Back to P2P, if I may. I am very satisfied with my first year with three big players, Zopa, Ratesetter and Funding Circle. However I am getting worried about the increasing concerns expressed about the rapid rise in consumer debt. Initially I am thinking of gradually pulling money out of Zopa, because they keep buggering about with their offer for somewhat opaque reasons, but putting the money withdrawn into Funding Circle, which lends to businesses - and offers a higher return because of perceived higher risk.
Any comments on that? At present my P2P portfolio is about 13% of my total, but 60% is in cash, including Premium Bonds. I see a loss on my P2P as less likely than a stock market correction which would damage my unit Trust portfolio.
I'm currently using a P2P platform, Assetz Capital, seems to be pretty good so far, you can either invest in a fund, where they will then diversify your portfolio for you, with a provision fund for any losses, or you can manually lend yourself (with no provision fund), although they cream cash off the top of the provision fund from what I can tell, so I have chosen to manually lend.
Everything is asset/guarantee backed. Pretty good so far, and I am looking at about 7.8% before any bad debts are taken into account. There is also a healthy secondary market.
Been impressed by Revolut so far, no issues and a decent option when travelling. Think the trading platform will only be available for premium customers....... so not really free, but good to have some competition that might bring down trading fees elsewhere.
Agreed. Have used their FX platform for the last couple of years and then use their Mastercard abroad with the loaded currencies. Rates far better than tourist rates and never had an issue.
Unimpressed with Barclays Smart Investor since they "upgraded" from MarketMaster...and I work for them (the Bank, not the Stockbroker part)! Will look at a few other options.
I'm going to be at the point where money earned on interest is above the £1k threshold (I am basic rate taxpayer).
I have done a bit of reading online and it says HMRC will adjust my taxcode (ie my personal allowance) next year to reflect this.
How will they know what I make in interest?
I don't currently fill out a self assessment tax return and I am a PAYE employee, although on a sidenote I might start doing accountancy/bookkeeping self employed or through a company, so this may change...
I'm going to be at the point where money earned on interest is above the £1k threshold (I am basic rate taxpayer).
I have done a bit of reading online and it says HMRC will adjust my taxcode (ie my personal allowance) next year to reflect this.
How will they know what I make in interest?
I don't currently fill out a self assessment tax return and I am a PAYE employee, although on a sidenote I might start doing accountancy/bookkeeping self employed or through a company, so this may change...
One good reason to open an ISA. You might then be able to get your 'non ISA' interest below the £1K allowance.
You can do the sums as to whether the net interest left after paying tax on the element over £1K exceeds what you could earn in an ISA tax free. If you have found an exceptional rate then it might.
EDIT: HMRC are told by banks / building societies what interest you have earned that is not covered by an ISA.
Probably a statement of the obvious, as most posters on this thread appear to be pretty prosperous so probably do not have any credit, but it invariably costs more in interest on borrowed money than can be earned in interest on saved money.
Therefore, all else being equal, use any surplus money to pay off loans, credit cards, mortgages etc before thinking about investing. The real return will usually be more.
I'm going to be at the point where money earned on interest is above the £1k threshold (I am basic rate taxpayer).
I have done a bit of reading online and it says HMRC will adjust my taxcode (ie my personal allowance) next year to reflect this.
How will they know what I make in interest?
I don't currently fill out a self assessment tax return and I am a PAYE employee, although on a sidenote I might start doing accountancy/bookkeeping self employed or through a company, so this may change...
One good reason to open an ISA. You might then be able to get your 'non ISA' interest below the £1K allowance.
You can do the sums as to whether the net interest left after paying tax on the element over £1K exceeds what you could earn in an ISA tax free. If you have found an exceptional rate then it might.
EDIT: HMRC are told by banks / building societies what interest you have earned that is not covered by an ISA.
Thanks, regarding an ISA, I did the maths, and prefer the help to buy ISA, which (up until next month) was paying me 3.5% PA, and then has a 25% bonus when I purchase a property. Shame it only allows £200 a month to put in though, but have taken one out in both mine and my partners names, so is a very tax efficient way to save, and with a very good bonus.
Thanks regarding what HMRC are told, I am guessing this is the same for P2P lenders etc?
Been impressed by Revolut so far, no issues and a decent option when travelling. Think the trading platform will only be available for premium customers....... so not really free, but good to have some competition that might bring down trading fees elsewhere.
Agreed. Have used their FX platform for the last couple of years and then use their Mastercard abroad with the loaded currencies. Rates far better than tourist rates and never had an issue.
Unimpressed with Barclays Smart Investor since they "upgraded" from MarketMaster...and I work for them (the Bank, not the Stockbroker part)! Will look at a few other options.
Yep , you wont beat their FX rates anywhere , they are spot trading rates .
I'm going to be at the point where money earned on interest is above the £1k threshold (I am basic rate taxpayer).
I have done a bit of reading online and it says HMRC will adjust my taxcode (ie my personal allowance) next year to reflect this.
How will they know what I make in interest?
I don't currently fill out a self assessment tax return and I am a PAYE employee, although on a sidenote I might start doing accountancy/bookkeeping self employed or through a company, so this may change...
One good reason to open an ISA. You might then be able to get your 'non ISA' interest below the £1K allowance.
You can do the sums as to whether the net interest left after paying tax on the element over £1K exceeds what you could earn in an ISA tax free. If you have found an exceptional rate then it might.
EDIT: HMRC are told by banks / building societies what interest you have earned that is not covered by an ISA.
Be careful on that one, it is your responsibility to tell the HMRC, not the banks, who in my experience don't on a blanket basis tell HMRC.
I'm going to be at the point where money earned on interest is above the £1k threshold (I am basic rate taxpayer).
I have done a bit of reading online and it says HMRC will adjust my taxcode (ie my personal allowance) next year to reflect this.
How will they know what I make in interest?
I don't currently fill out a self assessment tax return and I am a PAYE employee, although on a sidenote I might start doing accountancy/bookkeeping self employed or through a company, so this may change...
One good reason to open an ISA. You might then be able to get your 'non ISA' interest below the £1K allowance.
You can do the sums as to whether the net interest left after paying tax on the element over £1K exceeds what you could earn in an ISA tax free. If you have found an exceptional rate then it might.
EDIT: HMRC are told by banks / building societies what interest you have earned that is not covered by an ISA.
Be careful on that one, it is your responsibility to tell the HMRC, not the banks, who in my experience don't on a blanket basis tell HMRC.
Absolutely right it is your responsibility to tell HMRC.
However the question asked was how will they (HMRC) know and in my experience banks and building societies often, even generally, DO tell HMRC.
I recently helped out a recently widowed woman, also suffering with leukaemia, who was being aggressively hounded by the big, brave boys of HMRC because she hadn't declared less than £200 in interest.
There was nothing sinister about the non-declaration at all. She got 'caught' by the change from the interest being paid net to being paid gross as the combination of her bereavement and illness meant she 'took her eye off the ball.' Oh that HMRC displayed such zeal and aggression with less vulnerable and more mendacious taxpayers as they did towards that poor lady!
HMRC openly told me when I was attempting to establish exactly what had happened that the financial institution had given them the information and that was quite usual.
That said, as you correctly point out, it is without doubt YOUR duty to tell HMRC of interest earned and not the responsibility of the financial institution.
Probably a statement of the obvious, as most posters on this thread appear to be pretty prosperous so probably do not have any credit, but it invariably costs more in interest on borrowed money than can be earned in interest on saved money.
Therefore, all else being equal, use any surplus money to pay off loans, credit cards, mortgages etc before thinking about investing. The real return will usually be more.
Sorry but I disagree. High rate credit cards maybe but not a mortgage. Most borrowers can get a mortgage sub 2% if LTV is below 80%. Any spare money could be drip-fed into an equity based ISA and over a 3-5 year period earn a decent 6-8pa return. This money could then be used in any manner or ways, one being to pay a chunk off the mortgage after that time. What happens, if after 3 years, you suddenly need £10k & have been overpaying your mortgage. You can't generally get the £10k back from your lender....
Looking at stock and shares isa small scale monthly investments. At work we have a vanguard lifestyle fund which has performed well but compassion sites recommend nutmeg. Any advice?
Looking at stock and shares isa small scale monthly investments. At work we have a vanguard lifestyle fund which has performed well but compassion sites recommend nutmeg. Any advice?
Vanguard are index tracker funds - cheap but not very awe inspiring. Seen nutmeg ads on tv but don't know much about them. How much pm were you thinking ??
Looking at stock and shares isa small scale monthly investments. At work we have a vanguard lifestyle fund which has performed well but compassion sites recommend nutmeg. Any advice?
Vanguard are index tracker funds - cheap but not very awe inspiring. Seen nutmeg ads on tv but don't know much about them. How much pm were you thinking ??
you could look at active multi-manager funds such as Jupiter Merlin or Old Mutual's Cirillium range....but they are expensive. Or you could just pay an IFA for their advice who will then assess you attitude to risk and, if they were anything like me, select a number of top performing funds to make up a portfolio for you...
Probably a statement of the obvious, as most posters on this thread appear to be pretty prosperous so probably do not have any credit, but it invariably costs more in interest on borrowed money than can be earned in interest on saved money.
Therefore, all else being equal, use any surplus money to pay off loans, credit cards, mortgages etc before thinking about investing. The real return will usually be more.
Sorry but I disagree. High rate credit cards maybe but not a mortgage. Most borrowers can get a mortgage sub 2% if LTV is below 80%. Any spare money could be drip-fed into an equity based ISA and over a 3-5 year period earn a decent 6-8pa return. This money could then be used in any manner or ways, one being to pay a chunk off the mortgage after that time. What happens, if after 3 years, you suddenly need £10k & have been overpaying your mortgage. You can't generally get the £10k back from your lender....
I agree with you that if you can earn more interest from savings than you are paying out in loans then it makes sense to do so.
However for many people that is not the case and that is the point. How many first time buyers will have a 20% deposit in order to take advantage of sub 2% mortgage rates?
I did use the phrase 'all else being equal' to acknowledge the type of scenario you mention.
Looking at stock and shares isa small scale monthly investments. At work we have a vanguard lifestyle fund which has performed well but compassion sites recommend nutmeg. Any advice?
Vanguard are index tracker funds - cheap but not very awe inspiring. Seen nutmeg ads on tv but don't know much about them. How much pm were you thinking ??
Probably £250 in first instance
I'm not an IFA so difficult to advise which funds on a message board without knowing your risk appetite etc. Seeking out an IFA for you would be worthwhile.
If not it's worth taking some time and doing some homework on the multitude of funds, their fee's and performance as well as platform fee's. Vanguard (I assume you mean life strategy) isn't great performer to be honest. As a start Fidelity have a 'top 50' funds which is worth looking through, a number are their own but many aren't. You'll see the prior 12 months performance of their top 50 are mostly double digit returns, some over 40%.
A few worth considering and this is the 5 year average annual performance;
Rathbone Global Opportunities Fund 17.49% Franklin UK Smaller Companies Fund 16.44% Fidelity American Special Situations Fund 15.13% LF Lindsell Train UK Equity Fund 14% Stewart Investors Asia Pacific Leaders Fund 11.14%
You could do worse than putting £50 in each of those a month IMHO.
@Rob7Lee You don't need me to tell you that the Vanguard big pitch is the ultra low fees they charge that take a nibble out of your gains in all funds. So when you compare Vanguard Life strategy to the above funds you mentioned, are the performance figures in all cases after fees? ( I don't know, it seems a very murky area, which Vanguard are trying to disrupt)
I also think you have selected there some funds that ought to do a lot better than Vanguard LS, because they are much higher risk. I think someone like @kimbo would want some solid lower risk funds alongside those you have mentioned.
Looking at stock and shares isa small scale monthly investments. At work we have a vanguard lifestyle fund which has performed well but compassion sites recommend nutmeg. Any advice?
I'm experimenting with Moneyfarm a bit at the moment. A competitor to Nutmeg with no minimum contributions.
I find Moneytothemasses.com is quite a good site for advice and comparisons.
Looking at stock and shares isa small scale monthly investments. At work we have a vanguard lifestyle fund which has performed well but compassion sites recommend nutmeg. Any advice?
Vanguard are index tracker funds - cheap but not very awe inspiring. Seen nutmeg ads on tv but don't know much about them. How much pm were you thinking ??
Probably £250 in first instance
I'm not an IFA so difficult to advise which funds on a message board without knowing your risk appetite etc. Seeking out an IFA for you would be worthwhile.
If not it's worth taking some time and doing some homework on the multitude of funds, their fee's and performance as well as platform fee's. Vanguard (I assume you mean life strategy) isn't great performer to be honest. As a start Fidelity have a 'top 50' funds which is worth looking through, a number are their own but many aren't. You'll see the prior 12 months performance of their top 50 are mostly double digit returns, some over 40%.
A few worth considering and this is the 5 year average annual performance;
Rathbone Global Opportunities Fund 17.49% Franklin UK Smaller Companies Fund 16.44% Fidelity American Special Situations Fund 15.13% LF Lindsell Train UK Equity Fund 14% Stewart Investors Asia Pacific Leaders Fund 11.14%
You could do worse than putting £50 in each of those a month IMHO.
Fidelity also quite good at letting you choose ready made funds and portfolios based on your risk appetite.
Back to P2P, if I may. I am very satisfied with my first year with three big players, Zopa, Ratesetter and Funding Circle. However I am getting worried about the increasing concerns expressed about the rapid rise in consumer debt. Initially I am thinking of gradually pulling money out of Zopa, because they keep buggering about with their offer for somewhat opaque reasons, but putting the money withdrawn into Funding Circle, which lends to businesses - and offers a higher return because of perceived higher risk.
Any comments on that? At present my P2P portfolio is about 13% of my total, but 60% is in cash, including Premium Bonds. I see a loss on my P2P as less likely than a stock market correction which would damage my unit Trust portfolio.
I'm currently using a P2P platform, Assetz Capital, seems to be pretty good so far, you can either invest in a fund, where they will then diversify your portfolio for you, with a provision fund for any losses, or you can manually lend yourself (with no provision fund), although they cream cash off the top of the provision fund from what I can tell, so I have chosen to manually lend.
Everything is asset/guarantee backed. Pretty good so far, and I am looking at about 7.8% before any bad debts are taken into account. There is also a healthy secondary market.
Hi @Huskaris, thanks for that tip. A mate of mine who has always been a smart investor (was doing buy to let before the phrase was coined) is confident about P2P, and , and he has directed me to this website which aims to monitor the sector and help compare lenders (they like your guys). Hopefully it's the place to get an early warning if a lender is starting to run into trouble, which i think is the key to P2P. If you get that early warning you might be able to bale out. As mug punters we never get that chance with equity markets.
@Rob7Lee You don't need me to tell you that the Vanguard big pitch is the ultra low fees they charge that take a nibble out of your gains in all funds. So when you compare Vanguard Life strategy to the above funds you mentioned, are the performance figures in all cases after fees? ( I don't know, it seems a very murky area, which Vanguard are trying to disrupt)
I also think you have selected there some funds that ought to do a lot better than Vanguard LS, because they are much higher risk. I think someone like @kimbo would want some solid lower risk funds alongside those you have mentioned.
I don't know @kimbo risk appetite hence at the start suggesting an IFA. My own view on the risk of those funds maybe isn't as high as yours (or Kimbo's) paying in a regular mostly amount over a long period removes a lot of that risk IMHO as you are buying monthly through a cycle/the long term.
Returns I think are after charges, but would need to check.
Yes Vanguard have lower fee's than the funds I mentioned, but other trackers also do, L&G have the lowest, half the vanguard rate in many instances. I'd rather invest in a fund that has a 5 year average of 10%+ that takes 0.75% charge than one that has an average of 4% with a 0.25% charge.
The difficulty with having more funds is limited by the £250 monthly amount.
@Rob7Lee You don't need me to tell you that the Vanguard big pitch is the ultra low fees they charge that take a nibble out of your gains in all funds. So when you compare Vanguard Life strategy to the above funds you mentioned, are the performance figures in all cases after fees? ( I don't know, it seems a very murky area, which Vanguard are trying to disrupt)
I also think you have selected there some funds that ought to do a lot better than Vanguard LS, because they are much higher risk. I think someone like @kimbo would want some solid lower risk funds alongside those you have mentioned.
I don't know @kimbo risk appetite hence at the start suggesting an IFA. My own view on the risk of those funds maybe isn't as high as yours (or Kimbo's) paying in a regular mostly amount over a long period removes a lot of that risk IMHO as you are buying monthly through a cycle/the long term.
Returns I think are after charges, but would need to check.
Yes Vanguard have lower fee's than the funds I mentioned, but other trackers also do, L&G have the lowest, half the vanguard rate in many instances. I'd rather invest in a fund that has a 5 year average of 10%+ that takes 0.75% charge than one that has an average of 4% with a 0.25% charge.
The difficulty with having more funds is limited by the £250 monthly amount.
@Rob7Lee You don't need me to tell you that the Vanguard big pitch is the ultra low fees they charge that take a nibble out of your gains in all funds. So when you compare Vanguard Life strategy to the above funds you mentioned, are the performance figures in all cases after fees? ( I don't know, it seems a very murky area, which Vanguard are trying to disrupt)
I also think you have selected there some funds that ought to do a lot better than Vanguard LS, because they are much higher risk. I think someone like @kimbo would want some solid lower risk funds alongside those you have mentioned.
I don't know @kimbo risk appetite hence at the start suggesting an IFA. My own view on the risk of those funds maybe isn't as high as yours (or Kimbo's) paying in a regular mostly amount over a long period removes a lot of that risk IMHO as you are buying monthly through a cycle/the long term.
Returns I think are after charges, but would need to check.
Yes Vanguard have lower fee's than the funds I mentioned, but other trackers also do, L&G have the lowest, half the vanguard rate in many instances. I'd rather invest in a fund that has a 5 year average of 10%+ that takes 0.75% charge than one that has an average of 4% with a 0.25% charge.
The difficulty with having more funds is limited by the £250 monthly amount.
Thanks all. You are right I need a IFA despite being a FD I have very limited experience with investments.
Looking at stock and shares isa small scale monthly investments. At work we have a vanguard lifestyle fund which has performed well but compassion sites recommend nutmeg. Any advice?
Vanguard are index tracker funds - cheap but not very awe inspiring. Seen nutmeg ads on tv but don't know much about them. How much pm were you thinking ??
Probably £250 in first instance
I'm not an IFA so difficult to advise which funds on a message board without knowing your risk appetite etc. Seeking out an IFA for you would be worthwhile.
If not it's worth taking some time and doing some homework on the multitude of funds, their fee's and performance as well as platform fee's. Vanguard (I assume you mean life strategy) isn't great performer to be honest. As a start Fidelity have a 'top 50' funds which is worth looking through, a number are their own but many aren't. You'll see the prior 12 months performance of their top 50 are mostly double digit returns, some over 40%.
A few worth considering and this is the 5 year average annual performance;
Rathbone Global Opportunities Fund 17.49% Franklin UK Smaller Companies Fund 16.44% Fidelity American Special Situations Fund 15.13% LF Lindsell Train UK Equity Fund 14% Stewart Investors Asia Pacific Leaders Fund 11.14%
You could do worse than putting £50 in each of those a month IMHO.
Pleasing - bit of an amateur but have been in three of those for the passed couple of years with LH. Despite stopping investing in it and just leaving it to simmer, have seen an 8% return in just the last three months.
Now investing in something less volatile and more liquid as I may need to release some significant monies in the next year or so (so much for downsizing?)
@Rob7Lee You don't need me to tell you that the Vanguard big pitch is the ultra low fees they charge that take a nibble out of your gains in all funds. So when you compare Vanguard Life strategy to the above funds you mentioned, are the performance figures in all cases after fees? ( I don't know, it seems a very murky area, which Vanguard are trying to disrupt)
I also think you have selected there some funds that ought to do a lot better than Vanguard LS, because they are much higher risk. I think someone like @kimbo would want some solid lower risk funds alongside those you have mentioned.
I don't know @kimbo risk appetite hence at the start suggesting an IFA. My own view on the risk of those funds maybe isn't as high as yours (or Kimbo's) paying in a regular mostly amount over a long period removes a lot of that risk IMHO as you are buying monthly through a cycle/the long term.
Returns I think are after charges, but would need to check.
Yes Vanguard have lower fee's than the funds I mentioned, but other trackers also do, L&G have the lowest, half the vanguard rate in many instances. I'd rather invest in a fund that has a 5 year average of 10%+ that takes 0.75% charge than one that has an average of 4% with a 0.25% charge.
The difficulty with having more funds is limited by the £250 monthly amount.
@Rob7Lee You don't need me to tell you that the Vanguard big pitch is the ultra low fees they charge that take a nibble out of your gains in all funds. So when you compare Vanguard Life strategy to the above funds you mentioned, are the performance figures in all cases after fees? ( I don't know, it seems a very murky area, which Vanguard are trying to disrupt)
I also think you have selected there some funds that ought to do a lot better than Vanguard LS, because they are much higher risk. I think someone like @kimbo would want some solid lower risk funds alongside those you have mentioned.
I don't know @kimbo risk appetite hence at the start suggesting an IFA. My own view on the risk of those funds maybe isn't as high as yours (or Kimbo's) paying in a regular mostly amount over a long period removes a lot of that risk IMHO as you are buying monthly through a cycle/the long term.
Returns I think are after charges, but would need to check.
Yes Vanguard have lower fee's than the funds I mentioned, but other trackers also do, L&G have the lowest, half the vanguard rate in many instances. I'd rather invest in a fund that has a 5 year average of 10%+ that takes 0.75% charge than one that has an average of 4% with a 0.25% charge.
The difficulty with having more funds is limited by the £250 monthly amount.
Thanks all. You are right I need a IFA despite being a FD I have very limited experience with investments.
This won't make @golfaddick happy but I am not sure whether with the amounts you want to invest, and the regular payments you intend, an IFA would give you value for money. I reckon you could read up, chooses cautious and low cost funds, and start to build up your investments yourself, and nothing bad will happen. I think once you have built up a sizeable pot of money, maybe 5k plus, it might be worth getting one who comes recommended to do a one off review of your investments. But that's all, I think. It is so much easier nowadays for people to invest directly in funds and stay on top of their progress. The most user friendly and comprehensive funds supermarkets are Fidelity, and Hargreaves Lansdowne, which I use.
@Rob7Lee You don't need me to tell you that the Vanguard big pitch is the ultra low fees they charge that take a nibble out of your gains in all funds. So when you compare Vanguard Life strategy to the above funds you mentioned, are the performance figures in all cases after fees? ( I don't know, it seems a very murky area, which Vanguard are trying to disrupt)
I also think you have selected there some funds that ought to do a lot better than Vanguard LS, because they are much higher risk. I think someone like @kimbo would want some solid lower risk funds alongside those you have mentioned.
I don't know @kimbo risk appetite hence at the start suggesting an IFA. My own view on the risk of those funds maybe isn't as high as yours (or Kimbo's) paying in a regular mostly amount over a long period removes a lot of that risk IMHO as you are buying monthly through a cycle/the long term.
Returns I think are after charges, but would need to check.
Yes Vanguard have lower fee's than the funds I mentioned, but other trackers also do, L&G have the lowest, half the vanguard rate in many instances. I'd rather invest in a fund that has a 5 year average of 10%+ that takes 0.75% charge than one that has an average of 4% with a 0.25% charge.
The difficulty with having more funds is limited by the £250 monthly amount.
@Rob7Lee You don't need me to tell you that the Vanguard big pitch is the ultra low fees they charge that take a nibble out of your gains in all funds. So when you compare Vanguard Life strategy to the above funds you mentioned, are the performance figures in all cases after fees? ( I don't know, it seems a very murky area, which Vanguard are trying to disrupt)
I also think you have selected there some funds that ought to do a lot better than Vanguard LS, because they are much higher risk. I think someone like @kimbo would want some solid lower risk funds alongside those you have mentioned.
I don't know @kimbo risk appetite hence at the start suggesting an IFA. My own view on the risk of those funds maybe isn't as high as yours (or Kimbo's) paying in a regular mostly amount over a long period removes a lot of that risk IMHO as you are buying monthly through a cycle/the long term.
Returns I think are after charges, but would need to check.
Yes Vanguard have lower fee's than the funds I mentioned, but other trackers also do, L&G have the lowest, half the vanguard rate in many instances. I'd rather invest in a fund that has a 5 year average of 10%+ that takes 0.75% charge than one that has an average of 4% with a 0.25% charge.
The difficulty with having more funds is limited by the £250 monthly amount.
Thanks all. You are right I need a IFA despite being a FD I have very limited experience with investments.
This won't make @golfaddick happy but I am not sure whether with the amounts you want to invest, and the regular payments you intend, an IFA would give you value for money. I reckon you could read up, chooses cautious and low cost funds, and start to build up your investments yourself, and nothing bad will happen. I think once you have built up a sizeable pot of money, maybe 5k plus, it might be worth getting one who comes recommended to do a one off review of your investments. But that's all, I think. It is so much easier nowadays for people to invest directly in funds and stay on top of their progress. The most user friendly and comprehensive funds supermarkets are Fidelity, and Hargreaves Lansdowne, which I use.
Yes, too bloody right it wont make me happy. I have almost 30 years experience of advising clients on their investments & firmly believe my help & advice has benefited my clients greatly. To me it makes not one jot how much or how little someone has to invest. Everybody needs to start somewhere.....whether you can afford £25 pm or £250 pm. Good financial planning doesn't need to cost the earth & everybody should know about risk v return, cash deposits v investments. This can not simply be gained by reading What Investment or logging onto Comparethemarket.com. Everbody's needs are different & what may suit one person may not suit another. I am always happy to advise potential clients on the best places to invest / save & I never charge for an initial appointment. OP....feel free to PM me & I'll see what I can do.
Just in case there are any foreign-based members reading this, Golfie's advice does not apply if you are living in a place where IFAs are not regulated. I've lost over six figures (pounds, not baht!) due to bad advice, possibly bordering on crooked, and I now do my own investments using an offshore trading platform.
Just in case there are any foreign-based members reading this, Golfie's advice does not apply if you are living in a place where IFAs are not regulated. I've lost over six figures (pounds, not baht!) due to bad advice, possibly bordering on crooked, and I now do my own investments using an offshore trading platform.
We also fell into this trap/scam with bad advice, starting a Friends Provident investment plan, but were lucky enough to get out of it early enough without taking a big hit. Like you we now invest using an offshore platform (Internaxx).
@Rob7Lee You don't need me to tell you that the Vanguard big pitch is the ultra low fees they charge that take a nibble out of your gains in all funds. So when you compare Vanguard Life strategy to the above funds you mentioned, are the performance figures in all cases after fees? ( I don't know, it seems a very murky area, which Vanguard are trying to disrupt)
I also think you have selected there some funds that ought to do a lot better than Vanguard LS, because they are much higher risk. I think someone like @kimbo would want some solid lower risk funds alongside those you have mentioned.
I don't know @kimbo risk appetite hence at the start suggesting an IFA. My own view on the risk of those funds maybe isn't as high as yours (or Kimbo's) paying in a regular mostly amount over a long period removes a lot of that risk IMHO as you are buying monthly through a cycle/the long term.
Returns I think are after charges, but would need to check.
Yes Vanguard have lower fee's than the funds I mentioned, but other trackers also do, L&G have the lowest, half the vanguard rate in many instances. I'd rather invest in a fund that has a 5 year average of 10%+ that takes 0.75% charge than one that has an average of 4% with a 0.25% charge.
The difficulty with having more funds is limited by the £250 monthly amount.
@Rob7Lee You don't need me to tell you that the Vanguard big pitch is the ultra low fees they charge that take a nibble out of your gains in all funds. So when you compare Vanguard Life strategy to the above funds you mentioned, are the performance figures in all cases after fees? ( I don't know, it seems a very murky area, which Vanguard are trying to disrupt)
I also think you have selected there some funds that ought to do a lot better than Vanguard LS, because they are much higher risk. I think someone like @kimbo would want some solid lower risk funds alongside those you have mentioned.
I don't know @kimbo risk appetite hence at the start suggesting an IFA. My own view on the risk of those funds maybe isn't as high as yours (or Kimbo's) paying in a regular mostly amount over a long period removes a lot of that risk IMHO as you are buying monthly through a cycle/the long term.
Returns I think are after charges, but would need to check.
Yes Vanguard have lower fee's than the funds I mentioned, but other trackers also do, L&G have the lowest, half the vanguard rate in many instances. I'd rather invest in a fund that has a 5 year average of 10%+ that takes 0.75% charge than one that has an average of 4% with a 0.25% charge.
The difficulty with having more funds is limited by the £250 monthly amount.
Thanks all. You are right I need a IFA despite being a FD I have very limited experience with investments.
This won't make @golfaddick happy but I am not sure whether with the amounts you want to invest, and the regular payments you intend, an IFA would give you value for money. I reckon you could read up, chooses cautious and low cost funds, and start to build up your investments yourself, and nothing bad will happen. I think once you have built up a sizeable pot of money, maybe 5k plus, it might be worth getting one who comes recommended to do a one off review of your investments. But that's all, I think. It is so much easier nowadays for people to invest directly in funds and stay on top of their progress. The most user friendly and comprehensive funds supermarkets are Fidelity, and Hargreaves Lansdowne, which I use.
Yes, too bloody right it wont make me happy. I have almost 30 years experience of advising clients on their investments & firmly believe my help & advice has benefited my clients greatly. To me it makes not one jot how much or how little someone has to invest. Everybody needs to start somewhere.....whether you can afford £25 pm or £250 pm. Good financial planning doesn't need to cost the earth & everybody should know about risk v return, cash deposits v investments. This can not simply be gained by reading What Investment or logging onto Comparethemarket.com. Everbody's needs are different & what may suit one person may not suit another. I am always happy to advise potential clients on the best places to invest / save & I never charge for an initial appointment. OP....feel free to PM me & I'll see what I can do.
typical remainer.....
well, when choosing products and services everyone is guided by their previous experience. Here is mine when it comes to IFAs:
The first one, starting back in the early 90s was a mate, always seen as a bit of a rogue within my gang. He lost his job as Sales Director of British Car Auctions, drifted a bit and then, suddenly he was an IFA. When he wasn't punting on the horses, anyway. Unwisely I let him loose on my Mum, he invested her in an Exeter fund which went tits up and he completely failed to take responsibility. I had to go through official channels myself, and eventually got my Mum's money back. He's no longer an IFA (nor a mate).
Second one I took on based on friends' advice and he did a good job in restructuring what I had; like I said, a one -off job which was well worth the fee. However he then wanted to manage my funds going forward and I found he was never proactive; indeed in times of market turbulenec it was often a week before I heard back from him re "what should we do?". I also discovered that despite him claiming he was fee based, he was earning a regular take from AJ Bell where he placed my pension funds. Not a lot of money but it's the principal. You can't be half pregnant, nor half transparent. In the end I thought I'll manage this myself because then I only have myself to answer to.
Third was a cousin who said he would help with something re my Mum in the last year of her life. Totally failed to do anything he promised, (yes we were prepared to pay). Again we sorted it all ourselves.
That's my experience. Although I've also been an observer of the so-called IFAs in Prague, the same breed that @Bangkokaddick and @QatarNapsy refer to. Shameless cowboys, the lot of them. They all have one other thing in common. They are all British. Hey, perhaps Brexit has an upside after all, they might all have to eff off out of here.
@PragueAddick to be fair there are good and bad and the standards are being improved latterly by the FCA qualifications that show what skills and experience an adviser has. The only thing that is discussed on this thread is performance and a few throw away comments about risk. What an adviser can do is to provide you with value for money, and the means of seeking your target return with the lowest risk.
Different funds in the same asset class might achieve similar results but at different prices and different risks. Every fund is measured against a benchmark and that benchmark is key to your selection because it tells you where the manager is going be putting your money.
There are lots of ratios that you can learn about to help you compare similar funds to see which one is taking more risk than another for exactly the same returns. And the biggest wheeze is you paying for active management when 90% of your fund is in a tracker, only the Alpha Beta ratios can show you that. You can also see risk measured by the ration between its high and low prices e.g here's one at random from Trustnet. These are the key indicators an advisor would be looking at if he is adding value to your decision making. That's all it is about, the decision making process to meet your objectives not looking up the fund with the highest return last month/quarter/year.
RATIO INFORMATION 1 yr 3 yr Volatility 2.59 4.72 Alpha 2.09 -2.33 Beta 0.42 0.66 Sharpe 0.00 0.00 Info Ratio 0.17 -1.19 R2 0.50 0.69
Plus a ranking on each of the above against its peer group.
Test your IFA by asking about the Ratio Information on funds he recommends and why he is recommending them.
I note that HL and many other platforms don't give the same detail as you see with Trustnet. I guess HL just aim to make it easy for you to make a buying decision and maintain their 70% profit margin. It costs a few quid a year to run each investors tracker account regardless of whether it's got £500 or £250,000. HL's 0.45% ad valorum charge will only earn them £2.25 on the £500 account, but still a profit, but on the £250k account they earn over £1,000 a year. Its called nice work if you can get it.
Good stuff as always, @Dippenhall. I do use Trustnet, but wasn't aware of how to use it in the way you illustrate. But I did not get how to interpet the Alpha Beta ratios, to come to a conclusion, could you expand a little on that?
Every time I open up H-L and see the name "Hargreaves" I am reminded not just of their profit margins, but what Peter Hargreaves did with a lot of that profit...it hurts, that. But overall in terms of functionality it has stayed ahead of Fidelity IMO (I was using both) and is way ahead of some cheaper ones. I set up with AXA for my niece. It is dire. But it's cheap. The hope is that Vanguard will eventually force H-L to reduce fees, but I am not sure how that is shaping up.
I generally take your point about IFAs. Of course my ex mate the ex second hand car dealer/horse punter probably would not get licensed nowadays. It's also true that when I parted company with the second one, I had both the appetite and the time on my hands to pay a lot of attention, regularly, to my savings. Most people are not like that, and potentially IFAs provide a valuable service to such people.
Comments
Everything is asset/guarantee backed. Pretty good so far, and I am looking at about 7.8% before any bad debts are taken into account. There is also a healthy secondary market.
Unimpressed with Barclays Smart Investor since they "upgraded" from MarketMaster...and I work for them (the Bank, not the Stockbroker part)! Will look at a few other options.
I have done a bit of reading online and it says HMRC will adjust my taxcode (ie my personal allowance) next year to reflect this.
How will they know what I make in interest?
I don't currently fill out a self assessment tax return and I am a PAYE employee, although on a sidenote I might start doing accountancy/bookkeeping self employed or through a company, so this may change...
You can do the sums as to whether the net interest left after paying tax on the element over £1K exceeds what you could earn in an ISA tax free. If you have found an exceptional rate then it might.
EDIT: HMRC are told by banks / building societies what interest you have earned that is not covered by an ISA.
Therefore, all else being equal, use any surplus money to pay off loans, credit cards, mortgages etc before thinking about investing. The real return will usually be more.
Thanks regarding what HMRC are told, I am guessing this is the same for P2P lenders etc?
Really appreciated.
However the question asked was how will they (HMRC) know and in my experience banks and building societies often, even generally, DO tell HMRC.
I recently helped out a recently widowed woman, also suffering with leukaemia, who was being aggressively hounded by the big, brave boys of HMRC because she hadn't declared less than £200 in interest.
There was nothing sinister about the non-declaration at all. She got 'caught' by the change from the interest being paid net to being paid gross as the combination of her bereavement and illness meant she 'took her eye off the ball.' Oh that HMRC displayed such zeal and aggression with less vulnerable and more mendacious taxpayers as they did towards that poor lady!
HMRC openly told me when I was attempting to establish exactly what had happened that the financial institution had given them the information and that was quite usual.
That said, as you correctly point out, it is without doubt YOUR duty to tell HMRC of interest earned and not the responsibility of the financial institution.
However for many people that is not the case and that is the point. How many first time buyers will have a 20% deposit in order to take advantage of sub 2% mortgage rates?
I did use the phrase 'all else being equal' to acknowledge the type of scenario you mention.
If not it's worth taking some time and doing some homework on the multitude of funds, their fee's and performance as well as platform fee's. Vanguard (I assume you mean life strategy) isn't great performer to be honest. As a start Fidelity have a 'top 50' funds which is worth looking through, a number are their own but many aren't. You'll see the prior 12 months performance of their top 50 are mostly double digit returns, some over 40%.
A few worth considering and this is the 5 year average annual performance;
Rathbone Global Opportunities Fund 17.49%
Franklin UK Smaller Companies Fund 16.44%
Fidelity American Special Situations Fund 15.13%
LF Lindsell Train UK Equity Fund 14%
Stewart Investors Asia Pacific Leaders Fund 11.14%
You could do worse than putting £50 in each of those a month IMHO.
I also think you have selected there some funds that ought to do a lot better than Vanguard LS, because they are much higher risk. I think someone like @kimbo would want some solid lower risk funds alongside those you have mentioned.
I find Moneytothemasses.com is quite a good site for advice and comparisons.
Returns I think are after charges, but would need to check.
Yes Vanguard have lower fee's than the funds I mentioned, but other trackers also do, L&G have the lowest, half the vanguard rate in many instances. I'd rather invest in a fund that has a 5 year average of 10%+ that takes 0.75% charge than one that has an average of 4% with a 0.25% charge.
The difficulty with having more funds is limited by the £250 monthly amount.
Now investing in something less volatile and more liquid as I may need to release some significant monies in the next year or so (so much for downsizing?)
typical remainer.....
The first one, starting back in the early 90s was a mate, always seen as a bit of a rogue within my gang. He lost his job as Sales Director of British Car Auctions, drifted a bit and then, suddenly he was an IFA. When he wasn't punting on the horses, anyway. Unwisely I let him loose on my Mum, he invested her in an Exeter fund which went tits up and he completely failed to take responsibility. I had to go through official channels myself, and eventually got my Mum's money back. He's no longer an IFA (nor a mate).
Second one I took on based on friends' advice and he did a good job in restructuring what I had; like I said, a one -off job which was well worth the fee. However he then wanted to manage my funds going forward and I found he was never proactive; indeed in times of market turbulenec it was often a week before I heard back from him re "what should we do?". I also discovered that despite him claiming he was fee based, he was earning a regular take from AJ Bell where he placed my pension funds. Not a lot of money but it's the principal. You can't be half pregnant, nor half transparent. In the end I thought I'll manage this myself because then I only have myself to answer to.
Third was a cousin who said he would help with something re my Mum in the last year of her life. Totally failed to do anything he promised, (yes we were prepared to pay). Again we sorted it all ourselves.
That's my experience. Although I've also been an observer of the so-called IFAs in Prague, the same breed that @Bangkokaddick and @QatarNapsy refer to. Shameless cowboys, the lot of them. They all have one other thing in common. They are all British. Hey, perhaps Brexit has an upside after all, they might all have to eff off out of here.
with the lowest risk.
Different funds in the same asset class might achieve similar results but at different prices and different risks. Every fund is measured against a benchmark and that benchmark is key to your selection because it tells you where the manager is going be putting your money.
There are lots of ratios that you can learn about to help you compare similar funds to see which one is taking more risk than another for exactly the same returns. And the biggest wheeze is you paying for active management when 90% of your fund is in a tracker, only the Alpha Beta ratios can show you that. You can also see risk measured by the ration between its high and low prices e.g here's one at random from Trustnet. These are the key indicators an advisor would be looking at if he is adding value to your decision making. That's all it is about, the decision making process to meet your objectives not looking up the fund with the highest return last month/quarter/year.
RATIO INFORMATION
1 yr 3 yr
Volatility 2.59 4.72
Alpha 2.09 -2.33
Beta 0.42 0.66
Sharpe 0.00 0.00
Info Ratio 0.17 -1.19
R2 0.50 0.69
Plus a ranking on each of the above against its peer group.
Test your IFA by asking about the Ratio Information on funds he recommends and why he is recommending them.
I note that HL and many other platforms don't give the same detail as you see with Trustnet. I guess HL just aim to make it easy for you to make a buying decision and maintain their 70% profit margin. It costs a few quid a year to run each investors tracker account regardless of whether it's got £500 or £250,000. HL's 0.45% ad valorum charge will only earn them £2.25 on the £500 account, but still a profit, but on the £250k account they earn over £1,000 a year. Its called nice work if you can get it.
Every time I open up H-L and see the name "Hargreaves" I am reminded not just of their profit margins, but what Peter Hargreaves did with a lot of that profit...it hurts, that. But overall in terms of functionality it has stayed ahead of Fidelity IMO (I was using both) and is way ahead of some cheaper ones. I set up with AXA for my niece. It is dire. But it's cheap. The hope is that Vanguard will eventually force H-L to reduce fees, but I am not sure how that is shaping up.
I generally take your point about IFAs. Of course my ex mate the ex second hand car dealer/horse punter probably would not get licensed nowadays. It's also true that when I parted company with the second one, I had both the appetite and the time on my hands to pay a lot of attention, regularly, to my savings. Most people are not like that, and potentially IFAs provide a valuable service to such people.