Invest £100k
As bonus season is fast approaching, thought it would be great to start a thread on what are good ways in the UK to invest a lump sum.
What are the good platforms, portfolio mix, anyone using wealth advisors, especially in context of medium term investing (assuming many of the associates / senior associates / young VPs will aim to buy property / settle at some point) etc etc
Curious to just hear your thoughts and see what everyone has been doing given the limited time we have in our job to actively manage a portfolio / do all the extra work associated with it
Based on the most helpful WSO content, here are some insights on investing a lump sum of £100k in the UK, especially for medium-term investing:
Good Platforms:
Portfolio Mix:
Wealth Advisors:
Considerations for Medium-Term Investing:
Additional Tips:
These insights should help you make informed decisions about investing your bonus in the UK.
Sources: Calling all Financial Advisors: What products do high net-worth people use to manage their wealth?, Q&A: Equity Analyst at a Sovereign Wealth/Pension Fund, Should I make the move to a multi-manager platform?, Best Roth IRA Platforms?, How PWM really works (part 1): past, present, future, and $$$
Without being funny, it depends on you and what you want. If your mother is sick and might need cash ASAP and you're also engaged and you both want babies ASAP it's different than if you want to be a bachelor(ette) and you come from a healthy family who also just won euromillions, but....
1) I use Hargreaves Lansdown. No particular reason so I'm not recommending it, but I'm familiar with the interface, fees are fairly competitive (but it's not like I do a monthly benchmarking), and it isn't like I'm trading every day. You shouldn't be either - find a handful of funds (I assume you can't buy single equities like most of us) and sit back. Assuming you're young and don't forsee cash needs it's typically equity-heavy
2) Max out your ISA. That should be obvious
3) Consider over-contributing to your pension. Not very sexy and totally inappropriate if you need that cash in the near future, but the tax benefits are enormous
4) I do use a wealth advisor. Again I'm not necessarily recommending that you do because they usually require you to put money away with them in a fund with high fees, but was so pitifully uneducated about money (ironically) that it helped me understand tax savings, pensions, etc. I saw it as paying for advice (which is also literally my job in IB)
5) I'm not sure your tax band but mine is 45% marginal rate, so I have zero tax-free allowance for savings. So for cash I need in the near-term or want as a safety fund not succeptible to market volatility, I actually maxed out the £50k allowance for Premium Bonds. Very old school, I know, but the cash is readily available and earns 4.40% interest. That's fine, but it's entirely untaxable, whereas any other interest is subject to 45% tax. It won't make me the £10m house, but it's not bad for a safety fund
That's some thoughts off-hand!
Very helpful, thanks. I just moved to the UK. Does it make much difference who you set up your ISA with? And do you plough it all into the S&P?
It doesn't really matter in most regards which ISA provider you use. There's an absolute cap on the amount you can invest in an ISA in any one year so keep that in mind. An ISA is basically a tax wrapper, and I usually just use the same broker as I use for my normal investing.
Personally I mix between 3 low cost funds which focus on (A) Broad market (I.e. S&P), (B) Emerging markets, and (C) Tech. This is because my Stocks and Shares ISA is my long term investing account so I tend to have it weighted towards higher risk and return, but of course tailor for your own preferences.
Some great points here - would add a couple of extra things to think about:
Thank you this is so helpful! Would you mind telling us a bit more about contributing more to your retirement? Would it be out of gross pay (was like this in my previous country) and would you have to do it with the provider that your company uses?
As an investment analyst across asset classes at a BB, I’d simply buy the market and sell puts + some tactical preferences (few single stock picks + tactical sectorial allocation). Platform: Interactive Brokers
S&P500, if I was in the US I would probably go for a 2x levered 60:40 portfolio.
I just go all in Nasdaq 100 or S&P 500 Technology Sector ETF. More volatility but you should be able to deal with it and not check it daily.
I think it was Tom Lee who said the S&P 500 will eventually reach 50% tech exposure, which I basically agree with. Also justifiable on a risk perspective if you work in finance to minimise your exposure to financial institutions’s equities (as they’ll be highly correlated to your job).
Any views on putting it down for a flat?
High-Risk, High-Yield Emerging Markets Infrastructure Fund
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