Can anyone suggest .........

4th Apr '21 by Housemartin2

9 comments 750 reads

I have been seriously investing for over 10 years. Significantly helped by a bull market tailwind, this has been a reasonably successful time. Though I have some large caps, investment trusts and VCT's, my portfolio largely consists of small and mid-caps.

I have however recently had a diagnosis that indicates that I have much less time left to continue investing than I expected. I am seeking a backup plan to ensure that my investments are managed in my 'absence' for the benefit of my spouse. My spouse has no interest in investing whatsoever, though not profligate. What I think I need is some form of discretionary management; giving some general steer to a third party.

My problem is that the search so far has shown firms that offer services based around open-ended funds. I really dislike the structure of open ended funds which I regard as quite risky. What I need is are solutions that look to direct equities and closed ended funds.

Does anyone have any suggestions or even direct experience that they would like to share ?

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doug2500

4th Apr '21

I'm sorry to hear your news, really time and health are the most important things we have.

I can't help too much except to say I've set my parents ISA's up so they hold a handful of large investment trusts which should be fine left to do their thing with no input. Even sticking it all in an all world tracker or vanguard lifestyle product would probably not go wrong.

Obviously this is different because we're assuming I'll be around to keep an eye on them but it may serve as a back up plan.

This would probably only be suitable if you can get everything in a tax free account to avoid any reporting etc.

Alphaflight

Sorry to hear tyour news .

I would recommend looking at Rathbones stock brokers if you have a sizeable (>£1m) portfolio. They would do a good job of managing your investments and rebalancing the portfolio over time. Moreover your other half wouldn't have any trouble dealing with them in your absence I believe.

PLS1nve5t

This is the saddest post I've ever read here, when the time comes I hope I can be just as practical - your an inspiration, lots of respect - Pete

timarr

5th Apr '21

I hope that the news turns out to be less prophetic than feared.

In terms of investment management for your spouse then I'd offer up the advice of Warren Buffett:

"My advice to the trustee could not be more simple. Put 10 percent of the cash in short-term government bonds and 90 percent in a very low-cost S&P 500 index fund. I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions, individuals – who employee high fee managers"

Suitably adjusted for the UK these are the terms in my will. The UK is too small an investing pond to put all of your eggs in so I specify a global equity index tracker.

It's simple to implement, incredibly low cost and doesn't expose the funds to the multiple risks associated with active management.

James Kerr1

This is immensely sad and I admire you for being so pragmatic in difficult circumstances. I'm sure many of us have thought a bit about the 'what if' scenario.

The overseas section of my portfolio is in funds - a mixture of low cost trackers and active funds to cover more specialist niches that might grow well. The UK section is is individual stocks, many small and mid caps that need to be actively monitored and not very suitable for a long term holding with no active oversight. My 'what to do if the worst happens' note has an instruction to sell these over a12-18 month timeframe and reinvest much of it is a FTSE 250 tracker with a bit in active funds/trusts to cover off small caps and a couple of other specific areas. My thinking is that in the medium term at least the 250 will give reasonable returns in terms of dividends but will offer much better growth potential than the 100 share index, but costs will be kept low, and there's no need for any intervention.

sharw

One of the people I like listening to for ideas is Stephen English, who frequently pops up in a Tamzin interview on PI World. His company does the sort of thing you are looking for, so that does exist. I haven't a clue what track record or charges are but you may find an idea here: https://blankstonesington.co.u...

Having written that I looked at a more recent video and found that he had moved to a similar company that is: https://www.stellar-am.com/

You can find him talking of the move at the beginning of: https://www.piworld.co.uk/2020...

gus 1065

Hi Housemartin2.

Very sorry to hear about your health issues. I suspect there are a lot of hobby investors like us whose partners have little interest in managing a share portfolio so it’s an important topic to raise. My limited experience with using a discretionary asset manager in the (distant) past was not good. High fees and he went on a frolic investing in some unsuitable schemes (that paid him high commissions) that left a bad taste. I’m sure there are good managers and reputable firms but finding the needles in the haystack can be a bit of a lottery.

My approach has been to migrate the majority of my financial assets into an account with a reputable/low cost platform and use wide diversification to mitigate investment risk. The intention has been to create a “fire and forget” spread of assets that my wife and family can draw a steady income from through asset sales as and when required that should be robust enough to cope with the vagaries of the markets with very little input from them. My assets are with Vanguard spread between a wide combination of their own in house funds and ETF’s - some index based, a small number actively managed. As and when I’m no longer around to manage my “hobby” portfolio of stocks and shares, I’ve left instructions for my wife to dispose of these and transfer the proceeds onto the Vanguard platform. Here is a list of the available investments:-

https://www.vanguardinvestor.c...

Most of my holdings are still in equities but over time I will migrate proportionately more into fixed income (some index linked). (They do have various Lifestyle Fund options that automatically manage this migration according to a given target date). Widely dispersed both in terms of geography and sector market cap - there is some small cap and emerging market exposure as well as the core US/Japan/Asia/ U.K./European holdings. Platform fee is a capped £375 per annum and most of the ongoing charges for the individual funds are very competitive. There is the risk of having most assets with a single provider but Vanguard would appear to be one of the most stable around and simplicity is an important consideration. Likewise, it’s not a particularly imaginative investment strategy but in my absence an “average” return will suffice.

Gus.

syrio

I'm sorry to hear that.

I'd suggest getting rid of your constraint that you must invest in direct equities and closed funds. This is just making things needlessly difficult. You will be able to find an IFA to manage your investments if you go this route.

Alternatively a single global fund solution that your spouse could manage for theirself. A Vanguard all world tracker for instance. Your spouse may be happy to leave the investing to you now, but they will have to manage on their own in the future and can learn from you now.

Or an annuity, or some combination of an annuity and a single fund.

tony akram

I am very sorry to hear about your health issues and brings home that we all invest but sometimes take our health for granted best wishes going forward .You may want to select a few Investment trusts AIC a good place to start.

Can anyone suggest .........

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Housemartin2

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