I am 47 years old and up to this point I have ens
12 July 2018
Question by Matt
I am 47 years old and up to this point I have ensured I have sufficient cash saved and regularly overpay my mortgage. I also have a company pension into which I pay additional voluntary contributions. I would now like to open an investment ISA for growth, with an initial figure of about £5000 and then about £250 per month (more when possible) for at least 10 years. I am tempted by the Vanguard LifeStrategy 80 due to the low fees and strong reputation. I would also consider investing in a couple of other Vanguard funds as well. Would this be advisable or relatively unnecessary, if I'm already investing in the LifeStrategy fund? I have also been looking with interest at a number of other companies including, Nutmeg, Wealthify, IG and AJ Bell Youinvest. Is there any provider that would stand above the others as most suitable in my circumstances? Whilst I would like my investment to start working without too much input from me, I would be happy to get more involved as my knowledge and understanding increase. Any insight or opinions you may have would be appreciated. Thanks.
Answered by Holly Mackay
The whole idea of the Vanguard LifeStrategy range is to offer you a balanced mix of investments to fit a risk profile. So I think to tinker with this by adding other funds to the mix would be counter-productive.
If you really want a 'set and forget' option and like Vanguard, then it’s a low cost option and very credible.
I think the main question is how much you think you will want to add to this mix as you get more confident?
If you like the idea of gradually being able to add other funds and maybe shares to the mix, then you could look at AJ Bell Youinvest as you suggest – you can start here by buying the Vanguard fund and then add to it as you grow.
Nutmeg and Wealthify offer low-cost 'passive' portfolios as an alternative option to Vanguard – but they wont let you buy other brands here.
So I think the answer to your questions comes down to this. Are you happy to pay what would be about 0.15% more in admin fees a year, to buy the Vanguard fund you like on the AJ Bell platform – because this extra admin fee gives you the ability to buy products from other fund managers as you get more confident?
If not, stick with buying the Vanguard fund on the Vanguard platform – this will be cheaper, but the trade-off is that you’ll only be able to buy Vanguard stuff. In this scenario, think of AJ Bell as the department store with loads of brands available and Vanguard as the single brand shop.
Hope that makes sense!