Looking for an IFA - I will pay 5% maybe 10%!

gadgetmind

fairleads wrote: »

Which begs the question why use an IFA?

I'd prefer not to do my own wiring, or fix my own cars, or tackle my own plumbing, or handle my own investments, or worry about my own tax, but as no-one else is prepared to put in as much care and time in as I am, I find the job gets done better. Sad but true.

I do use tradesmen (and I include accountants and IFAs in this) but they operate under my supervision.

gadgetmind

dunstonh wrote: »

I dont know anything about 4-5% up fronts.

This is what many IFAs demand. Sad but true.

Most UT/OEICS are clean priced (or as much as they can be on UTs) nowadays.

UTs have bid/offer spread, OEICs have their up front charges, and while the discounters tend to make this go away, I have never met an IFA who does so. Some might, but I have never met one.

Your electrician does a job and moves on. A servicing IFA does not.

I have met a servicing IFA. Once. In about a decade. He is now off the job.

darkpool

dunstonh wrote: »

Typically between 0.7% and 2% depending on investments and taking the typical 0.5% adviser remuneration.

Below is an extract from "which" the consumer website. It suggests annual fees of over 3%.

The Financial Services Authority (FSA) carried out a study into this in 2005, and found that an annual turnover rate of 100% (all assets in the portfolio had been bought and sold in one year) would cost you an extra 1.8%. Add that to the average TER of 1.67% and you’re looking at annual costs of over 3%.

Ark_Welder

darkpool wrote: »

Below is an extract from "which" the consumer website. It suggests annual fees of over 3%.

The Financial Services Authority (FSA) carried out a study into this in 2005, and found that an annual turnover rate of 100% (all assets in the portfolio had been bought and sold in one year) would cost you an extra 1.8%. Add that to the average TER of 1.67% and you’re looking at annual costs of over 3%.

For those interested, the rest of the paragraph quoted above reads:

Of course, the trades taken by the fund could boost your returns by even more and a good manager wouldn't spend money on the trades without thinking it would enhance performance.

Full article: http://www.which.co.uk/money/savings-and-investments/guides/different-types-of-investment/are-fund-charges-eating-into-your-returns/

...and it ends with

If you’re unsure about investing, you should seek independent financial advice before you go ahead, and only those confident and knowledgeable about investment markets should go it alone.

Meeper

This thread is ridiculous and serves no useful purpose.

darkpool

"Of course, the trades taken by the fund could boost your returns by even more and a good manager wouldn't spend money on the trades without thinking it would enhance performance."

"could boost returns"? i don't suppose you have any evidence that the managers that are paying 3% in fees manage to outperform trackers? what happens if the manager doesn't deliver superior returns?

"good manager wouldn't spend money", fund managers churn the portfolios they manage because the stockbrokers provide "free" services to fund managers. i also believe stockbrokers are known to treat the most active fund managers to grouse shooting and nights at the strippers.... just google "soft commision" if you don't believe me.

i bet your portfolio is mostly UTs?

darkpool

Meeper wrote: »

This thread is ridiculous and serves no useful purpose.

why do you think that?

Ark_Welder

darkpool wrote: »

"Of course, the trades taken by the fund could boost your returns by even more and a good manager wouldn't spend money on the trades without thinking it would enhance performance."

"could boost returns"? i don't suppose you have any evidence that the managers that are paying 3% in fees manage to outperform trackers? what happens if the manager doesn't deliver superior returns?

"good manager wouldn't spend money", fund managers churn the portfolios they manage because the stockbrokers provide "free" services to fund managers. i also believe stockbrokers are known to treat the most active fund managers to grouse shooting and nights at the strippers.... just google "soft commision" if you don't believe me.

Do you have any evidence to say which managers are charging 3%? Do you have any evidence of which funds are being churned?

No point is stating what you believe, provide evidence to prove it. Your beliefs are of no use if they're not backed up by evidence. Then again, I don't believe that I would be bothered if you did.

Strippers and grouse shooting? How unimaginative.

darkpool wrote: »

i bet your portfolio is mostly UTs?

My best suggstion is that you give up gambling.

Meeper

Because the proponents of "do it yourself" are so entrenched in their thought process that they refuse to believe that there is a viable alternative to their opinions, thus they decry every contrary point of view as nonsense or unfounded.

Here's a decent example along the same lines as dunstonh mentioned previously:

I have a client for whom I have provided advice on pensions, investments, mortgages, savings and protection. Said client is not an idiot, uninformed or anything else. Said client is a fund manager, an investment banker working for one of the biggest investment banks in the world. Said client has experience in active management, passive tracker fund management, ETF's and a whole range of other areas to long to go in to. Said client has neither the time nor the inclination to research the most appropriate structures for tax-efficiency, find out which platforms offer the most flexibility, who is the most secure and reliable provider, where to find the best mortgage rates, which critical illness providers have the most illness definitions, and so on. Said client works over 70 hours a week and has a basic salary in excess of £150,000 per annum, IMA and CFA qualifications and a doctorate in financial analysis. Said client has referred over a dozen of his colleagues to me as the service I provide gives him the peace of mind he deserves for his finances so that he does not need to worry about the management of his money whilst he is busy managing the billions of other people's. I advise on the structures and underlying strategic asset allocations required to achieve his goals, and we jointly decide on the funds which will fit into the strategic modelling and make tactical asset allocation decisions from time to time on a joint basis in order to take advantage of certain situations or reduce the effect of others.

The adviser gives advice on strucutres and products which will achieve the aims and goals. The adviser does not generally (although some do) get involved in the physical investment management of the funds, leaving this either to the fund managers themselves or using a discretionary fund manager to work on behalf of this specific's clients objectives. It is the advice on said structures and products and their continued suitability for the aims and objectives of the individual client that justifies the adviser remuneration. It's that simple. Saying that an adviser should be liable to pay money back to the investor when markets fall is ludicrous and just plain nonsensical - referring to the original post.

Meeper

darkpool

Ark_Welder wrote: »

Do you have any evidence to say which managers are charging 3%? Do you have any evidence of which funds are being churned?

No point is stating what you believe, provide evidence to prove it. Your beliefs are of no use if they're not backed up by evidence. Then again, I don't believe that I would be bothered if you did.

Strippers and grouse shooting? How unimaginative.

My best suggstion is that you give up gambling.

well, i think most people here would agree that TERs are typically 1.5 to 1.7% for activelly managed funds. Then if you do some further research you'll find that a typical fund will have brokerage charges of circa 1% a year. why do you think "which" mentioned 3% a year if it wasn't a fairly typical fee for a fund?

i reckon a day shooting cute fast flying birds followed by watching some fit east european girls getting naked would be a good day - but we're all different.

why do you think i gamble?

you are a UT investor, aren't you?