Financial advice is for rich people.

[Deleted User]

I live in s Wales and our (ex) ifa wanted to charge us £250 an hour. You can see why he became our ex. Cheerfulcat is absolutely correct and we took that route. The information is easily available on the net

We haven`t looked back but appreciate that some people cannot cope with research. I spent dozens of hours to improve my knowledge. It isn`t rocket science but it takes tenacity

cheerfulcat

It's fairly obvious that you only glanced at the Fool site. It contains all of the information anyone needs to start investing; you clearly only looked at one page.

You seem to have some sort of chip on your shoulder so I shan't bother again but for anyone else reading; you don't need an IFA, you don't need financial products and it doesn't require a degree in maths or economics or anything else to handle your own investments, just a bit of common sense.

EdInvestor

A young person saving for retirement can manage pretty easily without an IFA.

Assuming

1) the person has no debts (pay them off first) and has already saved up a cash emergency fund of say 6 months living costs

and

2) has in addition saved up a deposit for/acquired by whatever means probably including a mortgage his own home

and

3) now wishes to start accumulating money for retirement but has no access to a company pension with employer contributions

and

4) is a basic rate taxpayer


then the young person should avoid pensions and instead concentrate on maxing out his 7k a year stocks and shares ISA by investing in unit trusts which focus on equities.

He should choose a spread of funds with various risk levels in different categories, and try to choose from the top funds in each category. On risk, the "equity income" funds are the lowest risk, followed by equity growth funds, index trackers, small cap funds and foreign equity funds.

This site divides the funds into categories and rates them.Choose funds with a consistent long term record in the top 10 for each group.

Then set up the ISA and stock it with your choice of funds using a discount broker which will rebate the charges such as

https://www.hargreaveslansdown.co.uk
https://www.chartwell-investment.co.uk
https://www.cavendishonline.co.uk

That's it.No IFA required.

tomstickland

I looked into this last year and I agree that it's actually pretty simple to understand.
Savings accounts are safe but don't offer a return much above inflation.
Investing is the long term way to grow, but it's riskier.
Unit trusts provide a good way to invest in a pool of shares, and there are many managed funds that can be put into an ISA wrapper via the money supermarkets.

It took me a few evenings of reading to work it out. Then I bought my flat, so it's on hold until later in the year.

claretmatt

I think that intertia, laziness and time factors are big reasons why people can't, don't or won't sort their finances out.

If you ask some 20 something year olds about saving for retirement or pensions then the general attitude is that

1. They'll deal with it later
2. They don't understand them
3. They might get run over by a bus tomorrow

Its not a sexy subject and the "pension / retirement crisis" is surely an indication of this.

You could apply the same criteria to fixing your car or decorating your house for example. Its easier to get someone else to do it than learn or you just seem to put it off and put it off.

I do agree that personal finance should be on the school curriculam

ReportInvestor

But then the government sends people into debt for the next 12 years.

So saving / investment is meaningless to 15 year olds.

Because 30 is an age when you start to save and stop having sex.

shiredeon

one other thing to consider is that on this site you get a wealth of information from a large number of either well educated or well informed people, no matter what you pay an ifa you are getting the view of one person, i knew nothing before my first post here and now i am begining to understand (thanks to all)

EdInvestor

ReportInvestor wrote:

Because 30 is an age when you start to save and stop having sex.

Dear me is that right, ReportInvestor.

Things have clearly changed a lot since my day.

bud-miser

I've often mused over the upside-down values society seems to have adopted over the last 30 - 40 years.

They say that 'civilisation' is what springs from an agricultural surplus, i.e. that as soon as you get beyond subsistence farming, where it's every man for himself, then you can start 'affording' luxuries - like an extra mule or an 'IFA'.

That's where the rot starts, sadly, because distortions set in when people get THEIR particular hands around the medium of exchange (money).

So, we end up with honourable folk whose occupations make scant contribution to the common good - 'company directors', 'fund managers', 'financial consultants' and the like - becoming fabulously wealthy. It's odd just how often the proximity of finance seems to co-incide with this scenario.

Needless to say, those who are engaged in actively helping others: teachers, social workers, nurses etc often find themselves at the bottom of the financial pecking order with floods of abuse being directed their way by a society which is only concerned with instant success and push-button living.

Your 'rant' Tirian, was spot-on and well directed.

My own view is that it should be one mule apiece, unless you can show you've earned more through GENUINE high achievement in education, science, the arts... or making a positive contribution to the lives of other people.

Tirian

cheerfulcat wrote:

It's fairly obvious that you only glanced at the Fool site. It contains all of the information anyone needs to start investing; you clearly only looked at one page.

You seem to have some sort of chip on your shoulder so I shan't bother again but for anyone else reading; you don't need an IFA, you don't need financial products and it doesn't require a degree in maths or economics or anything else to handle your own investments, just a bit of common sense.

Indeed, I did not spend hours poring over it - I was at work, where although I have time to rattle off a post or two on a message board, taking a few hours off for personal browsing isn't really an option. Thus my reply was a quick example of the sort of consideration that shows that your assertion that everyone should be able to arrange their own pension investments is errant.

I think you are possibly failing to distinguish between some of my comments about my own personal situation, and my comments about the wider problem of pensions & finance crisis in the under 40 generation.

It is perhaps possible that if I ploughed enough time into it, I could work out as good an investment plan as a professional adviser. Perhaps. But this is absolutely not the case for everyone. You cast scorn at people who don't realise that they should pay off their credit card before making savings and say that 'they shouldn't be allowed to handle money' - but many, many people genuinely don't realise this!! Yet you want to insist that these people are entirely capable of researching complex - yes, complex - financial investment decisions?

You can't have it both ways, I'm afraid!

I work on research, lobbying and public affairs for various organisations associated with the finance industry, so I see a lot of the hand-wringing that comes from the FSA, and from tut-tutting newspaper columnists about the dire attitudes of today's 20s & 30s to finances and retirement planning, but is it really any wonder?

Tax reliefs on pension funds have been whittled away to practically nothing, in effect, because what you save at this end just gets taken off at the other end eventually - oh, unless you're a higher rate tax-payer of course .. yep, if you're already raking it in, you can still perk up your pension with some natty tax relief. We've seen the government give misleading advice, leaving people with wiped out pensions, and then refuse to compensate even when the report they themselves commission into the affair states that they should! We've seen the effect the endowment fiasco has had on our parents. We're working in jobs that don't put a penny into our pension schemes, because they've run out of ways to keep pumping up their profits for shareholders so they've resorted to pulling up the ladder on the pensions schemes.

Nice to see the advice from Edinvestor that we should get ourselves a house before we start making pension investments. I don't know what planet that came from, but from where I'm standing that's pretty much telling me to hang up my hat and give up. I live in London. I earn £22k. Buying a house, in the current climate, is a sheer impossibility.

Putting finance on the school curriculum may help somewhat - but it's certainly no magic bullet. Making something compulsory at school doesn't guarantee people will learn it - look at maths. The fact is, if you want people in their 20s & 30s to get to grips with finance / pensions / etc. then there needs to be some method of providing accessible advice for them. It's all very well saying £250/hr is "justifiable" - but if you want 20 year olds earning £15k to be getting financial advice, that doesn't cut much ice.

Anyway ... I will look more at the Motley Fool site. And I will go to my initial appointment with this IFA. But I'm not going to go off and set up my own investment plan just because someone on some message board told me it was the best thing to do, and that I was lazy and / or stupid to do anything else. And if you're going to get huffy about that, then I suggest you get over yourself a bit! I've been quite up front in saying that I am starting from scratch and I don't know what I'm doing - but that doesn't mean that anyone who swans over and pronounces that they know what's best for me to do is going to get my immediate adulation. I'm glad it worked for you - but I'll be the judge of whether it's right for me or not. And frankly, backing yourself up with claims that anyone who doesn't want to do it your way is just too lazy to put the effort in doesn't actually give you any credibility in my eyes. It's just another opinion.