My wife and I have a mixed portfolio of Shares and Unit Trusts. It has built up gradually over the last 25 years. It has been suggested that we should put it in the hands of a Stockbroker to manage it. The initial charges are
3% followed by 1.25% annual charge. It would seem to me that it might take some time to re coup these charges. Can anybody offer any advice? Is there a minimum value of Portfolio that should be put in the hands of a stockbroker? We are rather nave in the workings of the finance world and would be pleased to receive advice.
Given that you have built it over 25 years, what can a stockbroker do that you cant do for yourselves - except care less if it's value falls.
The workings of the finance world screw you out of fees, whether your investments grow, or diminish! Unless you no longer have the time to manage it yourself, or have been losing money bigtime, it looks like you can save 4.25% in year 1 and 1.25% every year thereafter - not a bad return for nothing
You need to find a 'fund manager' who is also a stockbroker and also one you will give you a bespoke service and not just put you in their 'balanced portfolio'. Dont accept an initial charge and 1.25% seems high if there isnt an intermediary IFA. If the value is less than £100k then it isnt worth it. Dont go to a local broker, there are a couple of decent national brokers with regional offices who will give you a bespoke, bottom up, stock picking service for .5 to .7% per annum.
He he! I note the grin! The test isnt the charges, but if they can give value. Those charges seem high but it is always a mistake to judge investment managers merely by their charges.
I wasnt judging them by their charges, but by the number of people I know who have lost money investing with funds, or endowments, or pensions etc. - you will know what I mean.
It always struck me as strangely unmotivating for fees to be based on the value of a fund, rather than on growth of the fund. "Heads they win, Tails they win"
That's a reasonable idea *if* a stockbroker can prove that they would have managed the money better over the period. That's the first thing that you should get them to demonstrate. A large number fail to even match the index, hence the recent attraction of Index funds or the better value for money Exchange Traded Fund (ETF) alternative .
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Appear comparatively high to me.
Why not use an investment trust like Personal Assets Trust . Set up by the managers as a tax efficient way to manage their own portfolios. They have a remarkably down to earth approach as evidenced in their quarterly reviews which they will send you on request (published every 3 months in addition to the book referred to here).
.....but intelligent enough to find one of the best financial forums in the UK ! The other being although The Motley Fool evengelises about managing your own portfolio. It's not necessary to understand finance, just to be able to locate people who do.
Depending on the amount, it might be worth investigating inheritance tax avoidance strategies eg &
Post again when you've investigated the offerings and people here will be able to comment on their respective merits.
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