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Purchasing index funds directly vs. via a financial adviser

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Hi,

My sincere apologies if this has been covered before. I've searched through some similar headings but some of them weren't answered in the way that I was looking for. That or I couldn't find the one that answered my question.

The question is this:

What is the advantage of me purchasing an index fund like Blackrock or Vanguard via an adviser versus purchasing it directly from the fund of interest?

I've been given answers from advisers that though it would be cheaper to buy directly that they would provide a better service such as tax reporting and analysis versus me doing it directly.

I haven't had any experience with purchasing index funds directly and I'm not even sure how easy it would be to transfer existing funds I have purchased via them to me.

Thank you for your time. If this has been answered before please point me in the right direction.
 
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The first thing I would ask is what are you trying to achieve, income or growth, that IMO is really important.
If you are youngish, you are probably after maximum growth minimum income, if you are close to retirement you are probably after maximum steady income minimum growth.
That is generalising, but you get the drift, you always need growth, but the growth-dividend ratio changes as you get older.
As a general rule of thumb, if you are talking only index funds, paying an advisor seems pointless.
What is more pertinent, is which funds will give you the exposure you want, with the minimum management costs.
 
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The first thing I would ask is what are you trying to achieve, income or growth, that IMO is really important.
If you are youngish, you are probably after maximum growth minimum income, if you are close to retirement you are probably after maximum steady income minimum growth.
That is generalising, but you get the drift, you always need growth, but the growth-dividend ratio changes as you get older.
As a general rule of thumb, if you are talking only index funds, paying an advisor seems pointless.
What is more pertinent, is which funds will give you the exposure you want, with the minimum management costs.
That is good advice.
I am in my 40s unfortunately and late to the game.

I am trying to achieve growth and aiming for income later.

I think I would be better off going on my own but I just thought maybe there was some hidden advantage that I may not have considered. To be honest, I am not too happy with my adviser at present hence my going on this forum here. I am looking into stocks later but want to take care of my index fund for now. Stocks are just too much for me to catch up on at the moment. Lots to read on here.
 
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That is good advice.
I am in my 40s unfortunately and late to the game.

I am trying to achieve growth and aiming for income later.

I think I would be better off going on my own but I just thought maybe there was some hidden advantage that I may not have considered. To be honest, I am not too happy with my adviser at present hence my going on this forum here. I am looking into stocks later but want to take care of my index fund for now. Stocks are just too much for me to catch up on at the moment. Lots to read on here.
Look I have never used an advisor, but there are some on here, who are genuine guys and I believe a good adviser is probably great for some people.

But if you are looking at an investment forum, you will soon start and form your own ideas and plans.

This forum is great a bit like a bbq with all your investing mates, so just ask questions people will answer them, work out what you really want and go for it.
I lied, I did go to an advisor a long, long time ago, I quickly worked out it wasn't my bag.
He wondered how the hell I had so much money, working for wages.
 
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That is good advice.
I am in my 40s unfortunately and late to the game.

I am trying to achieve growth and aiming for income later.

I think I would be better off going on my own but I just thought maybe there was some hidden advantage that I may not have considered. To be honest, I am not too happy with my adviser at present hence my going on this forum here. I am looking into stocks later but want to take care of my index fund for now. Stocks are just too much for me to catch up on at the moment. Lots to read on here.
Ideally, I see the optimal portfolio of assets being a mix of:

- Equities/stocks
- Fixed income term deposits and corporate bonds
- Property
- Physical precious metals (gold and silver)

Currently I am only a holder of equities and precious metals. Different assets need to be managed differently.
 
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Ideally, I see the optimal portfolio of assets being a mix of:

- Equities/stocks
- Fixed income term deposits and corporate bonds
- Property
- Physical precious metals (gold and silver)

Currently I am only a holder of equities and precious metals. Different assets need to be managed differently.
I like that breakdown. Since you only hold equities and precious metals at this time, do you manage this all yourself? If so, what is the 'portal' that you do this through? Is this with online accounts with which company?
 
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This forum is great a bit like a bbq with all your investing mates, so just ask questions people will answer them, work out what you really want and go for it.
I.
That's a good way to look at it. My problem at the moment is I'm not sure how to even get my feet wet.
The thing with an adviser is that it seems to be 'automated' for me but I am sure I can set this up myself as well. I just don't know how easy it will be to do on my own at this time.
 
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That's a good way to look at it. My problem at the moment is I'm not sure how to even get my feet wet.
The thing with an adviser is that it seems to be 'automated' for me but I am sure I can set this up myself as well. I just don't know how easy it will be to do on my own at this time.
Well with stocks, you have to ask yourself, do I want to buy and sell for capital gains or buy and hold for income.
The actual process of buying and selling shares is easy, just set up an account with one of the platforms like NABTRADE or COMSEC, link it to an account with your money in it and away you go. It takes a few minutes.

What is more important, is deciding how much time you want to spend researching, your investment decisions.
If you want to make it a full hands on hobby, charting may be for you, if you want to buy certain shares because you think it is a good business with upside, fundamental research may be the go.
If you just want to put money in the market, with a view to keep adding over your working career, well then ETF's and or LIC's may be the go.
With ETF's you can diversify and get market returns, with minimal worry and or research,
all that requires is finding out which sectors you want to cover then buy ETF's to suit, easy.

There are ETF's that cover the ASX, property, overseas markets etc, just use the search function on the home page to search the codes e.g VAS, or VAP and read away, then ask questions.
So like I said it depends how active and interested you want to be, otherwise just give the money to an adviser.:2twocents
 
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Well with stocks, you have to ask yourself, do I want to buy and sell for capital gains or buy and hold for income.
The actual process of buying and selling shares is easy, just set up an account with one of the platforms like NABTRADE or COMSEC, link it to an account with your money in it and away you go. It takes a few minutes.


There are ETF's that cover the ASX, property, overseas markets etc, just use the search function on the home page to search the codes e.g VAS, or VAP and read away, then ask questions.
So like I said it depends how active and interested you want to be, otherwise just give the money to an adviser.:2twocents
Thank you for taking the time to write that.

The ETF seems to be the way to go for me as there are certain companies I feel are strong performers in their industry.

Quick question about NABTRADE vs COMMSEC - it seems COMMSEC is better for international funds compared to NABTRADE? I asked about a broker for international stokes through my accountant but the one he suggested said they only do a minimum of $10,000 transaction... wtf?
 
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I like that breakdown. Since you only hold equities and precious metals at this time, do you manage this all yourself? If so, what is the 'portal' that you do this through? Is this with online accounts with which company?
ING Living super is my main trading on equities/stocks. I have a CommSec and Bell Direct account also, that I hardly use.

I buy precious metals from the Perth Mint and KJC bullion in Sydney.

I also trade CFDs sometimes which are high leverage and high risk.

So if you are completely new to the stockmarket; I would recommend that you first go to the ASX and enter the free tournament that they run twice a year:https://www.asx.com.au/education/sharemarket-game.htm

There is also plenty of education on the ASX website.

This will help you to get to know the largest companies in the ASX, give you a feel for buying and selling shares, and make you familiar with the basic market information on stocks. Learning to read company activity reports and financial statements are important also.
 
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Thank you for taking the time to write that.

The ETF seems to be the way to go for me as there are certain companies I feel are strong performers in their industry.

Quick question about NABTRADE vs COMMSEC - it seems COMMSEC is better for international funds compared to NABTRADE? I asked about a broker for international stokes through my accountant but the one he suggested said they only do a minimum of $10,000 transaction... wtf?
I personally have used COMMSEC for years, I used a private broker when I first started buying shares (about 35 years ago), but changed over as soon as I realised I was wasting my money.
I haven't researched other options, as I have been fairly happy with Commsec, others may be better or cheaper, shop around.
Just my personal opinion.
 
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ING Living super is my main trading on equities/stocks. I have a CommSec and Bell Direct account also, that I hardly use.

I buy precious metals from the Perth Mint and KJC bullion in Sydney.

So if you are completely new to the stockmarket; I would recommend that you first go to the ASX as they setup up like free tournament to enter:https://www.asx.com.au/education/sharemarket-game.htm

This will help you to get to know the largest companies in the ASX, give you feel for buy and selling shares, and make you familiar with the basic market information on stocks. Learningo read company activity reports and financial statements are important also.
Oh wow - that game is wonderful. I will get into that.

Thanks for the info re: the precious metals.

Will have a look at ING - quick question - is there any reason why you have the separate accounts with CommSec and Bell Direct? Did you start with those and then ING ended up being the one that fit better for you? i.e. in terms of cost or convenience or access to certain markets?
 
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Thank you for taking the time to write that.

The ETF seems to be the way to go for me as there are certain companies I feel are strong performers in their industry.

Quick question about NABTRADE vs COMMSEC - it seems COMMSEC is better for international funds compared to NABTRADE? I asked about a broker for international stokes through my accountant but the one he suggested said they only do a minimum of $10,000 transaction... wtf?
CommSec is free to open and free to maintain, but you will need to open an additional Pershing international account once you have opened the domestic CommSec account.
 
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Oh wow - that game is wonderful. I will get into that.

Thanks for the info re: the precious metals.

Will have a look at ING - quick question - is there any reason why you have the separate accounts with CommSec and Bell Direct? Did you start with those and then ING ended up being the one that fit better for you? i.e. in terms of cost or convenience or access to certain markets?
I like to only hold physical precious metals. I have held on-market precious metal ETFs before. Buying gold and silver producing stocks is another way to get exposure to precious metals.

Bell Direct and CommSec are both OK. You can open up the accounts for free and there is no obligation for you to trade. So when you are ready, open both if you like, and just pick the one that you like best once you have learnt all the functions on their platforms.

I transferred my Super to ING Living Super because I wanted to be in control my money to buy and sell shares without having to setup a SMSF.
 
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I transferred my Super to ING Living Super because I wanted to be in control my money to buy and sell shares without having to setup a SMSF.
Oh interesting. Thanks so much for all the above information.
Might start with CommSec.

I have always wanted to get into precious metals as well but that will be another project for another day.

Going to decide on going ahead with the financial adviser for the fund or not this week.

All of the input from everyone on this thread has been genuinely useful. It's a bit scary diving into all this but I suppose inaction is the bigger disease here for me.
 
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Oh interesting. Thanks so much for all the above information.
Might start with CommSec.

I have always wanted to get into precious metals as well but that will be another project for another day.

Going to decide on going ahead with the financial adviser for the fund or not this week.

All of the input from everyone on this thread has been genuinely useful. It's a bit scary diving into all this but I suppose inaction is the bigger disease here for me.
No problems.

So a financial advisor will get to know you personally and do a risk profile on you. Then build you a portfolio of assets. In saying this, there is no guarantee that a financial advisor will make you money.

A CommSec account is free to open and free to maintain. So there is no harm in opening an account up to get a better idea and understanding of the stockmarket.

As for precious metals. When I buy them I see it as like saving money in a bank. I will only sell if I am in severe financial hardship or if the price of gold and silver skyrocket. So it is a lifelong form of saving if you like.

Just remember never to buy or sell any asset that someone tells you to unless you have done your own homework and research first.
 
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No problems.

So a financial advisor will get to know you personally and do a risk profile on you. Then build you a portfolio of assets. In saying this, there is no guarantee that a financial advisor will make you money.

Just remember never to buy or sell any asset that someone tells you to unless you have done your own homework and research first.
I feel that my advise has lapsed and been outdated for several years and even with the current advise I feel as if the experience is lacking. I was told to try to invest in an actively managed index fund which from all the reading here and elsewhere say that it is very unlikely to outperform a non actively managed one.

Very sage advice re: never buying or selling without doing research first.

I will keep that in mind.

Re: Precious metals that makes sense. I suppose it would be a bit more recession proof than money in my actual bank.
 

So_Cynical

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I was told to try to invest in an actively managed index fund which from all the reading here and elsewhere say that it is very unlikely to outperform a non actively managed one..
An actively managed index fund is not an index fund, it's a fund! an index fund tracks the index, the index manger's (Standard and Poor's etc) do the active management.

If you want to buy a index fund just buy the ETF very similar MER etc.
 
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Hi,

My sincere apologies if this has been covered before.
Firstly - welcome to ASF! :xyxthumbs

In an attempt to answer the question, I'll use the analogy of saying it's somewhat like many things.

For example, if you're familiar with Sydney and have been there many times then you don't need to pay a travel agent to book you flights and accommodation from Melbourne. You can do it more cheaply yourself so you may as well do so since you already know why you're going there, you already know how to get there and so on. You don't need advice.

If however you want to "see Great Britain" but have never been there and struggle to name even one place other than London, well then you've really got two options. Either you do your own research or alternatively you use a travel agent to tell you where to go and what to see. Either way, you need knowledge since you don't already have it.

Much the same with investing. If you know exactly what you want then simply buying it yourself via an online broker (eg CommSec is probably the best known but not the only one) is the cheapest way to do it.

If you don't know what you want however, well then your options are either to educate yourself via resources such as this forum or to hand the task to an advisor and have them do it for you. As a concept using an advisor is much like having a travel agent plan your holiday - it's outsourcing the decision making process to someone who knows more about it than you do.

Personal interest plays a part there. It's always far more difficult to become knowledgeable about something if you've no real interest in it. If someone just can't get excited about something, whatever, then they're going to struggle to stay focused and learn it. In contrast if it does interest you well then in my view you're better off at least gaining a thorough understanding of it even if you do still choose to use an advisor. With anything involving significant time and/or money, it's wise to have at least some understanding of what's going on.

There's also the option of doing both. There's nothing to say that you can't put, say, half or even 80% of the money in the hands of an advisor and manage the rest yourself or something like that. Doing so may reduce any stress aspects of the DIY approach, due to it only involving some of the money, until such time as you've got a proven track record and decide to manage more of it yourself.

Even for those who do manage it all themselves, you'll find many here won't have all their money invested in shares all the time. Some will, others will take an approach which involves holding some cash, gold, bonds etc and may adjust this from time to time - those with experience might adjust it quite dramatically on occasions such as those we've seen recently although I wouldn't recommend that a beginner starts with that approach.

So lots of options but the point is that you don't have to go all in one way or the other. It's not a situation like jumping out of a plane or being pregnant, it's not an all or nothing yes / no sort of choice, with investing you can certainly choose to put x% here and y% somewhere else.:2twocents
 
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