IFA Fees - benchmarks

Rollinghome wrote: »

Yes, I would be be amazed if he said it too, which was why I hope I made clear my scepticism. The statement itself though is true enough.

Competent investment that gives results as good or better than enjoyed by the average investor isn't difficult, it's easy, and neither does it require numeracy beyond school level. That's not to say there won't always be people who can mess up the easiest things. In investment it tends to be people who have ambition beyond their competence.

It's tempting to think some of us have some special abilities that others can't possess but I don't really think that the mystification of something that really can be achieved with quite simple techniques is particularly helpful.

it's also not very helpful to ignore reality which is that most people tend to think in the short term, and panic during crashes. I've met plenty of people who dabbled in the stock market and had their fingers burnt. I suspect most people could invest wisely, but it requires first learning the basics, which means reading, and understanding. I can think of plenty of supposedly intelligent people who screw up financially, due to an emotional temperament, and an unwillingness to learn.

Rollinghome wrote: »

I haven't notice anyone here suggesting "dabbling" in stock-markets. Quite the reverse. You seem to be confusing the concept of something being simple and easy to achieve when done in a sensible way with something that's impossible for some people to mess up. The two aren't the same. Wiring a plug is easy enough but some people will still manage to get it wrong. Simple but sound investing does not need to be esoteric and I'm surprised if you expect reading to transform "an emotional temperament". If you think otherwise then it's just possible you've been reading the wrong books.

I don't understand the points you are making, including the last sentence. I have met plenty of degree educated people who do not get to grips with stock market investing. You say "Simple but sound investing does not need to be esoteric" and I agree. However, what I have seen is that an awful lot of people, many supposedly well educated, struggle with concepts many of us find 'simple'. A common mistake is to panic and crystallise losses. Lots of people have issues with risk, and volatility. There is a difference between abstractions, and reality. That is why IFAs determine the client's risk profile at the outset.

I happen to find investing simple, I've done well (could have done better but when I started out the available tools were limited), but I've seen friends do not so well. That is why I have softened by attitude to IFAs. Whilst some of us do better without them, some people do benefit from their (overpriced) services.