Meeting with my IFA and Wealth Manager

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  • BLB53
    BLB53 Posts: 1,583 Forumite
    If I go on my own i'm comfortable with understanding my own risk tolerance and i'm happy with structuring my own OEIC/IT/ETF portfolio to diversify and match that risk level.
    So why bother with advisers? Save their time and a whole heap of your investment returns and go DIY.
  • One last suggestion from me:

    Rather than think about this in long term future cost terms, even if only approximate, try to think about on a year by year basis, the key to that is understanding what your current costs are today, precisely.

    Now you've added some clarity by saying it's a group meeting, that's a horse of a different color, it sounds more like a group sell, think timeshares!
  • BLB53 wrote: »
    So why bother with advisers? Save their time and a whole heap of your investment returns and go DIY.

    Is the correct answer.
  • chiang_mai wrote: »
    Rather than think about this in long term future cost terms, even if only approximate, try to think about on a year by year basis, the key to that is understanding what your current costs are, precisely.

    Now you've added some clarity by saying it's a group meeting, that's a horse of a different color, it sounds more like a group sell, think timeshares!

    I've got a reasonable handle on the costs and tbh I think there is a danger in viewing those costs in annual isolation. Who cares about a percent here or there when your portfolio may have risen 10%. Cumulatively those costs do matter though and especially when you consider that you could be giving up half of your SWR in fees.

    I perhaps wasn't clear about the nature of the meeting...it isn't a group affair, i'm on my own. I just know many others who are in a similar position to me.

    And as much as i'm perhaps a 'difficult' customer I would never describe the IFA I work with in the same breath as a timeshare salesman!!! :eek::D
  • coyrls
    coyrls Posts: 2,423
    First Anniversary Name Dropper First Post
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    The meeting isn't really about me directly I suspect. I'm one of many (50+ or so) who know each other and are working with only a couple of IFA's.

    I don't understand what you mean by this. You know 50+ people with the same IFA and they are all unhappy with the fees? That seems unlikely. As others have said if you want to stay with them and the only problem is the size of the fees, go into the meeting with an idea of what level of fees you would accept and then see if you can negotiate to that figure, if you can't and you will still be unhappy with the fees, leave.
  • coyrls wrote: »
    I don't understand what you mean by this. You know 50+ people with the same IFA and they are all unhappy with the fees? That seems unlikely. As others have said if you want to stay with them and the only problem is the size of the fees, go into the meeting with an idea of what level of fees you would accept and then see if you can negotiate to that figure, if you can't and you will still be unhappy with the fees, leave.

    Not just unlikely - it's not true. The majority wouldn't dream of taking on the risk of managing their own funds.

    However, what I was getting at (in a poorly phrased way) was that if I was an IFA I would probably rather self-managing didn't catch on in even a small part of the group.

    A couple of approaches I was considering was maintaining the present fee structure but splitting the pot 50/50 between myself and the WM. My problem with this though is that both of us will be making decisions based on wrong information about my financial position.

    The other route was to try and negotiate them down to 1%.
  • Check out the fund charges calculator to see how much an IFA will cost over 40 years.
    http://www.thisismoney.co.uk/money/diyinvesting/article-1633426/Isa-fund-charges-calculator-How-fees-affect-returns.html
  • ''The 60% was a rough ballpark based on 40 years and 1.5%pa in fees''

    £100,000 invested for 40 years with a 7% return could theoretically generate £1.5 million. With an IFA taking 1.5% the return would be £821,000.
  • I've got a reasonable handle on the costs and tbh I think there is a danger in viewing those costs in annual isolation. Who cares about a percent here or there when your portfolio may have risen 10%. Cumulatively those costs do matter though and especially when you consider that you could be giving up half of your SWR in fees.

    The cumulative drag on your money during accumulation is not immediately obvious, but it's huge over time. In drawdown it can be more directly seen. If you have a drawdown of 4% and 2% fees your spending will be significantly less than 4% as the fees are 50% of your initial drawdown and they need to be paid out of that 4%.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • chiang_mai
    chiang_mai Posts: 156
    First Anniversary First Post Combo Breaker
    Forumite
    edited 14 September 2017 at 1:21PM
    davieg11 wrote: »
    ''The 60% was a rough ballpark based on 40 years and 1.5%pa in fees''

    £100,000 invested for 40 years with a 7% return could theoretically generate £1.5 million. With an IFA taking 1.5% the return would be £821,000.

    Is that £821,000 in todays Pounds or future Pounds!

    Wow...! There is no contract with any IFA, it's something you can agree to and switch off when ever you want, why are you even considering costing IFA services over 40 years as part of your decision making process!
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