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

darkpool

Meeper wrote: »

Ok - so you've avoided directly responding to the huge majority of my post which was the most relevant part, choosing only to pick out one sentence

your post seems to suggest that IFAs are only beneficial to high net worth individuals?

when you look at the holdings of most of the big UK Unit Trusts they are mostly household names like: vodafone, shell, glaxo etc. To pay someone 3% a year to invest in these companies is stupid. I believe the rule of thumb for stockmarket growth is 7% a year, so the fees of a UT will account for a third of the stockmarket growth......

anyone with an excell worksheet should investigate the difference in an investment that grows at 7% a year and one that grows at 4.5%.......

Meeper

I'm not suggesting advisers are only good for high net worth people at all. Don't put words into my mouth. I was simply offering a single real-life case where the services offered by an adviser were worth paying for by the individual.

If you think that all the adviser does it invest the money in the shares you mentioned and that's it, you're totally missing the point.

And you don't need an excel spreadsheet to work out the difference between growth at 4.5% and growth at 7%. You need a simple grasp of arithmetic to work out the formula FV=PV(1+r)^n for each and compare the results. You didn't know that? Gosh.

gadgetmind

Meeper wrote: »

Can I at least get you to admit that there are financial advisers out there who do not charge excessive fees and are fair in their charging structures?

I've never met one (other than on MSE, of course!) but I'm sure they exist.

I see you and people like you on here all day saying "steer clear of IFAs and their 3/4/5/6/7% fees"

I've never seen >5% other than when someone wanted £400 to advise me on moving a £2k pension pot.

Well done for knowing your onions

I know a lot about what applies to me and a smattering of other bits and bobs, which I fully recognise is a tiny percentage of what an IFA needs to know.

telling people to avoid advisers is exactly how individuals get into trouble in financial products.

I'd never tell someone to avoid advisers any more than I'd tell them to avoid car dealers, but I would suggest they do their own research and use a degree of caution. I'd also recommend they learn how to fill the car with fuel, check the oil level, and change a flat tyre, because these are important basics on which they can build.

There you go, a car analogy, does that mean the thread is officially at an end?

darkpool

Meeper wrote: »

And you don't need an excel spreadsheet to work out the difference between growth at 4.5% and growth at 7%. You need a simple grasp of arithmetic to work out the formula FV=PV(1+r)^n for each and compare the results. You didn't know that? Gosh.

nice equation, let's put it into practice

if you invest 10,000 for 20 years at 4.5% you get 24,117
if you invest 10,000 for 20 years at 7.0% you get 38,696

so the effects of the fees of a UT trust are quite significant......

obviously i would invest in managed funds if there was proof that the fees produced superior returns, but unfortunately there is no proof of that in fact the bulk of academic evidence points to trackers beating actively managed funds.

Meeper

Please provide said academic evidence. Please also find me unit trusts which have 3% annual charges. Provide.....something of substance to back up your arguments, otherwise you have nothing but black marks on a white screen.

gadgetmind

darkpool wrote: »

the bulk of academic evidence points to trackers beating actively managed funds.

However, much of that evidence pertains to the US markets, which many argue are more accurately priced than others.

dunstonh

I've never met one (other than on MSE, of course!) but I'm sure they exist.

Of course they exist. The FSA averages taken from real investment applications prove it. Average of course means some take less and some take more. You are going to get greedy sods and you are going to get good value.

I've never seen >5% other than when someone wanted £400 to advise me on moving a £2k pension pot.

That seems fair enough. I would charge them £500. However, I wouldnt expect them to pay but walk away. That is unless its an existing client with an ongoing relationship or where i am the family IFA and I may do it at little or no cost.

Just to make sure its clear, if someone wants to DIY then they can. There is nothing wrong with that. Some will be good at it as they, others wont but it is their choice. However, calling people stupid for using an adviser (as darkpool did) or using extreme examples as the norm is not on. There needs to be some balance. And remember that DIY is not always cheaper. An IFA can come in lower cost than someone using the HL SIPP. If you DIY it should be because you want to DIY and enjoy it. Its not necessarily about saving money.

gadgetmind

Meeper wrote: »

something of substance to back up your arguments, otherwise you have nothing but black marks on a white screen.

http://www.telegraph.co.uk/finance/personalfinance/investing/7923367/More-than-meets-the-eye-to-fund-charges.html

While *real* annual costs are unlikely to hit 3%, well over 2% is common.

Meeper

Thanks. There is so much in that article which backs up my points. Good link!

gadgetmind

dunstonh wrote: »

However, calling people stupid for using an adviser (as darkpool did) or using extreme examples as the norm is not on. There needs to be some balance.

Agreed 100%

An IFA can come in lower cost than someone using the HL SIPP.

Hey, that's an extreme example!

The HL SIPP is expensive for funds due to no discount and full trail (and all the hidden costs in funds), and expensive for everything else unless you have a 6 figure pot thus making the £200pa cap a reasonable percentage.