What to do with lump sum?
Discussion
Apologies if there is an obvious answer to this question, but I'm really not au fait with this sort of thing and neither is the chap in question.
A mate of mine has about £50k left over of a compensation payout. He currently has it invested as shares in various companies, through the firms FB Wealth Management and Brooks Macdonald. This was recommended by his solicitors after the payout as a decent place to put the money, in the hope that it may increase over time. They decided where it should go, and into which companies (this my understanding of it anyway, he's not exactly sure of how it works and hence, nor am I).
Long story short (kinda...), it has actually lost a little since being invested. Obviously this is the chance you take, but he's thinking of removing the funds so as to avoid any more losses (and is also aware that it may go up) but is unsure of the best thing to do with the money once removed.
Can anyone suggest what would be a good thing to do with it instead? e.g, put it all into a savings account with a decent AER and just let it sit whilst slowly increasing? He doesn't want to lose any more, so what options does he have?
Any thoughts greatly appreciated - although please explain in layman's terms as this really isn't something we know anything about!
Thanks.
A mate of mine has about £50k left over of a compensation payout. He currently has it invested as shares in various companies, through the firms FB Wealth Management and Brooks Macdonald. This was recommended by his solicitors after the payout as a decent place to put the money, in the hope that it may increase over time. They decided where it should go, and into which companies (this my understanding of it anyway, he's not exactly sure of how it works and hence, nor am I).
Long story short (kinda...), it has actually lost a little since being invested. Obviously this is the chance you take, but he's thinking of removing the funds so as to avoid any more losses (and is also aware that it may go up) but is unsure of the best thing to do with the money once removed.
Can anyone suggest what would be a good thing to do with it instead? e.g, put it all into a savings account with a decent AER and just let it sit whilst slowly increasing? He doesn't want to lose any more, so what options does he have?
Any thoughts greatly appreciated - although please explain in layman's terms as this really isn't something we know anything about!
Thanks.
Shares are 5yr+ timescale so if the advice is good follow it.
Otherwise he should just shoot himself. How much will he lose to inflation in the bank?
In theory they asked him what his risk profile was and why he was saving and what his timescales were.
If so then surely he should leave it be!?
Otherwise he should just shoot himself. How much will he lose to inflation in the bank?
In theory they asked him what his risk profile was and why he was saving and what his timescales were.
If so then surely he should leave it be!?
ringram said:
Shares are 5yr+ timescale so if the advice is good follow it.
Otherwise he should just shoot himself. How much will he lose to inflation in the bank?
In theory they asked him what his risk profile was and why he was saving and what his timescales were.
If so then surely he should leave it be!?
Well he can only assume the advice was good, that's the thing. So that being the case, yes it should be left alone. But it has already lost money and he was just wondering what his other options were, so I thought I'd ask on here.Otherwise he should just shoot himself. How much will he lose to inflation in the bank?
In theory they asked him what his risk profile was and why he was saving and what his timescales were.
If so then surely he should leave it be!?
I'll pass on the suggestion to shoot himself.
He is allowed to just leave it as cash. It will not earn much interest (less than inflation) but he won't lose the face value in the way that any other asset can. He should be aware that guarantees are limited, but £50k is under them.
I think I would look at Gold. Everyone is printing the paper stuff like it's free.
I think I would look at Gold. Everyone is printing the paper stuff like it's free.
I'm not qualified to offer financial advice! but I would be asking, how long has the money been invested? (What's it's performance against the market average) What are their fees? What is their long term track record?. From what I can see Shares are performing really well at the moment due to the lack of yields from bonds so people are switching their investments to stocks and shares in the hope some kind of return, which has in turn pushed the market higher. To be losing money on a rising market I'd be wanting to know what I'm invested in and why, although I'd want to know that information even if it was going up!!
Edited by anonymous-user on Saturday 16th November 12:29
Edited by anonymous-user on Saturday 16th November 12:30
Cheers for the replies, chaps.
Thanks so far, if I can get any more helpful info then I'll report back (if anyone's interested).
grumbledoak said:
He is allowed to just leave it as cash. It will not earn much interest (less than inflation) but he won't lose the face value in the way that any other asset can. He should be aware that guarantees are limited, but £50k is under them.
I think I would look at Gold. Everyone is printing the paper stuff like it's free.
Ok, so gold is a possibility. Thanks.I think I would look at Gold. Everyone is printing the paper stuff like it's free.
Bluequay said:
I'm not qualified to offer financial advice! but I would be asking, how long has the money been invested? (What's it's performance against the market average) What are their fees? What is their long term track record?. From what I can see Shares are performing really well at the moment due to the lack of yields from bonds so people are switching their investments to stocks and shares in the hope some kind of return, which has in turn pushed the market higher. To be losing money on a rising market I'd be wanting to know what I'm invested in and why, although I'd want to know that information even if it was going up!!
It has been about 10 months I think. As for you other questions, I'm not sure, these are all points that can be put to them, he has a meeting with one of their reps this coming week. R1gtr said:
TLDH - I really hope you are right as I am in on this.
What is TLDH? As mentioned, this really isn't something he or I know about.marky1 said:
If they have been managing it for more than 2 years and lost money they are useless. A monkey could make money buying shares the last couple of years.
It's not been that long, I think he's just worried it may continue to fall. He's put his faith in the recommendation and just gone with it so I think he's looking for some assurance or other options of where to put his money.Thanks so far, if I can get any more helpful info then I'll report back (if anyone's interested).
marky1 said:
If they have been managing it for more than 2 years and lost money they are useless. A monkey could make money buying shares the last couple of years.
Exactly, and during that time the management company would have been taking fees, this pretty much sums up financial advisors and wealth managers.Maybe the OP's friend should just get an account with interactive investor or someone like that and transfer the shares to them. At least they won't have more than £100 a year in fees.
Interactive investor have a good community forum where you can find out about TLDH, they are a company bidding for top level domains, and the rights to sell them. The share price has been depressed and only very recently increased, based on speculation. They are not a profit making company currently, and their share price is a complete gamble based on how the market will perceive them. I have a small exposure to them, but only what I can afford to completely lose.
If its only 10 months he should really be sticking with his investments. As already mentioned shares are 5 years+ investments because the market can be volatile. This is the problem with many novice investors, they panic and sell at thie first sign of a loss, which is often just the wrong time!
CaptainSensib1e said:
If its only 10 months he should really be sticking with his investments. As already mentioned shares are 5 years+ investments because the market can be volatile. This is the problem with many novice investors, they panic and sell at thie first sign of a loss, which is often just the wrong time!
FTSE 100 is up 15% during the last 10 months, FTSA All share nearly 20%, I would be disappointed with their performance if they are making a loss over the same period, and charging me for the privilege.Edited by anonymous-user on Monday 18th November 18:18
Edited by anonymous-user on Monday 18th November 18:19
Bluequay said:
CaptainSensib1e said:
If its only 10 months he should really be sticking with his investments. As already mentioned shares are 5 years+ investments because the market can be volatile. This is the problem with many novice investors, they panic and sell at thie first sign of a loss, which is often just the wrong time!
FTSE 100 is up 15% during the last 10 months, FTSA All share nearly 20%, I would be disappointed with their performance if they are making a loss over the same period, and charging me for the privilege.Edited by Bluequay on Monday 18th November 18:18
Edited by Bluequay on Monday 18th November 18:19
The chap from the firm visited today.
As it turns out, once the initial fee (3%) has been taken into account, along with all other costs and charges, the investments have made money - albeit not a lot at this stage. The figure is as near as dammit back at £50k.
They are low-risk, low return investments, but things are looking promising. He suggested that it might be an idea to leave things as they are until the next review, and then maybe think about sliding up the risk scale slightly in order to hopefully receive a greater return. The potential return should outweigh the increase in risk factor so should see greater reward in his opinion.
As it turns out, once the initial fee (3%) has been taken into account, along with all other costs and charges, the investments have made money - albeit not a lot at this stage. The figure is as near as dammit back at £50k.
They are low-risk, low return investments, but things are looking promising. He suggested that it might be an idea to leave things as they are until the next review, and then maybe think about sliding up the risk scale slightly in order to hopefully receive a greater return. The potential return should outweigh the increase in risk factor so should see greater reward in his opinion.
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