Thoughts on my investment Strategy

So I touched base with the adviser again today. We scheduled our face to face for 2 weeks time.

Going over the thoughts expressed in this thread over the last few weeks this is my current thinking.

The managed funds I hold I will continue to hold for now and monitor performance closely over the next few months. The ones that continue to underperform the respective index over the next few months I will look at dumping and moving to index equivalent.

I will start doing monthly buy in’s into index funds. The thoughts we’re around aus index , international index , US index and US small cap index. I’m thinking for now I might just do monthly in aus and international. I’m still not sure about the US on its own being that I feel the US market has already had a strong run and could turn soon. Either way I’m still getting a good chunk of US in the international index.

With the focus on just 2 index funds for now I’m sticking with keeping it simple. Will continue to build up the 2 index holdings till the value I hold in index funds at least matches the active fund managers. By then I should have had time to assess which active funds I’m happy with and will continue to hold long term.

I just wanted to put that down in writing for final thoughts before putting it into motion with the adviser. I want this to be my plan over the next 12-24 months.

Needed the PC non advisers approval before giving the adviser the go ahead. I told the adviser if the PC committee does not approve we can not move ahead.

 

Since you are doing a lot of research regarding where you want to invest your money going forward. Below website might be worthwhile to see how different markets have performed in the past.

Backtest Portfolio Asset Class Allocation

Cheers,
Oracle.

 

Thank you Sir.

 

Just wondering Big Al, are you going to do these ETF investments through your adviser?
I was in a similar position to you a number of years ago paying for a wrap platform plus advisor fees and it troubled me that every month I would get a statement and these fees would be deducted. These fees added up to around $10k a year.
I then decided to do it myself and have not looked back.
Pretty easy to do your self through Commsec or similar.

 

Burgs- you set up a wrap account by yourself or did away with it completely?

 

Yes at the moment I am doing this through an adviser and on the BT platform. Will keep the platform as with the amount of different funds we hold it would be a pain come tax time without the platform. We are moving to the BT panorama platform. Between our personal holding plus the super wrap for wife and I annual fees will be fixed at around $3150 for the 3 wraps. Last year on the current BT wrap total fees were just over $6k.

As part of my shift towards focusing on index investing moving forward the plan is to cut back the use of the adviser. At this point I am happy to keep him on the basis we review our holdings one or two times a year. Though I will be discussing a fee per review rather than a fixed annual fee. At the moment I am paying him a monthly fee totalling $8000 a year. I don’t think I need $8k a year worth of advise considering we set a plan and implement for the whole year in a single meeting.

 

Have been interested in reading this.

As always, it's your call as it's your money. A couple of thought have crossed my mind. Are you the only one making investment decisions with the FP? Is there another person who is involved and what interest/ability/input do they have in the process? What happens to them if you are no longer in a position to make the decisions?

 

Thank you @SatayKing . There is the wife but she has minimal interest. I do talk to her about it occasionally and try to get her interested but not her thing.

I guess that’s another reason for still having some connection with an adviser. If I’m not around then the adviser would play a bigger role.

In saying that I’m not that excited by what I have seen so far with this adviser. I feel like I am steering the ship more than he is of late. I seem to be going to him with ideas lately than he coming to me.

 

Yeah, I did wonder as it's not an uncommon situation. Tends to make sense to retain a relationship with an FP in those circumstances.

Wasn't the case with my wife but even so, just in case it got too much, each of us had in out Wills an non-binding clause for strong wish the Executor obtaining and consider advice from a professional in financial and investment decisions. Same with my revised Will. My Enduring Power of Attorney also covers such financial matters.

 

Sometimes AL and it can be the most depressing aspect of investing is the most un-successful people particularly in financial matters give the most advice sometimes for a very high cost maybe they make more income from advice then investing ,once you scope down ..

If you are starting to question the costs then it may be time to open a different door..

CommSec - Online Share Trading. Get going with more value.

btw I have a long term holding with cba and have been with commsec for years ..imho..

 

Did away with it completely.
No regrets, obviously there are capital gains considerations when selling the portfolio off. We have a discretionary family trust so that probably helped to distribute the tax side of things.
So all our investments are now through the trust via Commsec.
The other point I meant to mention is the fees that you also pay for the funds through the wrap, so really there are at least three different fees that you are paying, rather than the one low fee ETF/LIC approach.

 

Good, fee for service on an hourly rate. It’s a rip off other wise.

 

I have been using Commsec for a few years as well and am pretty happy with it. So does it work like a wrap product? I was going to research these but if it's the same then I won't bother.

I plan to use Commsec for all my LT investments and any trading I do I have opened an IG Markets account for the cheaper brokerage.

Even though it is more expensive I like the fact that Commsec works in the safer CHESS setup rather than the custodian setup of IG. (Although when I setup my International account yesterday Commsec use custodians as well for this part. I am going to find out if the portfolio will still all show up in the one account.

A bit of extra brokerage is not an issue for me as the % of the investment is tiny.

 

Mate, from your posts you are doing just fine and seems to me your a making the right decisions that you are comfortable with. There is nothing I can add as I am learning alot from you. You have a very measured, calm and researched approach. You are well ahead of the pack. Just keep going in the same vein and you will shoot the lights out.

 

Wow. Great tool. Will be using this. I was just thinking yesterday how I would like to back test my developing portfolio. Thanks!

I have decided to focus on income producing assets first. So Reits, A-Reits, Dividend ETF's and shares. I will research LICS but not interested in putting money in until after the election. Do not want to get stuck with any possible restructuring costs.

 

Same here. We do have a SMSF advisor which would be the biggest pain, so that’s covered. Fee for service so not overly expensive, mostly admin. But as for the rest I’ve put together a brief overview of our financial plan (around a single page) including a separate page with a flowchart showing the link between our accounts / assets. Very easy to follow.

As for a FP if I’m not around I don’t feel we need to be paying one already but in the one page plan and estate documentation I’ve provided the name (s) of a FP I’d be happy with.

So given my wife, despite her disinterest, does understand what the investing goal is and has faith in my management of same then armed with the concise document I’ve created she can give that to the planner and request business as usual. Of course she can change whatever accordingly but like me would be critical of any advice contrary to the existing plan that has served us well. And fee for service thanks.

Importantly though I’m a great believer in simplicity nowadays. The simplier things are the less stress for everyone especially one’s heirs.

 

Thank you for all the feedback gentleman.

I do have a commsec account which is what I used when I bought the 3 individual shares I hold.
I will continue to use the wrap as the new one we are moving to will be a fixed fee. For the amount of capital invested through the wrap and what I hope to grow it too it should reflect a very low fee percentage. Less than .1%.

Because we have 15 different managed funds in the wrap it would be a nightmare to manage without it. And now that wrap fee is fixed I can also move the 3 individual share holdings onto the wrap so its all in the one place.

I will be shooting an email to the adviser prior to our face to face about his fee structure and what I am looking for moving forward. Not sure its what he had in mind as he has been hinting at a fee increase recently.

 

Is it possible to transfer shares / listed funds out of BT (non Super) wrap platforms to personal broking account without incurring CGT?

 

I have think as long as it is the same entity it is OK. No CGT event. But dont quote me.

 

Just hope Blue Collar Bill and his back room union mates don't read this ..