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A new financial advisor

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  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    edited 29 September 2009 at 10:55PM
    whiteflag wrote: »
    So what was the point of your £25 pm post and the big grin?

    Mainly because you know I'm right.
    Your question re qualifications & picking funds - would none surprise you?
    How about yes?

    ----

    Also a side note. When you agree X fee per month, can the planner then change it without notice or is this not allowed?

    ---- after edit
    jem16 wrote: »
    OK. So I pay the CFP a fee to plan for me and then pay the multi-manager another fee to pick the funds.?

    Surely this add to costs and should be avoided?

    I am going to bed now as I have a long day tomorrow urgh. I look forward to reading the replies tomorrow.
  • whiteflag_3
    whiteflag_3 Posts: 1,395 Forumite
    jem16 wrote: »
    OK. So I pay the CFP a fee to plan for me and then pay the multi-manager another fee to pick the funds.?

    thats a good point. The charges on the multi-manager range that we use are around 0.2% to 0.35% higher than a standard fund of 1.5%.

    We think thats worth paying for the due diligence, risk management, asset allocation, stochastic modelling, rebalancing, manager visits etc etc. I know of IFAs who are taking 0.5% up to 1% extra per annum for doing what is effectively just annual rebalancing.
  • smartpicture
    smartpicture Posts: 888 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    I don't understand this. If the IFA recommends, say, Standard Life for a pension, and I say OK, what's supposed to happen next if he refuses to tell me what funds to put it in? Do I just pick up a pin? Do I spend a couple of months I haven't got studying financial investments so I know which ones are right for me - given that that's what I thought I was paying the IFA for, his financial expertise? What is a multi-manager, and where do I find one, and how is the average consumer supposed to even know he needs one? Any why is it all so complicated??!

    Some background: I'm self-employed, pay £480pm into an on-going pension, and have 3 other personal pensions I no longer pay into, some with-profits. I have a low-medium risk profile. Every couple of years I pay in a lump sum of maybe £10-20k. All I want the IFA to do is meet with once every 2 years, tell me where to put my lump sum, tell me the best ISA to use, and review what I've got and tell me if I should be moving it around.
  • whiteflag_3
    whiteflag_3 Posts: 1,395 Forumite
    edited 29 September 2009 at 11:18PM
    smartpicture wrote: »
    I don't understand this. If the IFA recommends, say, Standard Life for a pension, and I say OK, what's supposed to happen next if he refuses to tell me what funds to put it in? Do I just pick up a pin? Do I spend a couple of months I haven't got studying financial investments so I know which ones are right for me - given that that's what I thought I was paying the IFA for, his financial expertise? What is a multi-manager, and where do I find one, and how is the average consumer supposed to even know he needs one? Any why is it all so complicated??!

    Some background: I'm self-employed, pay £480pm into an on-going pension, and have 3 other personal pensions I no longer pay into, some with-profits. I have a low-medium risk profile. Every couple of years I pay in a lump sum of maybe £10-20k. All I want the IFA to do is meet with once every 2 years, tell me where to put my lump sum, tell me the best ISA to use, and review what I've got and tell me if I should be moving it around.

    I think your CFP could answer all your queries.

    What some IFAs/CFPs/Advisers are trying to do is get a steady income stream rather not knowing where next months pay is coming from. So a retainer is just a way of spreading the costs for the client hile helping the advisers cashflow.
  • jem16
    jem16 Posts: 19,594 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    whiteflag wrote: »
    thats a good point. The charges on the multi-manager range that we use are around 0.2% to 0.35% higher than a standard fund of 1.5%.

    So if you do my plan and it shows I should make ISA provision of £300pm to attain my retrirement goals, you will then allocate funds from your multi-manager range of funds - is that correct? If so the amc will be around 1.7% to 1.85%?

    So I would be paying roughly 1.8% amc plus whatever your monthly fee is? What is the monthly fee again?
    I know of IFAs who are taking 0.5% up to 1% extra per annum for doing what is effectively just annual rebalancing.

    Do you mean 0.5% to 1% on top of the 1.5% of the standard fund so 2% to 2.5%?
  • EdInvestor
    EdInvestor Posts: 15,749 Forumite
    smartpicture wrote: »
    Does anyone else think it was unethical to tout for my business for his new firm whilst still being paid by his old employer, or was he just being entrepreneurial?

    There is nothing more irritating than discovering that a practitioner you have used for years (eg a hairdresser) has moved to a new job, failed to let you know and the old salon will not tell you where s/he is now.Not unethical to say IMHO, just helpful info, your choice if you want to move.

    The area where most people want help from a professional is choosing investment funds, it astonishes me that some IFAs or planners are saying that's not their job. The rest is all admin, anyone can do it, requires little expertise, just time.

    The discount brokers must be laughing like drains.
    Trying to keep it simple...;)
  • whiteflag_3
    whiteflag_3 Posts: 1,395 Forumite
    jem16 wrote: »
    So if you do my plan and it shows I should make ISA provision of £300pm to attain my retrirement goals, you will then allocate funds from your multi-manager range of funds - is that correct? If so the amc will be around 1.7% to 1.85%?

    Yes thats correct
    So I would be paying roughly 1.8% amc plus whatever your monthly fee is? What is the monthly fee again?

    Its excellent value for money.
    Do you mean 0.5% to 1% on top of the 1.5% of the standard fund so 2% to 2.5%?[/

    yes - in fact I have recently seen an IFA down your neck of the woods that takes 2% on the fund switches as well.
  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    whiteflag wrote: »
    Its excellent value for money.

    What is the average cost for a CFP? As you said you see £550pm in places and that £50 is cheap.... Google just gives me USA crap.
  • fg22
    fg22 Posts: 67 Forumite
    Surely investments should be personalised for each person - I don't see how this can be done if they all are just bunged into one (of a range of) multi-manager funds.

    For example; for some people it may be better to place their corporate bonds inside an ISA rather than their equity investments due to their tax advantages. When the corporate bonds are a component of a multi-manager fund there is no way to do this.

    If IFA's aren't qualified to pick fund managers what makes them qualified to pick fund of fund managers? I guess you could say that IFA's don't have the expertise to make dynamic asset allocation decisions whereas fund of fund managers may do. However, I feel that if the asset allocation is to be changed based on economic conditions then this should only be done with the objectives of the individual investor in mind.
  • whiteflag_3
    whiteflag_3 Posts: 1,395 Forumite
    fg22 wrote: »
    Surely investments should be personalised for each person - I don't see how this can be done if they all are just bunged into one (of a range of) multi-manager funds.

    Fair point, so how just to clarify you are saying that someone age 40 with a balanced attitude to risk retiring age 65, would have a completely different portfolio to a 45 year old with the same risk profile and retirement date?

    For example; for some people it may be better to place their corporate bonds inside an ISA rather than their equity investments due to their tax advantages. When the corporate bonds are a component of a multi-manager fund there is no way to do this
    .

    Possibly but its not something I come across very often.
    If IFA's aren't qualified to pick fund managers what makes them qualified to pick fund of fund managers?

    Much smaller universe -but your right there is no official qualification .
    I guess you could say that IFA's don't have the expertise to make dynamic asset allocation decisions whereas fund of fund managers may do. However, I feel that if the asset allocation is to be changed based on economic conditions then this should only be done with the objectives of the individual investor in mind

    Nice idea in theory but there are not many IFAs who can do this in practice.

    Ps are you only talking about fund of funds or manager of managers as well , because as you know they are quite different.
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