£100k for investment - is £2,500 a reasonable one off fee to manage this investment?

[Watellz]

Looking to invest for 5+ years. Don’t want to be choosing my own stocks and shares etc. Just want to hand it over to someone else (in this case a bank) to manage it for me and deal with tax wrapping etc.

Does a one off fee of £2,500 sound reasonable for managing a £100k for the duration of the investment?

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I'd also recommend Vanguard but not Life Strategy as too cautious and UK focussed. Go Global All cap or Developed World Ex UK.

I have stocks investing experience.

Active managed isnt always better. Its have been researched that over the past 20 years, approximately 90% of U.S. actively managed equity funds underperformed the S&P 500 .
In 2023, 74% of mid- and small-cap active funds underperformed their benchmarks

Practical tips :
I would recommend stick with a 2-3 low cost passive ETFs. You can just have 2 ETF - S&P 500 ETF and a global ETF. That's it! You can just choose vanguard ETF's to keep it simple to start with. Open account in investengine or trading212 to buy these. These are one of the lowest cost accounts in UK.

Its better to learn about basics of stock market before you take next steps. Would recommend reading "Simple path to Wealth" by JL JL Collins , For UK specific - you can check out "Smarter investing! by Tim Hale.

By the way if you still want to go through them - I would try to know a lot about them.
wondering whether the are financial planning or assets management firm?

Ask about how long they have been supporting people and what is their fund performance. You want to know their long term performance (10 years or most preferably).
How big is the team, what speciality do they have?

Is it going to stocks or ETF? Their process in choosing stocks or etf? Are they growth/ value or momentum focused? What sectors? USA/UK or World or emerging market % wise?

Hope this helps! Let us know how you got on!

OP pls don’t be stupid and pay this fee. The know how about how to open a tracker isa is so easy. You can do it I premise! If you pick a generic one eg uk ftse tracker you will be fine. Takes less than 30 mins

It's far too much. Invest a day or two looking into it yourself instead.

For five years you don't want stocks and shares it's not a long enough time frame and you may even lose money. You want at least a ten year investment for S&S.

Just split it between a few high interest fixed rate bank/building society accounts (under £85k each), currently I would go for one or two year terms and look at rates again then. Look on the Money saving expert website for accounts with the best interest rates. You can put £20,000 into an ISA each year for tax free interest so you should do that, particularly if you are a higher rate tax payer.

I had one of these conversations with my bank a few years ago and their suggestions were rubbish. Is this bank only going to suggest it's own products? You really want an independent financial advisor if you really want to go down this route, so they should look for 'the best' solution not only a limited number of products.

There is value in paying for financial advice. Theres good reason advisers have to do a good number of qualifications to become certified. If it all goes to plan you should make more in investment growth and therefore outweigh fee costs in the long term.

That being said 2.5% does seem high. i’d maybe shop around a bit. And get a breakdown on what they’re doing for the fee. Quarterly meetings and reviews of performance or annual? do they manage the investment choice or is another fund manager involved (if so what’s the fee to them).

You don’t need someone to pick investments. Actively managed funds rarely do better than trackers. The main thing that eats away at your money are fees. Just stick it in a low cost global tracker eg Vanguard Global All Cap

Financial advisers are better for comprehensive moment management such as making sure you have cover for life events. are saving enough into a pension, have about the right amount of money easily accessible and/or invested considering the right time horizon (eg money you don’t need for 5 years or more is better generally in equities). They can also help assess your risk profile. But this isn’t that difficult with the amount of money you are taking about. You can work this all out yourself with a bit research of research. Definitely not worth spending 2.5% of your portfolio on.

Thank you all for your comments. They have made me really question what I was planning to do ie pay £2500.

I will reread all the advice given here and take my time to gain knowledge and understanding. Massive appreciation.

I'd like to add one more thing. In general I agree with most of the above, the fee is very high for the period you are looking at (plus all the provider would do is likely stick it in a global equity tracker fund that you can find onT212).

However, I am slightly more concerned with your saving period. 5 years may seem a long time but in investment terms it isn't. We have had a 'bull' run for about 15 years, it is very feasible that this could stop. If you were investing for 10 years it likely would even be worth thinking about, but if only investing for 5 you need to genuinely need to ask yourself are you ok if the value was lower at the end of the period? If the answer us yes, then great. But if you might need this money then please be a bit cautious.

Lastly, I think (although it is not 100% clear) that what you are saying is you'll invest £20k each year for the next 5 years. If that is the case then you down have some downside protection effectively included as if the value goes down, you will simply buy the next portion at a lower price (called averaging down), which effectively means you will 'recover' sooner when the market rises. But if you are investing £100k up front be careful.

Sounds high - I like platforms like Vanguard . Also look up Boring Money. I find Holly to be very informative.