IFAs: the ones to avoid

EdInvestor

Useful article on how to go about selecting a good financial advisor.

Lokolo

Hm I can see the name dunstonh on there.... (lol )

dunstonh

It basically mirrors what we have said here in the past many times. A few of those remarks in the article are pushing it a bit though. For example, many solicitors and accountants have a link to certain firms. However, that doesnt make the advisers any better. Indeed, there is one major regional accounts firm that has an in-house adviser salesforce who are fee based but targeted to earn fee amounts to justify their pay. They are expensive and have a heavy turnover in staff.

whiteflag_3

Interesting that the article is part penned by a so called "new model adviser" whose own firm charges "fees" rather than commission and takes trail commission on an annual basis. Ive met some of these so called "new model advisers", yet none of them can explain why if someone invests with them they take a "fee" of say 2% of the amount invested , yet a commission based adviser taking 2% commission is regarded by them as some sort of maverick!

Towry Law ( apparently the UKs biggest fee based "adviser") for example bang on about being fee only, yet they charge a 1% annual fee. If they take money based on a percentage of the investment rather than a charge in relation to the work being done, its a commission not a fee. Someone with £400K invested pays £4000 a year yet gets the same service as someone with £100k invested paying a "fee" of £1000 per annum. Hows that treating customers fairly?

The article is also really poor in that the people writing it dont seem to know the difference between a financial planner and an adviser/investment manager. They jump from one to the other.

All these NMA's bang on about financial planning yet their websites only talk about their robust investment process. What use is it for the client in having the right vehicle , without knowing a) where they are and b) where they are meant to be going?

True finanacial planners dont get involved with investment management - you cant do both - investment management is a full time job on its own.

Its not how (or how much) the adviser is getting paid, its what service the client is getting for their money that is the most important. Frankly there is no evidence that most so called fee based advisers are any better than commissioned based advisers in this regard.

EdInvestor

dunstonh wrote: »

A few of those remarks in the article are pushing it a bit though. For example, many solicitors and accountants have a link to certain firms. However, that doesnt make the advisers any better. Indeed, there is one major regional accounts firm that has an in-house adviser salesforce who are fee based but targeted to earn fee amounts to justify their pay. They are expensive and have a heavy turnover in staff.

And that's exactly what the article says, too.

....ask your solicitor or accountants if they can recommend one. If so is there any financial link between them? Ideally the answer is no, it's purely because the financial planner is good.

whiteflag_3

....ask your solicitor or accountants if they can recommend one. If so is there any financial link between them? Ideally the answer is no, it's purely because the financial planner is good.

no financial link but they are school chums, members of the same golf club etc etc . No guarantee the planner is good.

ps is that planner or advisor?

purch

The one sentence version: Avoid advisers who you don’t trust.

:rotfl: :T :rotfl:

That is a very helpful piece of advice..............Thank you Citywire for your indepth research :T

whiteflag_3

purch wrote: »

The one sentence version: Avoid advisers who you don’t trust.

:rotfl: :T :rotfl:

That is a very helpful piece of advice..............Thank you Citywire for your indepth research :T

Yes its a handy piece of work from Citywire. Even though im a financial planner, I myself can apply the theory to solicitors, accountants, double glazing salesman , car salesman, plummers, tradesman in general, people from the city that run websites ,etc etc.
They have hit on a theory that is universal, its brilliant! Bravo Citywire:j :j :j :j :j