Has anyone used a financial advisor for school fees planning?

[DownWithTrump]

I read an interesting article in yesterday's Sunday Times about the use of ISA dividends to fully or partially fund school fees. The article makes sense and I do have a good chunk in a S&S ISA, but I currently pay for fees out of cash flow. I'm not an idiot, but I am out of my depth making these sorts of plans. Can anyone recommend an IFA or financial planning team that they have used to navigate this area?

Ha! Probably not in that sense....

You could try www.findawealthmanger.com - I know someone who has used it and found it really helpful (They will help you find a firm, they are not advisors themselves)

Your best bet is to ask friends/family for local recommendations for an IFA. They will be able to help you make your money work in the best possible way for you, rather than a “one size fits all” approach you may get with a national firm.

The article didn't give any recommendations, just talked through the concept. It's translating that into financial reality I'm struggling with! I will ask family and friends - but at times the cost of private school fees can be contentious....

Don’t mention the school fees to family/friends. Just say you’re looking for a good IFA for general advice, they will then either be able to help you or recommend you someone who can.

There is no real magic to this. Dividends from stocks and shares in an ISA are tax free income so certainly can help if you need income, looking for stocks that regularly declare dividends. Whereas dividends outside that are generally not tax free. So if you can build up a nest egg up to give an income flow an isa is a decent route.

However, if you have other cash flow easily available I would probably use that first - if you keep the dividend cash within the ISA wrapper it will allow bigger growth.

I’ve just gone and read the article and it is really aimed at starting in advance of needing to pay so you have a pot that is already income generating.

I do think I need to make my money work harder. I do already have a pot, but it isn't geared towards dividends. I have been focused on just building up savings, but I think I need to be a bit more tactical, and probably need some help thinking through my options.

I’ve read that article and I don’t think dividend investing is the magic answer to school fees. In the example it’s the £200k pot that is the key not what it’s in. If it was in growth funds you could just sell down and take money out of the ISA.

I think a lot of the financial planners for school fees basically suggest re-mortgaging and paying more into a SIPP instead to get the tax relief which probably works better if you’re older and can access the SIPP. It didn’t feel like the right answer for me.

If you're paying out of cash flow, what's the problem?

I'm not sure you need to pay for a financial planner, you can probably do it yourself. What are you invested in? What's your mortgage like?

Just don't neglect your pension

I'd say yes, get a school fee specialist, though I'm not sure who that would be these days. We engaged one years ago that was recommended in the Telegraph, and what they recommended and did was fantastic, right up to the point where they were bought out by a wealth manager that doesn't have the greatest reputation. After that, we got nothing, and the new ones wanted 6% of our entire holdings for fees! (We sacked them in the end and I've since been doing all the admin myself.)

So be careful who you engage.

Before buyout, ours sorted a remortgage into an lifetime tracker offset plan (where any savings cancel out mortgage interest but give you an emergency pot), put the freed up cash into a low fee FTSE tracker/stocks and shares which has delivered more than the school fees increases, got DH to stick a wodge of cash into his pension which then gets a tax-free lump sum back, and set up ISAs. It's meant we've spread the cost out and got more back. Using cash flow is actually very tax inefficient.

Just be prepared to have a stiff drink ready for when you get the figures...