Inexperienced saver - advice please

earlgrey_3

Yours is a sensible enough approach up to a point Lokolo. Some IFAs might be able to give you some guidance on the funds to choose and help you avoid the most obvious mistakes - but don't expect too much. They can look at past performance, as can you, but that is no reliable guide to future performance.

What you shouldn't necesssarily expect is unbiassed advice on when to invest for example or what in. If an advisor, whether tied or "independent" is reliant on commision from sales they tend to persuade clients that any time is a good time to invest. They may even quote their favourite old cliche: "It's not timing the market, it's time in the market that counts". That's nonsense.

Similarly different products pay different rates of commission. Don't expect any commission-based adviser to encourage you to move into cash when they will lose their annual kick-back from the product provider for keeping you invested. Ask around and find how many people were advised by a commission paid adviser to move into cash this year despite all the indications.

So advisers might be useful for some people provided they understand the limitations. There is legislation to curb the most blatant excesses that used to happen but that's about all it can do. At the very least investors need to know enough about investment and how advisers get paid to know whether an investment is suggested in the interests of the investor or of the adviser. Many people are just far too trusting of what too often are nothing more than convincing salesmen.

As said earlier, whether the OP has reason to be particularly aggrieved depends on the agreement with the adviser and the time period.

bjorn_again

Maggie,
I can only speak from my own experience with IFAs. Whichever way they choose to operate - fee or commission - they are in a win win situation. They use your money to virtually bet with. If they knew all the answers they would'nt need to be out there hustling.
I go with my gut. Had I taken my IFA's advice six months ago, he would now be making as much as, or more from my savings than I am.

bjorn_again

[. I know its a rubbish time to do it, but I'm sorely tempted to withdraw all the funds and just stick them all in a high interest bank account. If nothing, it'll stop them getting any more commission, which will please me immensely.[/quote]

I did just that and am very pleased that I did. If you really feel that way, go for it.:cool:

Blah99

Lokolo wrote: »

Although I do slightly agree with Blah there are some points to make. Those are only 2 sectors out of a lot, fair enough, really you won't know what is going to happen in the future.

I went for Global Growth since September, and have made a 30% loss, now I wasn't really expecting a gain at the current time. But thing is, I don't know if I am making good choices or bad choises.
<snip>
Yes I have tried to learn and somewhat have not found material about what these mean, which is why I then think, well I can go to an IFA and find out what I should invest in, and why.

I think you're looking in the wrong places. Without exaggeration, I could teach you the basics of proper investment techniques in a few hours (more or less, depending on how quick you pick up basics etc). Put in 2 hours a week and within 2 months I could show you the basic skills to "be your own IFA" in standard matters. Maybe if you articulate the problems and questions you're coming across I can give you some answers, or at least show you how to get the answers.

And no, I don't work in the financial sector, I've never had any formal instruction or training in investment etc. It's all self-taught, and there's no reason why you can't do the same.


And to the OP, it's almost as though you didn't read my last post at all. Never mind.

jem16

Blah99 wrote: »

The bad news is that an IFA will not do that unless you're a multimillionaire with a dedicated portfolio manager. All an IFA will do is have a couple of conversations with you to understand your risk attitude, then pick some funds (or whatever) to invest in. You'll give them your £20k (or whatever), and they'll slice it up as they feel is appropriate - £1k into a property fund, £2k into emerging markets fund, £5k into a growth fund etc etc etc (again, all just examples). Once they've put the money into the funds they'll pocket their commission and move on to one of their other thousand clients. Meanwhile your money sits in the funds, moving up and down along with the market, and giving the fund managers a nice commission also. That's it. You get nothing more.

If you go with a transactional IFA then what you have described above is probably exactly what will happen.

However if you go with a servicing IFA you can expect them to set up your portfolio and then to review it yearly, rebalancing it appropriately. Sometimes more often if necessary. And no you don't have to be a multimillionaire for this to happen - I'm not.

jem16

maggiesoup wrote: »

Hi all
I realise that the markets are at an all time low but a few years ago I gave about 75% of my savings to a financial advice company (well respected and recommended by my lawyers) however since then I've only been contacted by them 3 times (2 personal meetings & one letter) and since March this year not a word. They give my portfolio to a company called Transact and noticed that my stocks & shares have fallen by about 20% overall (14 out of 15 investments having gone down).

I assume from your previous posts that this was the investment you made around June 2005? If so having 2 personal meetings and one letter in that time seems about right as it would normally be a yearly review.

Investing is for a minimum of 5 years, preferably more. Were you told this at the time?

Lokolo

Blah99 wrote: »

I think you're looking in the wrong places. Without exaggeration, I could teach you the basics of proper investment techniques in a few hours (more or less, depending on how quick you pick up basics etc). Put in 2 hours a week and within 2 months I could show you the basic skills to "be your own IFA" in standard matters. Maybe if you articulate the problems and questions you're coming across I can give you some answers, or at least show you how to get the answers.

And no, I don't work in the financial sector, I've never had any formal instruction or training in investment etc. It's all self-taught, and there's no reason why you can't do the same.


And to the OP, it's almost as though you didn't read my last post at all. Never mind.

By all means I am willing to learn and I am trying, obviously I have gone over things like Morningstar, Trustnet to try and understand, for example the Morningstar strategy box: Are you a value, blend, or growth investor? <-- I have no idea what value and blend means for example (my portfolio at the moment has a lot in growth, which I know is quite risky as you are banking on these areas to grow and not flunk).

Also like Equity - Large, Mid, Small. Now I know small is obviously going to be small companies, large is large but I don't know what sort of risks I would be taking in terms of return (obviously large companies less risk, and small ones risky dying).

I think if there was an investment or something, or a sticky which would explain things about investing (instead of fully seperate forums or something). I have found the discussion forums on fool.co.uk extremely confusing.

But yeh I do agree with you that if you can learn then you should do, then its upto you what you do. And I myself would prefer to learn but I am sure some people would rather leave it upto someone else (like an accountant)

jem16

Lokolo wrote: »

And I myself would prefer to learn but I am sure some people would rather leave it upto someone else (like an accountant)

I doubt an accountant would be the best person to go to for investments. If you need help investing see an investment IFA.

Lokolo

jem16 wrote: »

I doubt an accountant would be the best person to go to for investments. If you need help investing see an investment IFA.

lol sorry I didn't make it clear, I meant if someone wanted to sort out taxes etc. instead of doing it themselves they would go an accountant, just like someone who wanted a bettter place with their money would go to an IFA.

jem16

Lokolo wrote: »

lol sorry I didn't make it clear, I meant if someone wanted to sort out taxes etc. instead of doing it themselves they would go an accountant, just like someone who wanted a bettter place with their money would go to an IFA.

Glad you clarified that.