Streamlining Investments: The Power of LISPs and Smart Retirement Strategies

So currently I have a small portion invested in EasyEquities RA account and our company have a group RA scheme with Alan Gray , so I have access to the Alan Gray platform but find the range of unit trust to be limiting in the sense that it's more or less the same underlying investments .

So yeah , are there any list platforms available for retail investors to have a broader range of investments to choose from , For example , ETFs , bonds , hedge funds and single stocks , obviously within the limitation of REG 28 .

And just some background I'm a young professional that enjoys investing and researching various investments and would like the flexibility to structure my own RA account .

That's a kind of a product and what it is is a place that's kind of a wholesaler for unit trusts and other investments . So you go to one company and you're able to buy a bunch of different unit trusts or index trackers from a range of other investment managers , but you can get it all at one place , all at one wholesaler .

So the benefit of that , of course , is that you don't end up with five accounts at five different companies . You've got one account at one company and then you're able to choose a range of funds to suit your requirements , your objectives . So the downside of this , of course , is that this isn't a charity .

Elispa is not a charity , it's a business and they're going to charge you an administration fee for using their kind of wholesaler . And I would say that the first thing to note about these LISPs is that they are mostly advisor driven . In other words , they're not really . They weren't designed in the beginning to deal with direct investors .

They were really there to deal with financial planners who were looking to kind of streamline their businesses and make reporting for clients easier and managing the underlying investments on a more consolidated basis . So there aren't a lot of LISPs out there that are very efficient at dealing with direct clients .

So I mean , the important point here is that this is honest money and you know it's not really our purpose to kind of trash financial services companies or to promote them . You know our job is to kind of educate you and help you make smart decisions .

So it's very rare that I'm going to give you kind of a list of names of good companies that you can use or , equally , a list of bad companies that you should avoid . What I'd rather do is give you the principles and you can do your homework and hopefully find what works for you .

So I think , just to start , my experience is that the investment companies these are fund managers , companies that started maybe as a unit trust company rather than an insurance company .

The investment companies tend to offer more modern , more up-to-date platforms and some of them are able and are actually good at dealing with direct investors that you don't have to go through an advisor .

My experience of the insurance kind of companies is that you know they started to offer unit trusts almost grudgingly and then they started to offer the LISP , also almost grudgingly , and so you know they've tended to focus on advisors and , whether they're independent advisors or agents of the insurance company , they've focused on advisor business more so than direct

business . Insurance company . They've focused on advisor business more so than direct business , so as a retail investor trying to pick up the phone and deal with them directly or get through to someone on an email and actually get help when you need it . My experience is that's much harder from an insurance company than it is from an investment company .

So just be careful that you don't get stuck in a rabbit hole where you're now dealing with an insurance company LISP and you're hoping that everything will go fine and when the wheels fall off because mistakes happen , you can't get any help .

So maybe focus more on the investment companies when you're looking for a LISP and not so much on the insurance companies , so much on the insurance companies . Having said that , the unit trust companies I know you mentioned Alan Gray as an example they have a LISP and they've got quite a big range of unit trusts on their LISP .

So it's not just Alan Gray Funds or their offshore kind of sister company called Orbis . They've got funds from a bunch of different fund managers on there and included in those funds are index trackers .

So as a direct investor you've got a significant range of funds that you can choose from , but you won't be able to go and buy individual shares , for example , or you won't be able to go and buy a listed exchange traded fund . You won't be able to go and buy a listed exchange traded fund .

The reason for that is that the Alan Gray LISP was built as a unit trust platform . It wasn't built to accommodate every kind of investment out there , and I think that that's the important distinction here is you are when you're dealing with a LISP .

There are some LISPs that have kind of bolted on a stockbroking solution as well , but my experience of those is that they don't tend to be cheap and their admin tends to be not good . I can't use bad language , I'm just going to say not good . And so I think that you know , adrian , I'm guessing you're kind of reading between the lines .

I'm nudging you to say you know , if you want a range of different unit trusts , including unit trusts that track an index , then you will find a list that will work for you .

But gee , if you want to be able to buy individual shares and hedge funds and you know listed companies and listed ETFs in combination with unit trusts , I think you might struggle to find one at a reasonable price . With good service you will be able to find one , but when you're looking for help on an admin side , I think you're going to struggle .

So I would kind of encourage you to stick to the unit trust-based ones first . Your alternative , as you've looked at , is obviously a place like Easy Equities , and they've got a range of investments . I haven't got experience .

I haven't really personal experience of what their kind of RA offering is like and definitely had no feedback from our listeners about good or bad . So I'm going to have to kind of plead neutral there and say I don't know . I think you must just check your fees , make sure that the costs are reasonable .

There are some index tracker LISPs out there as well that only offer index tracking solutions , and then you've got a range of other LISPs that are built almost directly for the company itself . So you'll have a fund manager and they'll build a LISP and then you know you can choose only their funds .

And that might not suit your requirements , adrian , but my view is I would focus on investment companies and then look at their underlying range of funds and see that you know you can get what you want . But you know , just test the admin . First , pick up the phone to the call center .

Check that when someone answers the phone they know what they're talking about and they can give you some guidance and assistance . Most call centers can't give you any investment advice . They're not qualified or authorized to give investment advice .

But what you want to find out is ask them a process question , ask them an admin question and just make sure that you're getting , you know , comfort from the call center , because that's what you're paying for . You're paying for the admin .

So , adrian , I'm sorry that you're not probably getting the answer that you're looking for , but I wouldn't focus on too much kind of exotic or specific stuff in my RA .

I think if I were , you make your RA as low cost and as efficient as possible and then use your other investments , use your discretionary money , your money that you can add to or withdraw at any time without worrying about Regulation 28 or retirement fund restrictions . Use that to buy your individual shares or your individual exchange-traded funds .

If you want to buy more exotic stuff , so look at your investments as a portfolio , not as little boxes where your RA has to fulfill every function , as little boxes where your RA has to fulfill every function . Your RA is really there for the next 20 to 50 years and that shouldn't be the thing that you're trying .

The exotic stuff the exotic stuff should be elsewhere , and if you've listened to Honest Money long enough , you'll know that I'm not convinced that exotic stuff will work for your long-term good . I think the most boring stuff that's sort of generic equity portfolio , local and global will probably be the best engine of growth over the next few decades .

The other stuff is exciting and it gives you something to talk about , but probably might not make you as much money as you think . And having said all of that , don't forget that you've also got your tax-free savings account that you can use to complement your RA .

So I think try and go for a blended approach if you want to do very specific things , but be pretty generic on your RA and use the Reg 28 to help you . To help you and for our listeners , regulation 28 are the regulations that decide how much of your portfolio you can put into cash , bonds , property and shares within your retirement funds .

For most of us , we'll choose a balanced fund and that will comply with Regulation 28 . And we don't need to worry about much more , because Regulation 28 allows you to invest 45% of a fund offshore , and so your global and local exposure is taken care of . Balanced funds tend to have a very high allocation to the stock markets , and that's good for you .

So I think for most of us we don't need much more than one or maybe two balanced funds in a retirement fund .

But if you like , adrian , and you want to add some kind of your own flavor to that , then maybe do that outside of your retirement funds and let your retirement fund be the kind of the banker part of your portfolio , the thing that plods along and gives you consistent long-term growth , and in 10 years' time , when I'm much greater than I am now , you can kind

of check in with us again and tell us how it went . I hope that helps , adrian . Thanks so much for your question .

So 10X your future without the drama . 10x is a licensed FSP .