Is my IFA cheating me?

Conrad

Chrismaths wrote:

There are good IFAs, Doctors, Lawyers, Accountants - and there are bad ones. Find a good one, who can advise you on how to plan for your financial future, and you'll be glad.

In the meantime, stop demonstrating your patent ignorance.

When laypeople approach an IFA regards investing they expect a positive outcome. They expect that outcome to broadly put them in a better finacial position than they otherwise would have achieved.

I know exactly what goes on in your typical IFA. They look at a few big named funds and virtually pull one out of the hat based on all sorts of spurious old fashioned notions such as risk. Pretty clunky and highly ineffective.

What Ive never known one do is to look at which investment arenas ought to outperform in the comming years in order to meet or exceed the clients expectations.

I recall an IFA freind who is a very honest person yet he had no real grasp of what investing is all about. He could tell you the name of every obscure death trust arrangemt in town or which critical illness any policy covered but when it came to investing he invariably consulted 'the network' and would glibbly tell me he "invested £100000 in Scottish Widows Bond" following some obscure factfinding endeavour. The fund was worth £5000 less the moment it was vested and I recall most of those clients loosing money through the late nineties and into this century. This is a theme Ive seen repeated over and over.

I used to ask why he hadnt considered cheaper alternatives such as Unit Trusts which were much closer than S Widows to the underlying investment. I guess it had a lot to do with the much lower commision he told me he would earn from such a deal.

I was also cross he used to dismiss B2L (this was the mid to late nineties) as did all the advisers in his firm and network yet this is the very vehicle that massively outperformed packaged equity investments.

I repeat that once again most IFAs are now not recommending buying abroad or investing in European and other foreign property funds when this is the exact thing they should be doing to meet the clients investment expectations as well as some invested in UK equities.
What is the point of financial advice if its not to make the most of investing?

The whole industry status quo needs a kick.
Pick up any copy of 'Financial Adviser' over the last 10 years the same old tawdry irrelevant products are discussed. Only recently has UK B2L become accepted and recognised in the IFA industry ABOUT 10 YEARS TOO LATE!

dunstonh

Conrad, for someone who claims to be in the industry, you don't appear to know a lot about finanancial services. You also dont appear to know a lot about investing either with your "recommendation" to go direct to fund houses.

Edna_Bucket_2

Conrad wrote:

The whole industry status quo needs a kick.

Too late. The public have little confidence in either IFAs or the letter "I" at the beginning it seems.

40,000 volts of mains current might possibly shock the IFA "patient" back to life, but for how long?

A dying breed, one can't help but feeling. Will the sector or any IFAs at all exist in 10 years time? And will anyone mourn their passing?

Tiggs_2

Conrad wrote:

Warren Buffet the worlds second richest Man said this of financial advisers:

"in aggregate, people get nothing for thier money from professional money advisers".

I agree. Not one person Ive met who has built considerable wealth used an IFA in the process.

Building considerable wealth is hardly the role of an IFA...how many of these "persons you've met" built that wealth in any way other than taking large risk based on personal convictions, not the sort of thing you can "advise" to 99.9% of the population.

As for the later comments by others on IFAs being a dying breed...i haveto say they may be right (to some extent)....the recent muddying of the waters with de-polarisation has left me convinced that remaining an IFA is no longer a primary concern for my business (and will almost certainly go multitie before the end of the year).

While the true IFA giving good advice may be an ideal it is not a position supported by regulation and legislation, which in turn means the public dont buy it as strongly as they should.

10 years ago...when i was tied clients often asked if i was an IFA, now (as an IFA) most of them wouldnt know and wouldnt care! It seems i struggled to reach a position of importance within my industry yet when i arrived the importance had left the position!

Edna_Bucket_2

Chrismaths wrote:

...In the meantime, stop demonstrating your patent ignorance.

I didn't know you could take out a patent on ignorance, but hey ho, you learn something new every day...

Is it better to demonstrate ignorance or to lecture other MSE posters and demonstrate patent arrogance?

Tough decision.

Chrismaths

Patent (adj) - Obvious or plain.

Personally I think it better to point out where someone is spreading misinformation on a public forum. You call it arrogance - I was simply showing that Conrad is spouting forth on a topic he has demonstrated he knows little about. On other boards and this one he has presented himself as someone who is 'in the know' - and it worries me that people reading this board would read his postings and follow his advice. So not a particularly tough decision.

I'm an investment manager, I don't give financial advice - so I am pretty disinterested in this debate, but FWIW: I agree that the 'I' in IFA has become a bit pointless since depolarisation, and I've posted before that I think that the salesmen IFAs should not be called IF Advisers, but Financial salesmen. They give the proper, decent, knowledgeable IFA a bad name. But saying that 'some IFAs are bad' therefore there is no point in trying to find a good one, seems a bit wrong-headed to me.

And Conrad is still reading the wrong magazines - 'Financial adviser' is targeted at protection, mortgage and pension Financial advisers - perhaps he should read 'Investment Week' or 'Investment Adviser' - magazines that are targeted at the investment specialists. Would you criticise a GP for not being a consultant oncologist?

PS (and how do you 'vest' a bond?)

Edna_Bucket_2

It was only a bit of a gag by me Chrismaths - that's gag as in "joke" as opposed to "piece of material or device used to cover a person's mouth to prevent them from speaking."

Obviously, I do accept that the second definition may be more appropriate and apt in the case of some IFas...:D:D

dunstonh

Prevent all salesforces from using the term independent and you would improve the standing of the term "independent financial adviser" overnight. I would also include some networks in that category as well.

Tiggs_2

i dont think the term is saveable.....i recently did a survey of all my clients and prospective clients and one area covered was whether being an IFA was important. Out of 50+ responses so far not one person ranked being an IFA as most important and the majority had it right near the bottom (along with charges!)

Seems most folks want a local comapny, a long term relationship with someone they like and an expert in the field that they are interested in (maybe thats just my clients as 99% come to me for IHT planning)

Either way, whether the adviser is an IFA, charges fees or goats wasnt important.

caveat_emptor

Tiggs wrote:

i dont think the term is saveable.....i recently did a survey of all my clients and prospective clients and one area covered was whether being an IFA was important. Out of 50+ responses so far not one person ranked being an IFA as most important and the majority had it right near the bottom (along with charges!)

Seems most folks want a local comapny, a long term relationship with someone they like and an expert in the field that they are interested in (maybe thats just my clients as 99% come to me for IHT planning)

Either way, whether the adviser is an IFA, charges fees or goats wasnt important.

Not sure I understand this as you don't say what other criteria was on the list. Are you saying that your clients don't care if the advice they're getting is independent or not and are not interested in charges.
Strange clients, because if I were seeking financial advice these would be at top of my list.