Innappropriate Investments

darkpool · 20 December 2011 at 4:54PM

dunstonh wrote: »

Why doesnt a plumber fix your boiler?

why call yourself an independent financial advisor if you can only advse on financial products from fund managers? the name implies you can advise on all financial matters.

dunstonh · 20 December 2011 at 5:38PM

you suggest that people understand unit trusts/ structured products/ investment bonds etc, yet they can't undertstand buying a house to rent it out?

Given the work required by the individual on a buy to let and the increased risk if it is a mortgaged buy to let, then yes.

i'll put it another way, if someone went into your office and said "why did you sell me unit trusts 10 years ago? i now realise there is a lot of evidence that trackers outperform the relevant UT. perhaps the existence of trail commission influenced your advice?" what would you say to that?

I used unit trusts as I gave advice within my permissions and authorisations rather than recommend unregulated schemes outside my remit and with no consumer protection. Again, why are you mixing up investment types?

why call yourself an independent financial advisor if you can only advse on financial products from fund managers? the name implies you can advise on all financial matters.

Who would have thought that a financial adviser can only give advice on financial products. Next you will be saying that we have to advice on the weekly food shop as that involves spending money.

jem16 · 20 December 2011 at 8:51PM

darkpool wrote: »

ok then, why do IFAs push unit trusts when there is fairly solid academic evidence that trackers outperform them?*

Could you explain the difference between a tracker and a unit trust?

darkpool wrote: »

but IFAs don't recommend some financial products.... they don't advise on direct shareholdings/ investment trusts/ property/ land/ tangible assets. I'd also suggest they don't recommend bank accounts or national savings. Generally the recommend things where there is more commission.

This IFA didn't push any product but gave sound sensible advice.

http://forums.moneysavingexpert.com/showpost.php?p=49505115&postcount=37

fairleads · 20 December 2011 at 9:31PM

jem16 wrote: »

This IFA didn't push any product but gave sound sensible advice.

http://forums.moneysavingexpert.com/showpost.php?p=49505115&postcount=37

Reminds me of that joke, the one that goes something like this -the wife gives me sound advice, 99% sound and 1% advice.

Meeper · 21 December 2011 at 9:38AM

darkpool wrote: »

if someone went into your office and said "why did you sell me unit trusts 10 years ago? i now realise there is a lot of evidence that trackers outperform the relevant UT. perhaps the existence of trail commission influenced your advice?" what would you say to that?

I would say that you don't know what you are saying. As jem16 has asked - please can you explain the difference between a Unit Trust and a Tracker, as you obviously have no comprehension of what the differences are.

Please, allow me to illustrate.

A unit trust (randomly selected):
http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=QAF58&univ=O

A tracker (randomly selected):
http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=MYJET3&univ=P

The top one (labelled Unit Trust) is an Active Managed unit trust. The bottom one (labelled Tracker) is a Tracker (or Passively Managed) unit trust.

So - you want us to sell trackers, but you don't want us to sell unit trusts. Yet.......trackers are wrapped up in a unit trust structure. You clearly have shown, time and time again that you lack the knowledge to back up your arguments and the substance is sadly missing. You don't like unit trusts, yet you like trackers. Do you therefore have a love/hate relationship with tracker unit trusts? :T

darkpool · 21 December 2011 at 2:30PM

dunstonh wrote: »

Given the work required by the individual on a buy to let and the increased risk if it is a mortgaged buy to let, then yes.

I used unit trusts as I gave advice within my permissions and authorisations rather than recommend unregulated schemes outside my remit and with no consumer protection. Again, why are you mixing up investment types?

Who would have thought that a financial adviser can only give advice on financial products. Next you will be saying that we have to advice on the weekly food shop as that involves spending money.

I just object to the term Independent Financial Adviser, the name implies impartial financial advice. However the truth is that IFAs sell a fairly narrow range of investments.

However I suppose you have to expect misleading terms from the financial industry. what other industry would have a term like total expense ratio, when it only covers some of the expenses....

If you went to a doctor and he advised a certain medication and you found out the medication prescribed was less effective and cost more than a competing medication you would be very annoyed. You would be further annoyed further if you then found out the drugs company was offering a kickback to the doctor for recomending their products. You would question the doctors judegment in every further matter.

Yet that's effectively what happens in the IFA industry....

darkpool · 21 December 2011 at 2:32PM

jem16 wrote: »

Could you explain the difference between a tracker and a unit trust?

perhaps it would be best if you had a look at wikipedia?

Meeper · 21 December 2011 at 2:39PM

darkpool wrote: »

perhaps it would be best if you had a look at wikipedia?

So you don't know? Would you care to comment on my previous post that showed an actively managed and a passively managed (tracker) unit trust?

A unit trust is the structure. The underlying investment is the substance, and the index tracking or active management is the style employed by the fund manager. Both can fit within a unit trust, so if you want to look at trackers, I can tell you that the portfolio I recommended to a client yesterday has the following:

7 OEICs - 6 active managed and 1 tracker
8 Unit Trusts - 1 active managed, 6 trackers and 1 cash fund

So, I have tracker unit trusts in my investment portfolio for the client. This is what you have been asking for, so you must be pleased with this approach, no?

darkpool · 21 December 2011 at 2:40PM

Meeper wrote: »

So - you want us to sell trackers, but you don't want us to sell unit trusts. Yet.......trackers are wrapped up in a unit trust structure. You clearly have shown, time and time again that you lack the knowledge to back up your arguments and the substance is sadly missing. You don't like unit trusts, yet you like trackers. Do you therefore have a love/hate relationship with tracker unit trusts? :T

congratulations on sidestepping a rather difficult question for an IFA. You really are a credit to the fund management industry.

what i really want is for the IFA industry to put the interests of their clients ahead of their own interests. ok, i'll admit it's a bit of a pipe dream, but we all have to dream.

of course, an IFA will respond to this saying he can only sell products that he has a remit to sell, but how come IFAs always seem to be only authorised to sell things that generate commission?

I've said before that long term stockmarket growth is likely to be 5%, yet IFAs sell products that charge 3% a year in fees. ie leaving circa 2% for the investor. So the fund management industry makes more from the investors money than the client

darkpool · 21 December 2011 at 2:46PM

Meeper wrote: »

So you don't know? Would you care to comment on my previous post that showed an actively managed and a passively managed (tracker) unit trust?

changing the subject slightly. how come so many IFAs post here? No other profession seems to feel the need to come on MSE and champion their profession.

Innappropriate Investments

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