Wealth Management

[HIDDEN]

Has anyone from the UK used a Wealth Management firm ? Any recommendations?

[HIDDEN]

I'm pretty much D.I.Y.
You pay a bomb to advisors and the quality is uncertain.
If you have the time you're going to be much better off in the long run by figuring out the angles yourself.

Having said that, the one nice thing in the UK is to set up a SIPP. I set one up last tax year and it's really going to help. Basically you get back your tax (either 20% or 40% depending on your tax bracket) by putting the money into a SIPP every month. And you get to see it again when you're 55. At 55 you can take 25% out as a lump sum tax free and the rest in the form of an annuity.
If it's in a SIPP you can direct into which funds the money goes. I put mine into Asian funds for instance as a bit of a hedge for my future retirement down there.

To set up a SIPP you will need an IFA(independent financial advisor). And, yes, they're sharks so take your time and do your research so they don't fee you to death.

[HIDDEN]

hi,

I read a lot of books. Diversify that's the mantra. So I decided to get the wealth management section of a large bank to help advise. They recommended a fund that they ran which was a series of portfolios of shares from various regions worldwide, plus shares from a wide variety of sectors. And the money could be split between stocks and bonds. I chose the "conservative" approach of 50% stocks and 50% bonds. 

The fee was 2% plus the normal charges for purchasing stocks, and buying bond, plus holding them. In all, about 3%+++. And there was always the list of charges being continually revised.

q). Just how many licks of your ice-cream can someone take.
A). As many as it takes to eat it?

Anyway, it was the type of investment that I'm sure any financial advisor would advise. Well diversified. Good stock/bond split. And to be kept for the medium term = 5 years odd.

I held this for 8 years. When I finally cashed it in, it was EUR 374 less than it started. The bank was delighted that I hadn't lost more. They thought that they'd done really well to "almost preserve the capital." (It was cashed-in well  before the 2008 crisis.)

All their time & effort of managing, the financial experts, the glossy monthly reports, the sales of bonds to buy other bonds, same with shares, the reasons for up EUR 5,000 one month and down EUR 5,000 next month, endless charts, graphs, commission statements, and once per year a tax summary.

They'd taken their 3%++ every year so why wouldn't they be delighted.

I could have put the money to buy a house in the UK, a small place in Singapore or a bungalow in Malaysia, rented it out, sold it, and made a fair profit.

Wealth Management?        If folks are so good at taking your cash and making it grow why do you have to pay them. Why don't they take their cut from the growth. And surely they'd already have taken their own cash, grown it, and wouldn't have to bother with the likes of me.

You're paying an untried entity to take your cash and put it somewhere you've probably never heard of, into something you're probably not clear about, and over which you have totally no control, and if it all goes belly-up then that's the risk you've taken. Wow, crap deal.

Well, that's my story and my take on it. I'm sure that other members have differing views.

[HIDDEN]

No, I absolutely agree, Scott. While fund managers are guaranteed a "fee" of 2+%, they have no real incentive to do good by their investors. And we all know by now that the rating agencies are just another bunch of standover thugs. Search for cases where entities have tried to step away from ratings agencies to see the kind of backstabbing they were subject to.

After doing some reading, I invested our money directly in stocks. Okay, it was pre-economic crisis, but I still almost doubled our money in 3 years. And I'm not that smart. We had to cash in before we moved to s-e Asia but, interestingly enough, when I calculated the return on our portfolio AFTER the economic crisis, it was still 10+%. I'll never go back to fund managers. The time I waste coming up to speed with any one particular stock market is balanced by what I gain long-term through investment.

Kaz

[HIDDEN]

Property and Cash - nice and simple.  It's yours and nobody else can fiddle about with it.

[HIDDEN]

hi,

That's my experience, property & cash. If I'd have stuck to this and left the stocks & bonds to others I'd be stepping in
clover instead of doodoo.   

Or, as KJSzymczyk has posted, DIY and keep track of it monthly if not weekly.

I tried Motley Fool, more fool me. More on this later.

Coincidentally, and partly on topic, I've just been goofing off from working on the boat and have been listening to the BBC. Two items :

a). A report on Bernie Madoff and an interview with whistleblower Harry Markopolis. He says that he wrote to the SEC in the States on 5 occasions over a period of 8 years. All warnings on Madoff. All ignored. In May 2000 he submitted a case to the SEC. Zip. He's written a book. "No-one would Listen." Sums it up.

Harry reckons that the SEC, and the FSA in the UK, have "perverted their missions" and "are protecting the financial industry from de-frauded investors."

b). Today's publication of a 2,300 page report on Iceland's melt-down. Seems that the politicos, and the bankers, allowed the Icelandic banks to grow to 9 times the size of everything that Iceland produced and sold each year. A comment by an Icelandic MP was, "that the financial system was corrupt to the core."

[HIDDEN]

If you're interested in the Madoff scandal and have time on your hands, I highly recommend Pam Martens' articles on Madoff and the SEC. Here are three of her posts. The first one mentions Markopolos:

http://www.counterpunch.org/martens12222008.html

On collusion between investment banks:

http://www.counterpunch.org/martens08312009.html

Details on Madoff's lawyer, Sorkin:

http://www.counterpunch.org/martens03092009.html

This stuff has been going on for decades.

Re Iceland. The massive leveraging of Iceland's assets should never have been allowed. Iceland's major creditor nations are the UK and the Netherlands. While it's true both countries engaged in predatory practices, Iceland agreed to pay back the debt at an interest rate pegged to a cost-of-living index, from memory. This meant that, as their economy tanked, their interest bill exploded.

Yes, I really do love politico-economics!

Kaz!

[HIDDEN]

Good article on the mess in Greece,


Several readers have been wondering why an EU member such as Greece has found itself with an enormous problem in the shape of a sovereign debt crisis. A starting point is that pensions in Greece are generous even compared with European standards. For example, there are nearly 600 categories of jobs, covering 14 percent of the greek workforce, which are categorised as hazardous occupations.

Workers in this sector are able to retire early on a full government pension men can retire at the age of 55 and women at 50. Some examples of hazardous occupations are hairdressers, musicians and even newsreaders. While the welfare mentality has played a major role in the Greek sovereign debt crisis, other factors have also contributed.

Systemic tax evasion and the fact the Greece hid the full extent of its finances when it joined the EU, added to the crisis. So did, private savings, which are far too low, and government involvement in the economy which is far too high. While pensions will now be frozen, the rules on eligibility for accessing the pension will remain much more generous than Greece's European counterparts.

These austerity measures, particularly the plan to curtail pensions, will not go down well with workers, who have been brought up to believe that their generous pensions are an entitlement. Growing unrest is building with general strikes and some violent demonstrations. A survey showed that 62 percent of Greeks were willing to participate in mass protests.

While many Greeks understand that severe measures are necessary, it appears some things are not negotiable. And Greece isn't the only country in the EU suffering economically and needs assistance. Portugal, Ireland and Spain (collectively known with Greece as PIGS) all have sovereign debt problems.

The economic problems spreading across Europe signal a change which could see developing economies in Asian and South America eclipsing the economic power of the developed economies of North America and Europe. For Australia, this change provides both opportunity and a warning. While our natural resources and close proximity to the growing economies of Asia are in our favour, we need to avoid the high levels of government spending and unaffordable welfare we now see in countires like Greece.


Bob

[HIDDEN]

In payback...maybe the Icelander Fishery will allow the Brits access to the Cod that was in dispute during the many Cod Wars between those Nations years ago....OH! NO!

There is no Cod left...

David

[HIDDEN]

----"If you're interested in the Madoff scandal and have time on your hands, I highly recommend Pam Martens' articles on Madoff and the SEC. Here are three of her posts."- -- -

Even better  read new book by Harry Markpolos - "No One Would Listen". He is the guy who detected the fraud 8 years earlier & made 5 detailed submissions to SEC (to no avail). I have just finished it.

- -- - -"In all, about 3%+++. And there was always the list of charges being continually revised".- ---

3% for a balanced/conservative fund plus it appears they were constantly churning stock to increase brokerage fees !!!!! Frankly, I have never met a financial planner I have trusted (or particularly liked). The best investment is self education.

Cheers,

James

[HIDDEN]

True, but Martens' articles are free, James! (Well, free once you've paid your broadband bill.) But thanks for the ref. Shall put his book on my list to buy.

And cool smiley, David. Having the kind of mind I have, I could watch it for hours. LOL

Kaz!

[HIDDEN]

hi,

Re Iceland. The massive leveraging of Iceland's assets should never have been allowed. Iceland's major creditor nations are the UK and the Netherlands. While it's true both countries engaged in predatory practices, Iceland agreed to pay back the debt at an interest rate pegged to a cost-of-living index, from memory. This meant that, as their economy tanked, their interest bill exploded.

Yes, I really do love politico-economics!

Kaz!

Many thanks for the Madoff links.

On the Iceland saga, and politico-economics, I remember a 2008 statement by the Liberal Democrats Treasury Spokesman, Vince Cable. It was after the Icelandic banks went bust. He said that he'd known about the dodgy situation of the banks for quite some time and decided to keep quite so as not to cause a panic.

Politicians don't like panics. If 1,000's of folks lose their savings, preferably quietly by themselves, that's Ok as long as there isn't a panic.

[HIDDEN]

   Yes Scott who can you trust its all %'s here and there,Foolish I see now, wise I thought 10 years ago invested with UK Aberdeen Asset Management in what was a well diversified  fund that went into free fall, was then sold moved sideways into a further fund New Star that became something else. Made a complaint to the FSA about the advertising hype initially used when I made the investment without success. May have been 20% of initial investment that I got back. They AAM seem to have dis sapeared from UK scene but I'm surprised to see they advertise their services?? a lot in S'pore  perhaps standards are lower there. Premium Bonds would have been a better bet. Now how many politicial advisers get their fat brown envelopes under the table to keep their political mouths shut?

[HIDDEN]

Commiserations Paddy, I got stung with AAM / New Star in the UK too.  Thankfully not a huge amount of money but it's all rather galling isn't it, when you would have been better off just sticking it under the mattress.  I've learnt from the experience, and won't be doing that again.  That's all you can do really, isn't it.

I guess none of this is helping out Sukhi with his original question though.

[HIDDEN]

  Hi Papaya understood yes to AAM/NS shower of legalised thieves robbers, we may be helping Suhki hopefully putting on her/his guard.