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Retirement Fund- Drawdown Advise
Keith Hilton
Posted: 24 April 2018 16:37:57(UTC)
#19

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Tim D;61176 wrote:
...are there really no one-stop-shop IT's which are the equivalent of the sort of multiasset balanced funds mentioned previously? Why hold 5-10 ITs specialising in particular niches when you could buy one diversified trust and let the manager worry about rebalancing and tactical asset allocation etc?


The problem of a one-stop fund is in its asset allocation. At some point, you have to make a decision over the relative regional weightings you want, since different funds would have different weightings and you would need to choose between them. If you could find one that suits then great, but it's probably easier to choose several funds to achieve the required weightings. For instance ...

25% CTY + 75% HINT would give approximate regional weightings of 22% UK, 29% EU, 25% NA, 19% Asia.
Tim D
Posted: 24 April 2018 20:23:54(UTC)
#20

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Keith Hilton;61190 wrote:
The problem of a one-stop fund is in its asset allocation. At some point, you have to make a decision over the relative regional weightings you want, since different funds would have different weightings and you would need to choose between them. If you could find one that suits then great, but it's probably easier to choose several funds to achieve the required weightings.


Not sure about regional weightings, but if you believe that the single biggest asset allocation decision is the equities-vs-bonds ratio, then the funds world has things like Lifestrategy 20/40/60/80/100 and L&G multi-index 3/4/5/6 and the spread of Blackrock Consensus funds and probably some other things too. These simply give you one "risk" (or at least "volatility") dial to twiddle, and you have to trust them with the rest (including regional allocation)... which is much the same as you (presumably) get with a robo-adviser or if you use an adviser and he does an "attitude to risk" assessment on you and he does the rest (which is what seems to have happened with the OP's 2 advisers). If you start telling people they also need make decisions about regional allocations too, and use a bigger range of investment vehicles to fiddle around with that... well the more knobs and dials and complication you tell people they have to worry about, the more they're likely to think this is all beyond them and they should just pay that nice expert adviser to do it all for them.

To get the same sort of simple dial-your-risk-level-and-forget-about-it with ITs you have to know a bit more about what's what on the spectrum from the permabear end of things to whatever's at the high-growth high-risk end. Is there really not some simple one-stop-shop ITs designed to appeal to people in the OP's shoes? (If not, it'd explain why JPM created MATE perhaps).
Julianw
Posted: 24 April 2018 21:11:03(UTC)
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Vanguard life strategy fund is all one need.

It is that simple.

Unfortunately simplicity does not sell. People like a good story. It can not possibly be that easy.


The greatest value add of an good adviser is to get you to stick to your plan during major market down turn. They can not beat the market after deducting their fees.

Once you understand why its so hard to beat a low cost index fund, you probably do not need an adviser.
1 user thanked Julianw for this post.
Tim D on 24/04/2018(UTC)
Keith Hilton
Posted: 24 April 2018 21:30:13(UTC)
#21

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Tim D;61196 wrote:
If you start telling people they also need make decisions about regional allocations too, and use a bigger range of investment vehicles to fiddle around with that... well the more knobs and dials and complication you tell people they have to worry about, the more they're likely to think this is all beyond them and they should just pay that nice expert adviser to do it all for them.

To get the same sort of simple dial-your-risk-level-and-forget-about-it with ITs you have to know a bit more about what's what on the spectrum from the permabear end of things to whatever's at the high-growth high-risk end. Is there really not some simple one-stop-shop ITs designed to appeal to people in the OP's shoes? (If not, it'd explain why JPM created MATE perhaps).


There are a number of good multi-asset IT's, such as, PNL, RCP, RICA, SIGT etc, but how do you choose which one? You could just use past performance figures, but that might not suit the future e.g. a fund with a lot of fixed interest might struggle when interest rates rise.

Likewise, Vanguard Lifestrategy could be a good one-stop shop too.

However, when investing a large sum of money, an investor should make the effort to understand what they're buying, whether or not that's recommended by an advisor. You wouldn't buy a house without getting a survey done and understanding what the risks might be. It shouldn't be any different with investing.
Tim D
Posted: 25 April 2018 13:31:28(UTC)
#22

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Keith Hilton;61203 wrote:
when investing a large sum of money, an investor should make the effort to understand what they're buying, whether or not that's recommended by an advisor.


Oh yes, agree absolutely! But it's that very principle which would make me reluctant to even mention ITs to a relatively novice investor looking to keep things simple. Noone should invest in ITs without understanding the extra complications of discounts and gearing which come with them, and for someone in the OP's shoes who's a bit intimidated by it all I can't really understand why anyone would think they're a good place for them to start.
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