar other investment trusts to look at there..  but most have significantly higher fees and (broadly) haven’t performed any better.

Obviously DYOR etc etc.

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Democorruptcy
21 minutes ago, Libspero said:

Not sure exactly what you are looking for,  but my understanding of financial advisers and private “fund managers” is they put you in whatever pays them the biggest commission..  and then keep moving things around regularly to keep tapping those commissions.

If you are happy to stay mostly in shares,  I would look at something like Alliance Trust.   0.65% fees,  pretty balanced global portfolio..

https://www.theaic.co.uk/companydata/0P00008ZLW/gearing

Lots of similar other investment trusts to look at there..  but most have significantly higher fees and (broadly) haven’t performed any better.

Obviously DYOR etc etc.

I have a friend who became worried his current IFA firm were doing that to him. He went to another IFA who couldn't believe they had shifted his stuff around so many times in a relatively short period of time. The new IFA said the initial firm were giving the industry a bad name and for free he would put all the info together so my friend could take it to the Financial Ombudsman for compensation. Turned out the initial firm had switched his investments 27 times, he won the case and got compensation. 

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On 07/02/2020 at 17:59, Hopeful said:

Quick question, or more thinking aloud. (posted in shares and investing but seems a bit quiet there)

Need to look after my late Father's investments for my Mother. I know fekk all about investing in the market :-)

Father had a portfolio that could buy a decent house. Did it himself but has been largely unattended for about 6 years, or more, I would guess. It was all a closely guarded secret. His plan was to write a cheque to himself and have it put in his coffin xD

It's very unbalanced, 75% is due to astronomical growth in 10% of the companies, which seem to have been genius picks at the time, but which now looks all a bit risky. Dividend yield OK-ish but overall, its' underperforming in dividends compared to the size of the investment.

Most concerned about maintaining value compared to inflation in case of care home fees and giving Mother an income - she has no decent state pension.

Thinking of putting the whole portfolio with a fund manager due to my lack of knowledge. Fees about 0.85%. Industry standard, but I really don't like giving money away and it makes me think I should DIY.

But a fund manager in my situation is probably a better approach than losing all the value by my making mistakes, right ?

It would leave mother fairly diversified at 50% would be in property and 25% in cash and 75% with the fund manager.

 

Hopeful, look at the costs...the Vanguard solution suggested by Sir has an annual OCF of 0.22%, and an annual platform fee of 0.15%, so your total costs are 0.37%...your fund manager annual fee is 0.85%...as a result the FM`s alpha (added value of his expertise) is going to have to be at least 0.5% per year consistently year after year for you to `break even`!

Stats (someone will be along in a moment with the exact values that I can't remember) show that few FMs beat an index each year, and even fewer do this consistently...this means that with your limited financial knowledge you have got to pick the winner...how lucky are you feeling?!

 

Note, I am a novice/DYOR, but I know what I would be doing if it was my mothers money that I was risking.

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2 hours ago, MrXxxx said:

Hopeful, look at the costs...the Vanguard solution suggested by Sir has an annual OCF of 0.22%, and an annual platform fee of 0.15%, so your total costs are 0.37%...your fund manager annual fee is 0.85%...as a result the FM`s alpha (added value of his expertise) is going to have to be at least 0.5% per year consistently year after year for you to `break even`!

Stats (someone will be along in a moment with the exact values that I can't remember) show that few FMs beat an index each year, and even fewer do this consistently...this means that with your limited financial knowledge you have got to pick the winner...how lucky are you feeling?!

 

Note, I am a novice/DYOR, but I know what I would be doing if it was my mothers money that I was risking.

Here you go Hopeful

https://m.youtube.com/watch?v=HbqnnKpRO7c

Basically active funds are BEATEN by a passive fund as follows on a S&P Europe 350:-

Over 1yr=59%

Over 3yr=63%

Over 5yr=74%

Over 10yr=87%

So you have less than a 50/50 chance of picking an active fund that would perform better than a passive fund over a single year...and it gets even worse after that and with some of the other indices as well!

This website (Pension Craft) also has a review of the Vanguard fund SiR spoke about as well.

Note: I have no connections with these sites/companies and are not invested with Vanguard.

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