FSA to probe IFA advice problem

EdInvestor

Hello jem

It is not that I am against IFAs as such - it is more that Dunstonh, leader of the IFA contingent, interprets every comment that I offer which disagrees with his opinion as an anti-IFA remark.

IFAs don't have a monopoly on investment knowledge of course .I don't use use IFAs personally for investment advice and I no longer need them for pension advice as I have moved my pensions to a SIPP.

..you seem to be suggesting not to trust their advice..

I guess you're aware there has been a massive amount of misselling of financial products, particularly pensions and endowments, but also precipice bonds, zeros, and other insurance products, for the last 15 years?

IMHO everyone should be cautious about advice given by all advisers and salesmen, whether independent or not.

jem16

EdInvestor wrote:

Hello jem

It is not that I am against IFAs as such - it is more that Dunstonh, leader of the IFA contingent, interprets every comment that I offer which disagrees with his opinion as an anti-IFA remark.

Your opening statement to the thread does sound rather anti-IFA though.You say;

EdInvestor wrote:

It seems that many people are having problems getting advice on what to do with their With-profits investments like endowments, pensions and WP bonds.

This could be because

#The IFAs don't understand With-profits products and can't work out if people should stay or leave

Yet the Telegraph article says;

"David Strachan, the FSA's head of insurance, said: "There is a concern that there aren't that many IFAs out there well-equipped to advise on whether policyholders should stay with or leave with-profits funds."

"Being ill-equipped to advise" and "don't understand and can't work out" don't seem to be the same to me. Why did you feel the need to change the wording?

IFAs don't have a monopoly on investment knowledge of course .I don't use use IFAs personally for investment advice....

Is this because of previous bad advice or because you feel you have more knowledge?

I guess you're aware there has been a massive amount of misselling of financial products, particularly pensions and endowments, but also precipice bonds, zeros, and other insurance products, for the last 15 years?

IMHO everyone should be cautious about advice given by all advisers and salesmen, whether independent or not.

Yes I am aware of this and agree to a certain extent. I would certainly ask a lot of questions and try to further my own knowledge so that I could formulate an opinion on what was being advised. However there would come a time when I would expect that someone with professional training should know more than I do as an amateur.

ReportInvestor

If the IFAs could work it out, they would be be in a position to advise and would do so - after all, that's their business.

dh admits that many dare not, and are (sensibly therefore) not advising on transfers for fear of getting it wrong.

Getting away from the semantics, that's the bottom line.

jem16

ReportInvestor wrote:

Getting away from the semantics, that's the bottom line.

True but there's interpretation and misinterpretation.

whiteflag_3

ReportInvestor wrote:

If the IFAs could work it out, they would be be in a position to advise and would do so - after all, that's their business.

dh admits that many dare not, and are (sensibly therefore) not advising on transfers for fear of getting it wrong.

Getting away from the semantics, that's the bottom line.

Its just constantly IFAs , one big incompetent group. You just keep on tarring them all with same brush!

Why dont you wait for the results before making your judgement. I thought in this country your innocent until proven guilty?

( by the way which one are you? )

ReportInvestor

You're making a mountain out of a molehill. But this issue is bound to be of concern to many MSE readers in with profit funds.

dh said many IFAs are reluctant to advise on with profit transfers. Are you saying he is wrong?

whiteflag_3

ReportInvestor wrote:

You're making a mountain out of a molehill. But this issue is bound to be of concern to many MSE readers in with profit funds.

dh said many IFAs are reluctant to advise on with profit transfers. Are you saying he is wrong?

I assume this was a reply to my post-

I couldnt agree more - it must be a big concern to MSE readers. But you and Edinvestor(s association) end up not helping the debate and the MSE readers you are obviously concerned for by constantly IFA bashing.

I dont believe for one minute Edinvestor(s association)'s original post was made for any other reason than yet another snipe at IFAs.

If the engine fell out of your new car you wouldnt blame the salesman would you?

Why dont you have a go at the life companies who pedalled these products for years, with bonuses set by marketing departments.

I could sit here all night telling of the conversations i have had with life company reps over the years. I remember a good IFA being laughed out of the room during a Commercial Union WP Bond presentation in 1994 when he had the cheek (knowledge) to ask about their MVA policy.

NU were offering a guaranteed 10% first year bonus on their wp bond in 1999/2000, what that an IFAs doing?

Was it IFAs that decided that Standard Life would keep going without an MVA way after all the others had thrown the towel in, i think not.

A bit of balance would be nice from time to time!

I know alot more IFAs than you so you dont need to preach to me about poor standards of advice, just dont tar us all with the same brush (my god :rotfl: im repeating myself now)

ReportInvestor

whiteflag wrote:

I dont believe for one minute Edinvestor(s association)'s original post was made for any other reason than yet another snipe at IFAs.

I thought it was to raise a real problem facing investors who haven't a clue what to do.

whiteflag wrote:

Why dont you have a go at the life companies who pedalled these products for years, with bonuses set by marketing departments.

We do plenty of that. I suppose the insurance companies don't come to MSE to defend their past actions in public. If only they did :rotfl:

whiteflag_3

ReportInvestor wrote:

We do plenty of that.

Is that the royal we or perhaps the "E" team.

ManAtHome

I may be missing something here, but...

Lets say you have an insurance company (or a bank b/s, whatever). You are flogging loads of a particular product, then it starts getting a very bad press, so you stop flogging it. As you are still flogging other stuff, you decide to 'relocate' some profits from the now-unfloggable product into your more floggable products thereby making your un-floggable product even more un-floggable.

Questions -
Are the people who advised investors based on track record and published accounts AT THE TIME OF INVESTMENT culpable?
Do the FSA actually check that you aren't 'relocating' profits?

This may well be an over-cynical view, but the only way I could have achieved some of the current bonuses (Moneybox last Saturday) would have been to bung the cash with ING for 3 months, then under the mattress for the next 9...