Saturday, 2 April 2016

How I invested my savings from February

Each month I will be publishing the following regular progress updates toward achieving my second goal for 2016 which includes the pursuit of Financial Independence:
1. Portfolio Value and Net Worth as it stood at the end of the previous month
2. Income, Expenses and Savings achieved for the previous month
3. My Investing Choice for the previous month's savings

This post covers point 3 above: My investing choice.

Freedom Kitty Investment - Feb 2016

As I discussed in my Income, Expenses and Savings update I was able to save £1,048.22 toward my Freedom Kitty for February 2016.

Last year I decided that I wanted to have a stocks and shares ISA even if I was only able to invest a small amount into it, so since July 2015 I've been saving £150 per month into an ISA with St. James Place. With the tax year end fast approaching I decided that the best place to put my hard earned savings from February would be into this ISA - anything I can do to max out the ISA for the 2015-2016 tax year would be a good idea.

However, while I took time to decide where to put the money, as well as deciding what to do with some profit I made on the recent sale of my flat (which completed in January) I didn't get chance to invest the money during February. Therefore you will see when I publish my investing post for March how much I finally managed to transfer into my ISA before tax year end (essentially the sum of my savings from February, March and the profit from my flat) as well as the fund choice.

Sorry it's not much of an update about my investing for February, but since I have committed to providing 3 regular progress updates per month on my financial independence goal I felt it was important to be consistent and publish the 3rd post for February anyway (even though the detail will really be coming in March).

Personal Pension Investment - Feb 2016

In February my Personal Pension received a regular contribution from my Business Account of £3,000. My Personal Pension is held with St. James Place. Previously I'd had 3 different pension accounts which I'd accumulated from working at different places where a workplace pension was provided, so I chose St. James Place to consolidate these (a process I began back in February 2015).

One of the reasons I chose St. James Place (SJP) is because I don't know a thing about investing (or at least I didn't at the time of my decision!) and so I was looking for somewhere with a Financial Advisor I felt I could trust. Since my parents had held their pensions with SJP and were very happy with how their affairs had been handled it seemed a sensible decision to follow suit. I had previously sat in on some of their meetings with their financial advisor to make sure I was happy that everything was being done as I felt it should be (although I'm no expert, I have worked at a Pensions company in my past, and I felt I knew a bit more than my parents so could let them know if I felt anything didn't feel right!) I like that you get assigned a financial advisor who will always be your contact, and they will come out to see you at a place and time that's convenient for you several times a year (on an as-needed basis). So far I have been very happy with the SJP product and service, though it's a bit early to tell how well the investment will do.

Since I have a financial advisor at SJP he ascertains my propensity to accept risk, and selects the best investment options on that basis. The approximate split for the current allocation of my contributions is as follows (I've included links to the fund factsheets on Trustnet):

SJP Global Equity - 15%
SJP Schroder Managed - 15%
SJP Strategic Income - 15%
SJP Strategic Managed - 15%
SJP AXA Framlington Managed Pension - 15%
SJP Multi Asset - 15%
SJP Global Managed - 10%

Do you use a Financial Advisor or Company to invest with or do you undertake your own investing? If you self-invest, I'm interested to know how you first learned the basics of how to do it, and how you found the process of investing in the early days.
Do let me know in the comments if you have any thoughts...


  1. Hi! Suggest you read the monevator website for basics in investing - please pay particular attention to charges as looking at some of the fact sheets it appears sjp are truly taking you to the cleaners in this area

    1. Hi Ghost Rider,

      I have started taking a look at Monevator and intend to continue doing so - I'm also planning on reading Tim Hale's Smarter Investing. I'm unlikely to switch my pension from SJP in the near future as I only moved to them about a year ago and there are penalties for leaving within the first few years. However, I will definitely be looking at my options for self investing my Freedom Kitty savings.

      Thanks so much for your tips and for stopping by.


    2. You wouldn't necessarily have to leave them; just stop paying into that pension (check there are no penalties first), and start another with a different provider.

  2. Hi OR

    Thus far, I've not felt the need to pay for the services of a financial advisor.

    When I started investing in 2014, prior to coming across PF/FI blogs, I took guidance just from the financial sections in newspapers and jumped in feet first!

    I knew that I needed to diversify, not put all my eggs in one basket etc.

    What I didn't know so much (which I learned from Monevator et al) was that fees eat into your gains, so I ended up switching all bar one of my funds into index trackers.

    I still invest via Hargreaves Lansdown which has higher than normal fees but also invest with another platform where the fees are lower.

    I choose my own investments and shares/ITS, and while some will turn out to be great, others not so great but that's part of the learning curve.

    Perhaps it might be worth you having a look at SJP's fees as they seem (compared to mine) to be high. One of your funds, SJP Multi Asset charges 2.14%. Might not seem a lot but that would be eating away at any gains you make, plus there would be SJP's own fee on top.

    The closest fund I have to your multi asset would probably be my Vanguard LifeStrategy 80% which charges 0.24%.

    Still, I'm happy to choose my own investments and some people are not and since investment is so personal, it's just a case of doing what you are comfortable and happy with - don't do anything that stops you from sleeping well at night!

    Good luck with your investments anyway!

    1. Hey Weenie,

      Thanks so much for your insights and tips. I have for some time suspected that I'm paying over the odds for being with SJP. However, they really did work wonders with my parents' affairs, turning around a situation where they were significantly behind where they needed to be in terms of pensions/investments and rapidly approaching retirement. Now my parents have enough to be able to enter drawdown rather than having to purchase annuities (which as far as I'm concerned is a big relief, I'm not a fan of annuities!)

      I know that if my parents had self invested perhaps they may have done even better, but that's not something that would have worked for them - they're not that way inclined. That's what led me to sign up with SJP myself because I've seen real, positive results and at the time I signed up I was extremely busy and wanted to feel that I had a plan in place for my pension. Within the first number of years of being with SJP there are penalties for leaving early, so in terms of my pension, I will be leaving it with them, despite the high charges. I feel pretty confident that they're going to get me to where I need to be by the time I reach 50 in terms of pension.

      Where I *am* going to be making changes is with my Freedom Kitty savings. Last year I took out an ISA with SJP, but moving forward I don't plan to hold my ISAs through them - instead I'm going to look to self invest - by finding an ISA provider I'm happy with and choosing funds myself (once I've read up a bit more and feel like I understand it). I see you're in the Vanguard LifeStrategy 80% - I was reading about the Vanguard Life Strategy products on Monevator's site yesterday and think these will be the place I'm most likely to start - I just need to jump in like you did!

      Out of curiosity, I'd be interested to know who you get your ISAs through now?

      Thanks again so much for your tips and for stopping by, I really appreciate it.


    2. Hey OR

      Obviously leaving SJP now would be daft with the exit charges but perhaps something to consider after a while if you are not happy with their performance. At the end of the day, if you are happy with what they are doing and it sounds like they did wonders for your parents, then you can justify the high fees.

      My ISA for the last couple of years has been with HL and consists mostly of funds. This tax year however, my ISA will be with AJ Bell Youinvest which will consist of ETFs, ITs and shares, ie no funds. I may just switch every other year, to mix things about!

    3. There's an article here that gives costs for different platforms:
      You can see from the tables at the bottom that the best platform depends on your portfolio size; usually a percentage-based one will be best starting out, but as your fund grows, a fee-based one may be better, especially if you don't make many trades. Because of that, make sure you choose one with no transfer fees. FWIW, I started with Cavendish Online (which is actually Fidelity), but I'll be moving to iWeb as my portfolio's getting to the point where CO won't be cost-effective.
      I agree with weenie that some of those fund charges are very high; ideally, you should try to keep total fees (fund+platform) below 1% (and obviously, the lower, the better). If you can't move provider, then at least look to invest in cheaper funds.