Decided to read [broken link removed]. First it should be noted that it is written from an American perspective especially with respect to tax aspects. It was also addressed to financial advisors as a sort of morale booster from Vanguard.You should meet with a Financial Planner and set out what you are trying to achieve. www.sfpi.ie
For full disclosure I am a board member of the SFPI.
The current portfolio is not appropriate for your needs because it wasn't built with your needs in mind. There is no capital gains tax on death so you have an opportunity to restructure now without exposure to capital gains taxes. That may not be the case in the future.
In a recent study, the Vanguard Group showed that competent Financial Planners typically add around 3% a year to their clients' investment returns compared to the returns an average investor might achieve on their own.
They identified seven key areas that each contribute to this figure. The seven key components of the value of advice are:
1. Asset allocation Often the most important driver of long-term performance.
2. Rebalancing Keeping the portfolio balanced over time adds real value.
3. Cost-effective implementation Each Euro paid in charges is a Euro off of your potential returns.
4. Behavioural coaching Helping you to avoid common behavioural pitfalls can substantially increase your chances of investment success.
5. Asset location strategies Tax-efficient vehicles are a key tool in adding value.
6. Spending strategy Helping you to devise a spending strategy that maintains maximum tax efficiency.
7. Total return versus income Add value by advising you how to attain income in a low-yield market.
Marc Westlake Chartered and Certified Financial Planner
“Putting a value on your value: Quantifying Vanguard Adviser’s Alpha in the UK”
One of my favourite client meetings was with someone who had a bunch of stock in his employers company. We advised him to sell and diversify.
He came back two years later and said to me; “ I don’t need to pay someone to tell me I should diversify”. To which I said;”we’ll have you?”
“Err, no”
I hope you would agree that the reverse is also true.Posts on AAM cannot be justified simply because they are pro-DIY investors.
Certainly not the Dalbar evidence. Even if we accept their interpretation of the figures that mutual fund investors underperform the market more by their bad behaviour than by being gouged, my guess is that the majority of those retail investors did have "professional" advice and were not saved from themselves by so doing.All of the evidence shows that investors make a pig’s ear of things when left to their own devices.
Certainly not the Dalbar evidence. Even if their interpretation of the figures is that mutual fund investors underperform the market more by their bad behaviour than by being gouged, my guess is that the majority of those retail investors did have "professional" advice and were not saved from themselves by so doing. If the punters behaved so badly who do you think benefitted from their bad behaviour? Remember the stockmarket is a sort of zero sum game.
All of the evidence shows that investors make a pig’s ear of things when left to their own devices.
As Dalbar points out in another article, nobody should expect to beat Mr Market. That's because Mr Market is an artificial construct with constant rebalancing at no cost. However an index tracking low cost fund comes pretty near. I will repeat my critique of Dalbar's interpretation of the gap between mutual fund investors' experience and that of Mr Market.My question is “how many people get those market returns when they go DIY?”