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Financial Advisor - recommendations
Comments
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Loughton_Monkey wrote: »The situation, currrently, in Financial Services is a little bit complex. In the gas example, then imagine that there is no way on this earth you would ever get 5% off your gas bill direct from the gas company, then you have to say you might as well get the job done for nothing, and let the plumber get paid by the gas company. Who would pay him the full whack and let him get away with 5% of your gas costs on top?
As is (hopefully) happening in Financial Services, I like the idea that the gas company must give you the 5% discount, and then you pay the plumber a fair flat fee for the work he has done - just like a lawyer. There is only one trouble with this business model though. Many people would simply not want to pay (say) £1,000 to buy a pension (which is the way they would see it). So they would simply 'go direct' and put together their own financial strategy. This could be as dangerous, though, as refusing to pay a plumber to design and fit your gas boiler. Do it yourself for nothing. When does it explode?
As ever a most useful post and example.
Nothing in life is free we all know that.
In the gas/plumber analogy you at least get the boiler and pluming and have something to touch and feel. So even if paying by a fee for future usage that is higher than buying outright you do feel you have had something.
With financial advice you are really buying an aspiration/expectation based on predictions and future uncertainty.
If the advisor incorrectly or deliberately gives advice it may be sometime later that this starts to come to light. By which time your hopes are dashed and it becomes much more emotive.
I believe I am a pretty shrewd investor but I don't look for exotics, big risk or have complex tax/business affairs. Since I have been reading these threads I appreciate the added knowledge that the "professionals" impart.
Whether it is required or would make you more from your investment pot is always debatable but some people are prepared to pay for that comfort element.
My MIL will happily pay top dollar to British Gas for a maintenance contract or to have her car main dealer serviced. I prefer to to be more selective and make more efficient use of independent tradesmen."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
tbh that's the way i see it. i don't want to give an IFA thousands of pounds each year. especially when there seems little evidence that IFA/ active management is worth the fees.
how about investing some of your money directly into shares? for instance sainsbury is at a low and yields 4.5%
if a fund invested into sainsbury for you they would take 2% a year. leavig you with 2.5% yield 
Not an IFA issue as such but yes the Management Charges can seriously erode performance IME and that is apparent across a spread of Mangers and Funds.
I find regular switching of Operational Managers, whilst still maintaining fund objectives particularly irritating. It has got to be costing me somewhere in the equation. I had one case where it switched from A to B (totally separate entities) and now it has gone back after several years:mad:"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
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caveat_emptor wrote: »Are people really that naive? Much better to say that some IFAs will look after your interests. I speak from bitter experience.
No different to buying anything really get quotes, contarts and compare take the one offers you the best option."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
caveat_emptor wrote: »Are people really that naive? Much better to say that some IFAs will look after your interests. I speak from bitter experience.
yes a lot of people here are very gullible what did your IFA do to disillusion you with their service? 0 -
I have recently spoken to two local IFAs looking to invest a pot of Circa £200k.
Number one wanted £6k to set up the investments and to keep all of the trail commission.
Number two wanted £2k set up and offered 50/50 split on commission.
Neither inspired confidence.
I got the wrong answer from number one when I suggested he could make out the paperwork based on a £20k pot (costing me £600) and I would go through and add the extra noughts.0 -
:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:I have recently spoken to two local IFAs looking to invest a pot of Circa £200k.
Number one wanted £6k to set up the investments and to keep all of the trail commission.
Number two wanted £2k set up and offered 50/50 split on commission.
Neither inspired confidence.
I got the wrong answer from number one when I suggested he could make out the paperwork based on a £20k pot (costing me £600) and I would go through and add the extra noughts."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
If you wanted advice that was independent of the size of the investment, why didn't you seek out an IFA who would work on a fixed fee basis, either hourly or task-based? That sounds like it would be the best bet for you if you don't want to pay on percentage terms.I have recently spoken to two local IFAs looking to invest a pot of Circa £200k.
Number one wanted £6k to set up the investments and to keep all of the trail commission.
Number two wanted £2k set up and offered 50/50 split on commission.
Neither inspired confidence.
I got the wrong answer from number one when I suggested he could make out the paperwork based on a £20k pot (costing me £600) and I would go through and add the extra noughts.I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
I have also read some copy recently that a number of IFAs are not upgrading to the new competency regulations and that there is insufficient business for the numbers.
The current numbers have no problem with volume. Volume is certainly not an issue. However, it is expected that around 30% will not continue beyond 2012. This is mainly due to the higher average age of an IFA. Its something like 53. So, put yourself in their shoes, if you in your late 50s or early 60s and told you had to sit another 6 exams, would you really want to? Many are dropping down to mortgage and insurance rather than pulling it altogether and will use another IFA to deal with the higher regulated stuff.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I have recently spoken to two local IFAs looking to invest a pot of Circa £200k.
Number one wanted £6k to set up the investments and to keep all of the trail commission.
Number two wanted £2k set up and offered 50/50 split on commission.
Neither inspired confidence.
I got the wrong answer from number one when I suggested he could make out the paperwork based on a £20k pot (costing me £600) and I would go through and add the extra noughts.
If IFA number 1 invested your £200k in unit trusts you'd pay 2.5% a year in fees. So within five years you'd have paid about £31,000 in fees ouch!!!!!!!
it's no wonder i've never seen an IFA about investments.0
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