as of 26/02/2019 at 11:15 am
Standard Life is a big brand player with a relatively simple service to get less confident savers up and running. Standard Life offers an Easy Option with ready-made portfolios, plus a self-select service if you want a bit more choice – it’s funds only, there are no individual company shares. The Easy Option has five ‘MyFolio’ funds with different combinations of investments and levels of risk.
The ‘MyFolio’ investments they use are 'actively managed', which makes them a bit more expensive than some others. But these are well-respected products in the industry which will aim to perform better than lower-cost passive alternatives. Costs are about 1.3%-1.5% all-in. So not cheap. But solid and respected.
Large firm: manages £bns on behalf of investors and financial advisers
|Minimum amounts:||£50 minimum monthly amount
£500 minimum initial amount
|12 month indicative performance:||
A medium risk fund returned 8.2% in 2017, after charges.
"My husband and I are in our mid-30s and are completely new to investing. We have over £100,000 split between our two cash ISAs. As we are intending on purchasing a house in the next 5 years, the majority of our savings will be used for a deposit. However, we would like to make a long term investment (minimum 10 years), so are intending on putting £10,000 each in a Stocks and Shares ISA, as well as an ongoing £500 each a month. We're happy with some risk i.e. 6-7/10. Whilst we know this might be a tad trickier, we're really keen on investing in ESG funds/companies only. As we'll have a Stocks and Shares ISA each, we're not sure how best to 'diversify' and whether that's even possible given we want to make ethical investments? Would it be better if one of us uses a robo-adviser and the other a traditional platform? For one to go for an active and the other a passive approach (although I'm not sure if there is an ethical index)? Should one go higher risk than the other? Any guidance would be appreciated, Emma"
13/06/2019Read our reply
"Hello Holly, I retired in December 2018. Just before that time, I attended the free Pension Wise meeting and also a Standard Life 'introduction to retirement' seminar. Both were very worthwhile and informative. My initial thoughts were to consolidate my pensions into the Standard Life Active Retirement pension for income drawdown which looked simple and straightforward, but it meant handing over management of the investments. However, after viewing the performance of the funds they invest in, I hesitated. I have since spoken to a number of financial advisers, but have received mixed feedback about what I should do at retirement. More recently I spoke to an advisers aligned to the investment philosophy of Albion Strategic Consulting headed by Tim Hale. I found them transparent, but as the investment philosophy is towards indexing funds, I have been scared off once again by the messages regarding DIY investor dealing with re-balancing, sequencing, and lack of ability to stress test without the correct professional financial software, in addition to the high costs. With fees of around 1.6% per annum plus the initial one off fee. Over a 25-30 year lifespan, the costs would be more than 50% of our initial investment value. Is this logical for what is an indexing strategy? In addition, looking at another of the fifty or so boutique advisers who also promote the Albion strategy towards total Wealth Management, and low cost indexing funds. The particular company concerned state on their website/in their brochure that 90% of independent or tied advisers are still working with a broken system. I really don't know what they mean by such a statement. This makes me more concerned about handing over the control, although I know retirement can be a complex time regarding finances. Each of these IFA's are Chartered Financial Advisers whom have studied to high standards, and whilst I respect their knowledge and capability, I cannot see how these kinds of costs can be recouped with a passive strategy over time. The industry is sending out very unbalanced messages to basic investors such as myself. I understand the basics, but am now totally unsettled as to the direction I should take and if, at such a critical stage, I should invest in an IFA on a regular basis. I have started to read Tim Hales book "Smarter Investing". I also understand Vanguard are introducing a drawdown pension in the coming months. For your information, I have approx. £600k in total pensions with Aviva and Standard Life, plus £300,000 in ISAs with Hargreaves Lansdown, in one of their multi manager portfolios which again have the higher charges attached due to their structure (I do think HL are a great company though). We also own our own property at approx. £600k. Our basic overhead costs in retirement are covered by current final salary pensions, and state pensions. I appreciate you cannot give me direct financial advise but I am finding the whole event very disconcerting, when I thought I had the basic acumen to manage the transition. Would appreciate your feedback. A great website by the way, Holly."
20/03/2019Read our reply