Financial Advisor

davidcampbell

have an appointment on wednesday in my local HBOS with a financial advisor (i went in to open a regular saver and they said a chat with a financial advisor might be better for me - he asked how much i was looking to save and said for my level of saving [£100ish per month], the FA would be better than a normal sales advisor)

anyhoo, ive got the appointment on wednesday. he has asked me to take along NI number, details of any savings i currently hold, any shares, pensions, ISAs etc

and to think about my current financial circumstances and my overall financial ambitions in the coming years

should be an interesting chat if nothing else.

from what i understand the fella im meeting is just a halifax FA rather than independent so can only tell me about halifax products (or have i misunderstood that aspect?) so im not sure i understand how he can be better than a 'normal' sales advisor. (where they just trying to make me feel important? lol)

what sort of things should i ask him to try to get the most out of the appointment?

or indeed what sort of things should i look for him asking me so i know he is actually trying to help me as opposed to himself (through any commissions he might earn) ....


thanks

DC

Reaper

The main thing to ask, since you are unclear on it, is whether he is independent and if not what he is tied to.

Other than that just make sure he justifies his recommendations properly and if you think any advice is dodgy you can always ask here before signing.

If you don't feel comfortable in any way don't feel you are under any obligation. There are plenty of other advisors out there.

dunstonh

He will be tied. By all means have a chat but remember Halifax financial services products are expensive and not very good.

davidcampbell

ok thanks for the help folks

ill post back on wednesday with an update

DC

isasmurf

It's worth pointing out that Financial Advice is changing. Financial Advisors working for Banks up to now have generally only been able to advise on their own products. But they are now allowed to advise on a range of products from other providers. This is called multi-tied. This does not mean they are independent. They can only advise on products to which they have agreed to sell, and these may not be the best in the market.

dunstonh

I expect the products to be cut down or higher charged versions of the IFA products. Very similar to what Scottish Widows do already with their IFA product and the LTSB product.

davidcampbell

well, meeting was quite interesting. nice chap i dealt with, very pleasant and really knew his stuff

anyway

we discussed the different options avaialble to me and based on my risk tolerance (which is quite high) he has suggested saving in an "halifax isa investor for growth"

regular monthly payments invested in different funds. no upfront charges - all charges are calculated and taken into account on daily share price calcualtion so in theory dont even notice it.

he has suggested that while the money is accesible immediately without penalty if i need to access it, anything long term, upwards of 5 years would be advisable to allow the 'peaks and troughs' to level out

since this is extra cash i have on top of my other 'easy access' savings im quite tempted to use it as a vehicle for saving for my future.

he's left me to think about it for now and will send me out a proper illustration to have a look at. he suggested growth of 7% over a 5 year period would not be unexpected (although of course not guaranteed).

seems reasonable. should i be considering any other ways to save long term?

thanks

DC

dunstonh

the method is fine. The provider is not. The charges using Halifax are about 5% of every contribution. You can get better fund managers without paying that 5%.

davidcampbell

he has told me the charges are 1.5% and given me a document to the same effect. am i missing something?

dunstonh

that is the annual management charge. Although the paperwork says there is no initial charge. What is the bid/offer spread? Looking at the Key Features Document online, it just makes reference to their being a difference between buying and selling prices.

Typically, that difference is 5%. Usually it gets documented but I cannot see anything until section 26 on page 12. "allows an initial charge of upto 5% of the share price and an annual management charge of upto 2%". Its not a direct charge. Its the difference between the selling price and buying price of the shares/units. If you look on the personal illustration he provided you, you will see a reduction in yield figure quoted (usually in the first 5-10 years figures). That is the impact of charges. Online example shows a reduction in yield from 7% to 5.3% over 10 years. The charges reduce the return by 1.7% over 10 years.

Even if they are not currently making that charge, looking at past performance (which doesn't mean anything when it comes to future performance as far as rate of return is concerned) the fund has underperformed the sector average since it's 5th Feb 1996 launch. This is typical of bank funds in general.

£100pm would allow 2 funds to be recommended. You should have 2 funds in different areas and ideally free annual rebalancing.

Although guessing the FTSE is a bit of a game to the fund managers, most have this years end figure around 5100. That is 2% more than the current position. Although that is extremely short term, I wouldnt recommend only 5 years now for stockmarket investments. You need to be looking at closer to 10 years now.

At the end of the day, it is of course your choice but I suggest you look at morningstar and take a look at some of the alternatives. If you want to stick with the underperforming UK all companies sector then consider L&G UK tracker which has lower charges (there are others too, that is just one example).

payless

not really my game-

The KFD does not imply any initial charge nor bid/offer spread-
and I believe the underlying investment0 namely an OEIC is basically single priced

the figures in the illustration do appear to match that out
--

Again not commenting on suitability of product or provider