Good Evening,

I work and live independently with a lifestyle that isn't lavish but is perfectly comfortable for my needs. Recently, I was the beneficiary of a sum that is about 10 times the amount of my annual salary - truly a huge amount of money by my standards.

I've gone through the process and I have the money in my current account, but I have very little idea of what the best thing to do with my money is. Normally I would go to my bank, but I am conscious that their response might be slightly biased towards their services. The same of which can be said for property investment companies and financial advice services.

Where can I go to explore my options in a way that is purely for my benefit alone?

  • Could you add a little helpful context such as: do you need any of this money short, medium or long term? What goals would you like it to help you achieve? If you don't have any use for it for now, how long might that remain the case? Are you looking to grow it, sow it (e.g. gifts or endowments) or just keep it broadly safe in line with inflation? Would you be fearful of losing any or are you willing to expose it to some investment risks in pursuit of reward? – marktristan Aug 14 '19 at 17:06
  • @marktristan These are all issues that I have never had reason to think about.. I don't know what is "best", would it be worth the investment risk? What do those risks entail vs the probability and scope of reward? Any commercial wing I ask is likely to say their service is the best, akin to personal bias an individual might have. As of right now, I don't need the money so putting it away somewhere is probably the avenue I'm going to take. – James Aug 15 '19 at 8:58
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    @James - Any time that I have decided to buy specific insurance (life, LTCI, disability), my process was to meet with agent A and get his best recommendation. Learn a little. Meet with agent B and ask him what he thinks of a policy you found on the internet (agent A's recommendation) and what does he offer that's better. Continue the process with C, D, etc. Two things occur. One, these meetings help you to understand the product and secondly, one agent's recommendation eventually stands out. Buy his. Financial markets aren't quite that easy but you get the idea. Learn about them. – Bob Baerker Aug 15 '19 at 12:46

You need an Independent Financial Advisor (IFA). Instead of being paid by commission, and therefore biassed towards recommending products that pay them better, you need one who is paid a flat fee for their service by you.

The Government's "Money Advice Service" has a guide to how to choose a financial advisor including links to suitable resources; while I would recommend reading the whole article, in your case the right link to follow would be to the Personal Finance Society where you can type in your postcode and the type of advice you are looking for and get a list of regulated advisors in your area.

It would also be worth you reading this page, also from the Money Advice Service, on what questions to ask a financial advisor. Again, more details on the page, but in summary:

Q1: What do you charge and how much am I likely to pay?
Q2: What services do you offer? Are you independent?
Q3: If you’re not independent, can you look at products from across the market?
Q4: Do you have qualifications that are above the minimum you’re required to take?
Q5: Do you have many clients who are in a similar position to me?
Q6: Will you give me ongoing advice and what will this cost?

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  • Note that commission-based IFAs no longer exist in the UK. – Martin Bonner supports Monica Aug 15 '19 at 15:08
  • Unfortunately, even with an IFA you really need to read all of the paperwork that they ask you to sign, and decide whether the investment they are recommending to you is really in your best interests. Watch out for investments that you can't get out of, with regular ongoing fees. – Simon B Aug 15 '19 at 22:35

As noted, your bank, property investment companies and financial advice services all have an agenda. You will never know who has your best financial interests at heart unless you begin the road to financial literacy. Until then, many things will sound good but you won't know if they are. If they offer free consultation(s), take the first step and meet with them. Just don't sign anything until the day comes that you understand the financial products that they recommend as well as what the alternatives are.

For the time being, I'd put the money in a high yield money market account and/or a laddered CD. Don't be in a rush to lose your money :->)

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    Money market accounts and laddered CDs aren't really standard retail concepts in the UK – GS - Apologise to Monica Aug 14 '19 at 16:51
  • Sorry, missed the tag. Is there some other similar cash equivalent available in the UK where cash can be parked? – Bob Baerker Aug 14 '19 at 17:09
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    (The tag wasn't there before I added it, but it was in the subject.) Bank savings account, basically - either instant access or term-based. – GS - Apologise to Monica Aug 14 '19 at 18:26
  • -1. You know someone has your best interests at heart when you are paying them for the advice (i.e. they are not being paid on commission or by your bank etc.) – Vicky Aug 15 '19 at 11:40
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    @Vicky I wish! People paid for their advice alone have little to no skin in the game, and thus if you lose money or make less than you could have they pay no penalty. Knowing someone isn't trying to steer you into an investment vehicle for personal profit doesn't mean the advice isn't steered towards generating more fees for themselves (regular meetings), or that they don't have a back-end arrangement, or that their goal isn't just to look clever and nice while giving pleasant-but-foolish advice. To say nothing of competency - road to hell being paved with good intentions, and all that. – BrianH Aug 15 '19 at 12:37

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