Investment Advice

Lokolo

Aegis wrote: »

Dunston wouldn't let me loose on his clients. He knows better!

Besides, right now HSBC takes the blame for any "learning errors" I might make

Yeh thats fair enough. Have you got a Visa card yet? I want to see what they look like

dunstonh

Dunston wouldn't let me loose on his clients. He knows better!

Actually you are right and you referred to it in post #8 as well as #11. I wont consider employing an IFA without a track history. Partly as the liability is too much and partly as I wont take on an adviser with a track record earning under £100k a year as its not really cost effective.

Getting the exams gets you authorised but the real knowledge comes from experience and implementation of that knowledge in the real world. New advisers makes mistakes and its better that the mistakes are made on bank customers who wouldnt know any different and with no liability to the adviser. IFAs are typically small firms (most are) and are personally liable for the advice they give.

From 2010 new advisers to the industry will be required to have a higher qualification level before they can advise. Existing advisers have until 2012 to get to that level. It was busy on the phones today with a few current advisers basically sh*ting themselves as they know they are not going to pass the exams. It seems a popular consideration for them is to drop adviser status and become mortgage advisers and introducers.

Lokolo

You don't take anyone who is earning under £100k?! You must be loaded....

Nomad25

:rotfl: yeah, he's an IFA!

bartsimpson

How much do IFAs generally charge and will they be any better than an accountant? (I've got one of those for my business)

I know they will vary but rough idea of cost would be useful.

dunstonh

How much do IFAs generally charge and will they be any better than an accountant? (I've got one of those for my business)

IFAs and accountants are very different. There isnt actually a lot of overlap. However, they can compliment each other when it comes to a complex area. IFAs are planners and Accountants are more reactive. Accountants dont give investment advice, IFAs dont give tax advice (apart from on investment products).

So, your accountant will do your and your business tax return. Will make you are aware of tax issues and may suggest you pay into a pension. They cant tell you who, what, where and how when it comes to that pension (or other things).

Like any business charges will vary (and by quite a lot). There are also a number of different business models. Some work on the old transactional model on commission basis. Some work exclusively on fee basis. Some work on a hybrid fee basis (you agree a fee but the product commission can be set to equal that fee - useful on pensions in particular and for those that dont like writing a cheque for advice but want to remove the potential for commission bias). Some work on all methods an adapt to the individual and what they want.

Then you have transactional advisers who give one off advice and if you want more advice you contact them. You get servicing advisers who will contact you periodically with updates and general information (maybe bed and ISA your investments each tax year, portfolio rebalance etc) and then you have others that focus more on the planning side where its more about having a life plan all mapped out and catered for in a more holistic approach.

Indeed, the term IFA has become a bit awkward in that it covers a range of different specialities. Nowadays, it only really means that the person has to offer a fee option and has to have access to the whole of market.

So, in summary, you can get different IFAs to suit different requirements.

Back on cost, you tend to find that worst case scenario will see the IFA cost no more than you using a tied agent. Usually cheaper or equal than buying direct and in some cases cheaper than DIY. e.g. a person aged 30 paying £100pm on a pension would find an IFA charging £1500 fee (taken from the product to get tax relief on the fee) would be cheaper than doing a nil commission DIY stakeholder pension themselves.