How does an IFA help and how to find one?

[sundaysundaysleep]

I'm looking for an independent financial advisor who can help me think about how to invest approx £200k. I don't know where to start!

Is there such a thing as an IFA who can give a one off report type thing for a fixed fee or are they tied into making you a portfolio and then get a % of whatever you might earn on it? Or have some other sort of ongoing fees? What would they need to know and what are the costs involved roughly?

I assume I could meet one online so wondering if anyone has any recommendations? Thank you

I'll be honest, you're in a difficult spot. Believe it or not £200k is not that much for the work involved for a good IFA. You will find one, but do beware.
For gods sake don't touch SJP who charge 5% initial via a bid offer spread, or tie you in to their fees for 2% a year for 7 years on a pension.

Yes there are IFA's that will work for a fixed fee and frankly that's usually the best outcome all round.

You will need

ISA
Pension top up - if you earn - possibly yearly until you've used all ISA and pension allowances
Consider spouse allowances - if you have one.

sent you a PM.

@MichaelFlatulence thanks, what's SJP? I'm quite clueless. I already have a S&S ISA and some premium bonds and a lot will be kept by for my kids uni / future etc. Im not sure where I should save my kids money though as I'd like to be able to hold on to it til they need a house deposit etc (and so they don't just get £X at 18 and blow it all)

I'm also considering buying a flat for them to possibly live in if they go to uni (which isn't that far away) but this sounds like a lot of work...

Do you think I could research this myself or need a IFA?

I would look at things like

Pay off all debts first

Put some money into emergency savings account that pays interest

You can put maximum 50K per adult into Premium Bonds, winnings are tax free
You can also buy for each child in their name

You can put maximum of 20K per adult into tax free ISA per year

Do you pay into a private pension through your employer ? This is also tax free & your employer may add free contributions

You can pay into another private pension, I think £2880 per year

Pay into ISA, pension or savings for any children

Buying a second property is not easy money
You will pay stamp duty, survey, solicitors, tax on earnings, repairs, rules. Buyer beware

Hope this helps

Do you pay into a private pension through your employer ? This is also tax free & your employer may add free contributions

You can pay into another private pension, I think £2880 per year

Not correct. You can put earnings into a pension up to 100% regardless of work, personal pension. If you don’t earn anything you are limited to £3600 gross. Other rules apply for high earners.

You wouldn’t want £50k each in premium bonds - it’s cash. Cash is for short term and emergencies.

SJP St James’ Place. Check the small print of Co names to see if they are part of their network.

@MichaelFlatulence I actually saw someone's name locally who was recommended but they are with SJP, can I ask why they are so bad?

@PhoneChargerPoint thanks that's all really helpful. I've heard that about rental properties but I need to see where the kids might end up for uni. If they need accommodation I'm wondering if it's better to buy somewhere for them to live in rather than it all going on rent

They take a much larger percentage in fees. That means your money has to work hard just to stand still. Avoid.

Pay off mortgage and debts, £20,000 in an ISA, think about putting some into a pension. Put some into easy access savings for emergencies and living expenses and the rest into the highest fixed rate savings you can find with various maturity dates, ie, some 1 yr some 2yr, etc so you get access to lump sums to use or re-invest at regular intervals. Make sure you don't put more than £85,000 into any one banking group so you get the FSCS protection if the bank goes pop. I would say keep it simple, I don't really think you need an IFA.

Because they only sell their own underperforming products (although their new Chief Investment Officer could well improve this), and their charges are so high they effectively steal your growth. They charge 5% initial that’s hidden as a bid offer spread, 1.25% provider fee and only mention 0.5% of that as an adviser charge. They are under scrutiny with the FCA now. They also tie you in for 7 years on those high fees if you try and leave.
Your bank is often a better option but very few do this now. Try HSBC

[not advice] It depends on how accessible you want the cash to be, but an IFA is likely to advise you to invest in the most efficient way possible - so making use of your £20k annual ISA allowances (you could also consider an ISA in your children's names - Junior ISAs with a £9k annual allowance), paying into your pension to get the tax top up (this depends on how your pension is structured). You could start pensions for your children, and can pay £2880 a year which will be boosted to £3600 by the tax rebate automatically paid at source by HMRC.

Then you can look at other savings accounts and investments to maximise liquidity if required and interest rates/growth rates. An IFA will go through how risk averse you might be and structure your investments accordingly.

I personally avoid property - it's such hard work as an investment, but of course many have done very well over the last how many years due to growth in the property market. I just don't fancy having to deal with repairs and renovations, finding tenants, dealing with any issues etc etc. And then having to manage tax returns to declare the rental income. It's a lot of additional work really.