Investment & Investing

speak to a financial advisor

How do you find one you actually trust? I imagine the good ones wouldn't work for bikeschmucks like us, unless frequenting the watch or car thread I guess.

sidebar of the reddit page gives:

https://adviserbook.co.uk/
https://www.thepfs.org/yourmoney/find-an-adviser/
https://www.vouchedfor.co.uk/

I guess you meet a few and go with the person you like most.

Fuck it, Nutmeg it is then!

I'm a financial adviser (in Australia only, I work remotely i.e. can't give UK based advice) and I work on a fee for service basis. Anyone working on commission is inherently biased. If you meet with some advisers ask how they are remunerated and what restrictions they have on their Approved Product list. An independent adviser (those not owned or licensed by large banks and institutions) will give higher quality advice but may charge more upfront as there are no backdoor commission payments.

But then you end up buying advice from someone who is very good at being likeable, but their ability to advise you financially...unproven.

I would ask for references from past clients if I was getting big dollah advice, no?

Slightly off topic here but also linked. If you had 30K student loan debt and earned 30K, your student loan debt would grow at c. 6% or £1800 a year (I think). Your mandatory contributions would be 9% of anything you earn over 25k for 40 years or until the debt is wiped, which starts out at £450. In year 1, would you try to service the debt by supplementing mandatory payments with contributions from your net salary (£1350), or just put your disposable net income into an ISA. Or try and do both?
I am slightly perturbed by how big the 9% deductions could be in like 10-20 years if my salary grows and the interest has been compounding with minimal contributions made, but also why wipe down something that I may never have to repay? (could not work for any number of reasons, may work for around 30k forever and would not pay it off in the time frame, gov could do something radical).
Any thoughts?

This is good.

My guess is that the vast majority of us will be doing great if we ever get to "Are you on track for your retirement goal?"

Can you use excel? You can model the numbers there and determine the best approach based on expected earnings and inflation.

Anyway. You'll be paying 3% back annually. 9 less 6 inflation, on the initially 30. So that's 33 years and itll be cleared.

I'd pay it down quick. The interest isn't the best and wont be much lower.

Depends if your objective is to become debt free, or to repay as little or as slowly as possible to student loan co.

Retirement Goal: Don't get pasted by some cunt in an Audi before reaching retirement age.

@skinny I tried to do this and this MSE tool helps https://www.moneysavingexpert.com/students/student-finance-calculator
but there is so much uncertainty (not helped by current events) over the next 5-10 years and beyond on inflation and salary expectations that it really isn't possible to do accurately

That would require those clients being able to determine the difference between good advice, bad advice and luck, and not be fabricated or exaggerations of the truth. I get it though, you can keep asking questions until your confidence is at the a level you can accept, but I feel that if you need to go to the a-z of profession X to get service Y you've already lost, unless you know more about Service Y than the people delivering service Y, in which case why are you even outsourcing that role?

I suppose they could sense check your plans, offer 'have you considered' type suggestions.

@ChasnotRobert objective is to pay as little as possible to the student loan company as possible during the next 30 years. I think pay as little as possible without allowing interest to compound, and if my salary grows, I service the debt with mandatory contributions not net salary supplements

yeah I completely get what you're saying.
it's not my recommendation to get an adviser, just what OP asked.
I don't know what would stop one using a Vanguard Tracker Fund to be honest. the whole point is to pick something with as low a fee as possible.

If markets are stable something with a low fee is smart. Fees aren't everything though. During volatile market conditions actively managed funds (often with higher fees) will very often outperform indexed funds.

Aim is to pay back the most possible while the interest rate is lowest.
Given its rpi+ 4% its unlikely to get much better than it is now.
Given you're unlikely to earn less than you do now, I'd suggest you pay it back as quickly as possible. Or the interest rate on it will increase and you'll end up paying back more.

There are a few variables but it's unlikely we will get lower interest rates.

And given your earnings and the cut off period you will pay it back one way or another.

During volatile market conditions actively managed funds (often with higher fees) will very often outperform indexed funds.

Apart from the ones which don't.

Edit: yes, long only funds will suffer as a group in downward cycles but I've yet to see compelling evidence that active funds are better in the long run.

That's a really good argument for doing nothing your whole life. Making informed and sensible decisions based on market conditions is better than blindly hunting for the lowest fee. Houses for courses mate.

Houses for courses mate

chill out

Agreed, long term is a different story.

It's a good call to review your funds regularly is all I'm saying, adjusting for market conditions.

I think it's one way of saying as a retail investor if you pick an active fund and it outperforms a tracker long term you got lucky, even though you might erroneously put it down to good judgement.

Kinda knowing what you don't know.

I wouldn't say this holds true for people who have much deeper knowledge than a retail investor could ever have, i.e. if you work in finance.

@bobble and @skinny I did a little research into this and decided probably the best thing to do before paying any extra back is to wait until I finally settle on the career path that I'm going to stick with.

Having done a 3-year degree I've got £43,000 debt which will be increasing at about ~7%. If I get a job that has the average starting salary (£22-30k depending upon source), and it were to increase close to RPI then by the end of 30 years I wouldn't come to remotely close to paying it back. I think the greatest uncertainty in this equation is your expected future income rather than inflation rates and returns on savings/investment that you do in lieu of paying back your student loan.

Additionally, for most recent students I'd recommend setting up a Lifetime ISA instead of paying back your student loan given a guaranteed 25% government bonus that you can use on a house deposit.

@bananaskid @skinny I agree. If I (we) aren't going to clear it, making voluntary contributions is such a waste.
I have unused maintenance loan and I'm in third year, I am thinking about taking about 2.4k in maintenance loan and putting £1200 into the first month into a help to buy ISA (2.5% AER then 25% on top of that if used on a house), and then the rest as £200 max contributions to the ISA until my first payday in October when I can continue to do it with my salary. Is that stupid?
Also I think the lifetime ISA and help to buy ISAs are different.

Assuming your salary will increase only by RPI though is a very pessimistic assumption. That's effectively saying you'll never get a real term pay rise. Is that a plausible assumption? Without meaning this in any way rudely, even people who are not great tend to get promoted at some point... Obviously this depends on the industry etc but I don't know anyone who would be comfortable accepting the same money indefinitely, expectations (and what's available) increase over time. Especially in grad roles