INDEPENDENT financial advice
- Thread starter Hubert
- Start date
OK. Self employed, early 40s. Decent pension amount. Taking a 20+ year view of life.
Pension mainly in cash at present. Did well last few years through index funds, but that was easy. Now not sure where to go next. Plan for 2017, is to leave the lump sum in cash earning next to nothing, invest the 2017 contributions in a European ETF and wait for the market correction/crash and go back in to a US ETF and some quality stocks at hopefully a more realistic value than today. A contradiction I know.
Have trustee costs down to minimum and avoid trading too much to mind fees.
Bad experience of 'wealth management' advice in the past so am reluctant to pay someone to advise me on how to lose money while they get their fees regardless.
Any views appreciated.
Pension mainly in cash at present. Did well last few years through index funds, but that was easy. Now not sure where to go next. Plan for 2017, is to leave the lump sum in cash earning next to nothing, invest the 2017 contributions in a European ETF and wait for the market correction/crash and go back in to a US ETF and some quality stocks at hopefully a more realistic value than today. A contradiction I know.
Have trustee costs down to minimum and avoid trading too much to mind fees.
Bad experience of 'wealth management' advice in the past so am reluctant to pay someone to advise me on how to lose money while they get their fees regardless.
Any views appreciated.
Steven Barrett
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Stick it in a global index fund for the next 20 years and forget about it.
You may get lucky timing the market once or twice but overall you will miss out on growth and lose money.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
You may get lucky timing the market once or twice but overall you will miss out on growth and lose money.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
Steven Barrett
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If he's self employed, he will be in a self directed pension and won't need a pensioneer trustee. Also, a PT doesn't give investment advice, they just make sure you aren't up to no good.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
Ah, but where's all the fun and excitment in that Steven ?
... at least encourage the original poster to split the money into a few investments, rather than put it all into one fund
The original poster is early 40s with excess 20-years to retirement, so there's plenty of time to smooth out some losses and yet benefit from potential upsides, so at least bring a little excitment into the equation will you ?
Personally, I'd be slow to go all into a global index fund btw, think it's too conservative for someone in their early 40s thinking 20-years ahead to invest everything in that and particularly, if they are expected to keep earning so probably able to make further ongoing contributions etc. Lets have a bit of exposure to long term alternative investments - be it hedge funds, wind power, national infrastructure etc.
Personally, I think it's pretty aggressive for somebody in their 40s to have 100% of their assets invested in equities - however geographically diversified the portfolio.
The largest stock market on the planet (the US) took 25 years to fully recover after the 1929 crash and the second largest stock market on the planet (Japan) has yet to surpass the heights reached in 1989. More to the point, all developed markets have had 30-year periods in the past where domestic bonds beat domestic stocks.
I certainly don't think it's a good idea to try and time the stock market but there is a happy medium for most folk...
And that doesn't involve investing in hedge funds!
The largest stock market on the planet (the US) took 25 years to fully recover after the 1929 crash and the second largest stock market on the planet (Japan) has yet to surpass the heights reached in 1989. More to the point, all developed markets have had 30-year periods in the past where domestic bonds beat domestic stocks.
I certainly don't think it's a good idea to try and time the stock market but there is a happy medium for most folk...
And that doesn't involve investing in hedge funds!
I must say that I am glued to this thread. I'm in my sixties and about to retire. I have used independent financial advisors over time and all I can say that if I did it my way, by now I would be financially a lot better off. But, I trusted these bods who took their commission no matter what the losses and later came up with every excuse to justify their tepid efforts. I should add here that one financial firm made a fairly good profit for me. , The whole effort was pretty worrying. I didn't know if I was being conned or just used to make some dough for others.
In another thread of this forum I praised a guy with whom I used to work (a junior public servant who was a terrific investor/gambler and walked the talk) who used a stockbroking firm every Monday/Tuesday and cash in on Thursday. He used to bet on GAA matches too with the local bookie (as part of his investment club) and at the end of each year showed a terrific profit (25%) for those who trusted him with £100.00 per week each. It was fun too. We were making money.
I wish I could advise Hubert on what independent financial person to use. But, once bitten, twice shy . . .
In another thread of this forum I praised a guy with whom I used to work (a junior public servant who was a terrific investor/gambler and walked the talk) who used a stockbroking firm every Monday/Tuesday and cash in on Thursday. He used to bet on GAA matches too with the local bookie (as part of his investment club) and at the end of each year showed a terrific profit (25%) for those who trusted him with £100.00 per week each. It was fun too. We were making money.
I wish I could advise Hubert on what independent financial person to use. But, once bitten, twice shy . . .
Steven Barrett
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Ah, but where's all the fun and excitment in that Steven ?
... at least encourage the original poster to split the money into a few investments, rather than put it all into one fund
The original poster is early 40s with excess 20-years to retirement, so there's plenty of time to smooth out some losses and yet benefit from potential upsides, so at least bring a little excitment into the equation will you ?
Personally, I'd be slow to go all into a global index fund btw, think it's too conservative for someone in their early 40s thinking 20-years ahead to invest everything in that and particularly, if they are expected to keep earning so probably able to make further ongoing contributions etc. Lets have a bit of exposure to long term alternative investments - be it hedge funds, wind power, national infrastructure etc.
I know, it is boring advice. Stick in a fund that captures each country's market capitalisation and capture the power of the markets and at a lower cost. Absolutely no fun in that!
But then, I got a letter yesterday from the company that runs a Polish property investment I went into in 2008. They said that my investment is worth 37.5% of what I put in. That was an exciting investment...
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
Steven Barrett
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Leper
Unfortunately, there are a lot of advisors out there that while you are telling them what you are looking for, they are calculating the commission they can get by sticking you in a high charge product that pays out large commissions. They put you in the fund of the day with little justification except the rep from that insurance company bought them lunch earlier in the day (disclaimer: they buy me lunch too!).
There are however, a lot of advisors who have changed their business model to one focusing on a long term relationship with clients.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
Unfortunately, there are a lot of advisors out there that while you are telling them what you are looking for, they are calculating the commission they can get by sticking you in a high charge product that pays out large commissions. They put you in the fund of the day with little justification except the rep from that insurance company bought them lunch earlier in the day (disclaimer: they buy me lunch too!).
There are however, a lot of advisors who have changed their business model to one focusing on a long term relationship with clients.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
....But then, I got a letter yesterday from the company that runs a Polish property investment I went into in 2008. They said that my investment is worth 37.5% of what I put in. That was an exciting investment...
While I know I'm taking this thread even more off topic, I think we've all learned a few important lessons when it comes to investing in the old property syndicates... heavily geared, absolute exit dates, promoters creaming in the fees without performing etc. etc. Most of these investments were made during the boom years, where we were all too busy taking over the world to stop and ask why a particular deal was a "no brainer" or whatever. Important lessons learnt, but not reason to ignore investing in different asset classes to reduce the overall portfolio risk
Steven Barrett
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Tell me about it. The first syndicate they ran returned 150%!! The one I was in closed Paddy's weekend in 2008, when the financial markets collapsed. Bad timing.
Wouldn't go anywhere near them now and don't advise on them either, my PII doesn't cover me against them.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
Wouldn't go anywhere near them now and don't advise on them either, my PII doesn't cover me against them.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
Anyway,
I hope that you appreciate that I was referring to more appropriate methods of long term investment in other assets classes, rather than the "wonderful" highly geared SPVs that popped up two a penny during the naughties, offering all sorts of wonderful opportunities to invest in locations we couldn't find on a map with "guaranteed" rents for fixed terms etc.
Sensible diversification across a number of asset classes is still a better idea than putting all your eggs in one basket for a long term investor, as I see it - regardless of whether they are investing it all in a cash based savings account, or all invested in a global index fund
I hope that you appreciate that I was referring to more appropriate methods of long term investment in other assets classes, rather than the "wonderful" highly geared SPVs that popped up two a penny during the naughties, offering all sorts of wonderful opportunities to invest in locations we couldn't find on a map with "guaranteed" rents for fixed terms etc.
Sensible diversification across a number of asset classes is still a better idea than putting all your eggs in one basket for a long term investor, as I see it - regardless of whether they are investing it all in a cash based savings account, or all invested in a global index fund
Thanks for this. The GAA man sounds like a good bet! He's hardly set up to do this full time is he?!
On the polish property fund, I was in a similar UK zone where we got back 40% when the stockbroker selling the thing had taken 15% in all sorts of fees. I just think the industry is more out for itself than to provide good advice and when the likes of me go looking for a steer you are just there to be milked.
As a trial last year I met 3 advisers, 2 I wouldn't let down to shop to buy a carton of eggs. They each did their profile/risk analysis which was top level at best. Then all they wanted to do was flog me product which when I researched it was heavily loaded with fees, mixed performance. They Lost interest when I wasn't too keen on opening up the purse strings easily. Maybe it's an education thing but they all were QFAs but then I suppose it's like accountants, doctors.... there's good and bad.
I'm coming to a few conclusions the more I read.
I'm going to keep the fund in 4 areas not equally proportioned - cash/quality stocks/indexing/sex and violence to keep me from ruining the rest of it. I'm not going to give them equal weighting. I'm not going near property in the fund as I'm exposed to that outside the pension.
On timing the market, everything I read tells me this is a bull market in the US so I'm going to stay in cash for the next 12 months and see what happens on that front. If it pulls back I'll average in a decent amount over 3 years and then keep going with regular contributions. If it stays elevated I'll average in but with smaller amounts over a much longer time period.
I'm thinking to build with 4-5 core low cost ETFs - S&P, Euro, Emerging, Hi Div and one area yet to be selected. But weightings wont be equal. I think emerging are cheaper for a reason. On when to buy, US plan is as above, Euro will start shortly dripping in but will see how politics go this year, emerging will start dripping in and hi div is a longer term plan so will drip in slowly.
I can't see value in bonds given the entire QE issue so that's out of the plan for the moment. So cash will be held in cash, the interest is feck all but if rates tick up at all and the greedy banks pass something on that could help. I've been reading about inflation linked bonds but I need to understand them more before I would consider but again it's down the line. I'm going to hold a lot in cash for the next year or two in case there is fall back and I can use some of the cash to increase exposure.
On quality stocks, I'll pick a few up that I understand as the year goes on and put them away for long term. I bought one yesterday which for no reason dropped back a bit in the last 6 months. Mr market and all that. I'm also going to buy one or two long established U.K. investment trusts.
The above are all long term hold stuff, just keep an eye on it.
And on the sex and violence, that's really where I'm going to buy what I think are undervalued assets of any kind once they are liquid, my only rule is going to be spreading the bets so if one/two blows up we don't have a problem. And if we do then I only have myself to blame! I'm staying out of hedge funds, private equity funds, commodities and gold.
After that the plan is to keep going with the contributions and minimise the costs. What do ye think?
On the polish property fund, I was in a similar UK zone where we got back 40% when the stockbroker selling the thing had taken 15% in all sorts of fees. I just think the industry is more out for itself than to provide good advice and when the likes of me go looking for a steer you are just there to be milked.
As a trial last year I met 3 advisers, 2 I wouldn't let down to shop to buy a carton of eggs. They each did their profile/risk analysis which was top level at best. Then all they wanted to do was flog me product which when I researched it was heavily loaded with fees, mixed performance. They Lost interest when I wasn't too keen on opening up the purse strings easily. Maybe it's an education thing but they all were QFAs but then I suppose it's like accountants, doctors.... there's good and bad.
I'm coming to a few conclusions the more I read.
I'm going to keep the fund in 4 areas not equally proportioned - cash/quality stocks/indexing/sex and violence to keep me from ruining the rest of it. I'm not going to give them equal weighting. I'm not going near property in the fund as I'm exposed to that outside the pension.
On timing the market, everything I read tells me this is a bull market in the US so I'm going to stay in cash for the next 12 months and see what happens on that front. If it pulls back I'll average in a decent amount over 3 years and then keep going with regular contributions. If it stays elevated I'll average in but with smaller amounts over a much longer time period.
I'm thinking to build with 4-5 core low cost ETFs - S&P, Euro, Emerging, Hi Div and one area yet to be selected. But weightings wont be equal. I think emerging are cheaper for a reason. On when to buy, US plan is as above, Euro will start shortly dripping in but will see how politics go this year, emerging will start dripping in and hi div is a longer term plan so will drip in slowly.
I can't see value in bonds given the entire QE issue so that's out of the plan for the moment. So cash will be held in cash, the interest is feck all but if rates tick up at all and the greedy banks pass something on that could help. I've been reading about inflation linked bonds but I need to understand them more before I would consider but again it's down the line. I'm going to hold a lot in cash for the next year or two in case there is fall back and I can use some of the cash to increase exposure.
On quality stocks, I'll pick a few up that I understand as the year goes on and put them away for long term. I bought one yesterday which for no reason dropped back a bit in the last 6 months. Mr market and all that. I'm also going to buy one or two long established U.K. investment trusts.
The above are all long term hold stuff, just keep an eye on it.
And on the sex and violence, that's really where I'm going to buy what I think are undervalued assets of any kind once they are liquid, my only rule is going to be spreading the bets so if one/two blows up we don't have a problem. And if we do then I only have myself to blame! I'm staying out of hedge funds, private equity funds, commodities and gold.
After that the plan is to keep going with the contributions and minimise the costs. What do ye think?
If you are actually looking for independent financial advice then it is best to go to someone who is actually independent and doesn't produce their own products.
See below list from the Pensions Authority website. All of the larger providers are incentivised to advise you to buy their own products as they are making a taking a fee on the product as well as the advice. It's best to go for one of the more reputable smaller advisors who do not have a vested interest. BCWM (Bastow Charleton) and Independent Trustees are your best bets from this list as they are only taking a fee on the advice and not the product. They will also likely give you a fixed fee.
Johnsoner
Ark Life Assurance Ireland Ltd.
Aviva Life & Pensions Ireland Limited.
BCWM plc
Custom House Capital Ltd. (In Liquidation)
Davy
Friends First Life Assurance Co. Ltd.
Goodbody Stockbrokers
Independent Trustee Company Limited
Irish Life Assurance plc
Merrion Stockbrokers Ltd
Newcourt Retirement Fund Managers Limited
New Ireland Assurance Co. plc/Bank of Ireland Life
Standard Life Assurance Limited
Zurich Life Assurance plc.
Steven Barrett
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All of those are product producers in their own right.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)