Where to get best investment advice for the clueless

[FarmerJoe]

I am getting some money from an inheritance and need to get advice on what to do with it.

I have a limited pension (due to being a carer) so would like the money to help when I retire.

There are some financial planners who will do a fixed fee for initial planning and then you implement it yourself. Expect to pay £3-5k.
If you want them to implement it as well, then it could be £1.5k per year or a percentage of the assets, such as 0.75%.

There are things you can learn yourself, if the inheritance is quite small. For example, maximising ISA and pension allowances each year for a few years can help get the money from a taxable savings account into more tax efficient accounts.

You may find there are some charities like Age Concern who have guidance on how getting an inheritance can affect eligibility for certain benefits.

The Meaningful Money podcast is excellent for novices

You can get a good financial adviser to help you. I can't believe the prices a PP has quoted though !
I've never paid my financial adviser a single penny ! He gets 'paid' as a % of the profit he makes me ! So if he doesn't make me a profit, he gets nothing.

So do your homework when choosing one.

I think a rough indication of amounts would be useful. Are you talking about 1k? 10k? 100k? A million???
That affects quite how much you might be prepared to pay for advice.

Thank you for your comments

About £200k

I would prefer to pay a FA with profit than fee but not sure if that is the correct way to go.

I would avoid percentage based fees as much as you can.
Autumntimeagain has found an amazing deal with their adviser. I don't know any who would agree to only being paid when investments are doing well. They may do an initial product fee and then an assets under management fee but if the assets value falls, in my experience they still get a percentage of the remaining assets.

£200k with a 3% fee yearly ongoing fee, would mean paying £6000, per year, every year.
If the investment grew by 5% each year on average, then
£200k grows to £210k in year one but you have a £6300 fee, bringing it down to £203700. The following year, that then grows by 5% bringing it to £213885 on which you pay a 3% fee of £6416.55.

If you had paid £4k for initial advice, then invested it yourself. Then £196k with 5% growth is £205,800 then year two it is £216,090 and at that stage is already higher than what you have paying a 3% adviser fee.

Maybe the adviser fee is lower, 1.5%, after four to five years, you would be better off having paid an initial fee upfront.

Advisers used to do free advice (pre 2013), which of course was not free. They would get kick backs from product providers, from fund providers, from insurance companies. Those kick backs could be an initial commission, plus an ongoing commission for the entire length of time a client held a product.

Shop around for financial advice.

Unbiased CoUk and https://www.thepfs.org/yourmoney/find-an-adviser/ can be useful places to look for a financial planner.

What age are you as that may influence some of your decisions. When you say you're a carer do you mean a "family" carer on Carers Allowance or a paid carer (eg in a care home)?

If you're earning you can pay the equivalent of your yearly salary (up to £60,000) into a SIPP and get tax relief on it.

It's worth knowing that even if you're not earning (eg you're on benefits - no salary, not self employed) you can put £2,880 into a pension every year and the government will top it up to £3600.

If you earn less than £60,000 (or in your case maybe are an unpaid carer on benefits), but want to pay in the full £60,000, you can make a non-relievable contribution to make up the difference - eg if you're an unpaid carer you make a contribution of £2880 and get tax relief of £720 giving you a contribution of £3600. You can than make a further non-relievable contribution of £56,400. Brokers/pension funds don't have to accept non-relievable contributions and of the well-known brokers Hargreaves Landsdown is the only one I know of that allows it. You have to phone them up to do it.

If you had a pension scheme set up but didn't max out your contributions in previous years, you can use the pension carry forward rule to take advantage of any unused allowances in the previous three tax years (the annual allowance used to be £40,000 p.a.).

A couple of sites about SIPPS (self-invested personal pensions):
https://www.which.co.uk/money/pensions-and-retirement/personal-pensions/what-is-a-sipp-aBlOf9l200cM

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/self-invested-personal-pensions?source=mas

In terms of investments, you should have a think about your age (& when are you hoping to access your pension) and how risk-adverse you are. If you search on the Moneyvator website there are articles that help you understand your risk profile. (eg this one: https://monevator.com/what-you-need-to-know-about-risk-tolerance/ )

As nannynick pointed out be careful to understand how fees can affect your investment.

Also, don't ignore ISAs as part of your planning, especially if you're young enough that you won't be able to access your pension for some years.

Thank you all so much for the advice.

I am old! 57 but gave up teaching to care for my relatives. One who has now died and left me the inheritance. I am looking after the remaining relative but I am working part time and getting enough to live on. I have a part time teachers pension which pays a really small amount each month.

The links are so useful. Thank you all for your time.

Ignore the above post, OP. Load of rubbish.

I recommend watching some clips of Jack Bogle speaking about investing.
A good book to look at for U.K investors called 'How to Earn the world' by Andrew Craig.
The Monevator investing blog is good as a weekly read.
Most important thing is to work out your willingness and need to take risk and work back from that with an Asset Allocation you can live with through thick and thin.
I recommend low cost globally diversified index funds for the majority of the money.

Correction - How to own the World by Andrew Craig

Go and see a good financial advisor

its too much to deal with yourself

£200k is a perfectly manageable amount to invest yourself.
Vanguard fees are low and investments are easy to set up .
First, utilise your isa allowance of £20 k per annum.
On 6.4.24 utilise next year £20k isa allowance.

Read the books and podcast recommended above and take time to consider the balance of £160 k

Maximise your pension for this year using this years estimated earnings and the government will top up your contribution via Vanguard 6-8 weeks later.
The important thing is to start.

This is good advice.

Vanguard are good starting points for beginners, and even seasoned investors use them.

But the best advice I can give, is get your account setup, look to have a few index trackers, S&P, or Global, pound cost average in, and use money Morley funds right now for a risk free 4% as you build up.