Anyone been to an IFA and not been advised to buy Unit Trusts?

darkpool

dunstonh wrote: »

50,000 fund options rising by a few more hundred isnt really going to be make a lot of difference.

but if the new fund options (ITs) are better will it not make a difference?

even if you consider ITs as being risky could you not get round this problem? maybe only invest some of a clients money into "risky" ITs and the rest in cash or equivalent? That way overall the client would have a cautious fund? and also lower annual fees....

gadgetmind

darkpool wrote: »

but if the new fund options (ITs) are better will it not make a difference?

Going for trackers would make even more of a difference, and some IFAs already do this.

Maverick_Money

dunstonh wrote: »

That isnt how it is done. You recommend to the risk profile of the client. Not raise the risk profile of the client to match what you want to do.



No. Ability to understand is important. I go to meetings periodically where often they get a complaints handler in to discuss current complaints and issues to be aware of. In one example that looked perfectly fine on paper, the complaint was upheld as the person was a courier and would not have been able to understand investments. These were bog standard funds and nothing appeared wrong with it. Another board poster mentioned recently that an accountant had a complaint upheld as he couldnt be expected to understand the tax position (bizarre i know).

The advice has to be tailored to the individual and the individual has to be able to understand it. a signature on a form carries little weight as the person with low knowledge is not able to sign to say they understand something they dont understand.



I dont blame him in some respect. Its not so much about giving out best advice nowadays but protecting your backside. We were told recently that the biggest threat to advisers going forward as an industry was not RDR but consumers being encouraged to put in fake complaints by claims companies. Especially in volatile markets as when the PPI issue runs dry for claims companies they will need to generate something else and it feared investments will be their target i.e. "has your investment gone down? yes, then complain and we can get you back thousands". In reality, the chance of success on a well documented case is fine but the £500 FOS fee that would apply to each one referred to the FOS could wipe out small IFAs.

Excellent answer. I fully empathize with having to protect yourself from possible litigation. In a society where people are abdicating personal responsibility, an obsession with the rights of an individual may be detrimental to the benefit of the wider community. Why can't people accept that sometimes they make bad decisions and live with the consequences, rather than seek compensation all the time? Legislation should protect the vulnerable and not be used by everyone as insurance to ensure a favourable outcome. I don't imagine anyone who was sold an endowment that outperformed expectations has considered returning the excess returns even if they didn't understand the product!
I think you've hit the nail on the head by highlighting the danger of the industry giving "safe" advice as opposed to "best" advice.

Sorry to have gone off on a bit of a rant there - it's the sort of conversation I like to have down the pub on a Friday night but I can't wait that long!

PS Like your anecdote regarding the accountant!

darkpool

Meeper wrote: »

If you want to show a balanced point of view and look at things from a different perspective, that's all good. Until then, I'll leave you to your rantings and concentrate on people who actually need help.

Thanks for your kind offer of help, perhaps you could tell me the advantages of holding UTs over a portfolio of shares? I've thought this matter over and can't really think of any major advantage of UTs? Certainly nothing that would warrant me giving away 3% of my portfolio each year. Of course if any other IFA (or private investor for that matter) has any good reasons I would be interested in hearing them.

You never managed to get round to posting evidence that the UTs you sold included the sharedealing costs incurred by the manager.

gadgetmind

darkpool wrote: »

perhaps you could tell me the advantages of holding UTs over a portfolio of shares?

What will the global breakdown of your portfolio of shares be and how do you intend to maintain this?

I hold a small portfolio of FTSE shares, mainly chosen for yields and global/EM exposure, but this isn't something I'd do with more than a small part of my investments.

darkpool

gadgetmind wrote: »

What will the global breakdown of your portfolio of shares be and how do you intend to maintain this?

I hold a small portfolio of FTSE shares, mainly chosen for yields and global/EM exposure, but this isn't something I'd do with more than a small part of my investments.

i work i oman, we still get the big global UK companies here. we get shell stations, unilever toiletries etc. every country i've visited has a shell or bp station. you can get global exposure on ftse 100 stocks.

anyway i'm personally a little sceptical that emerging markets will deliver what some think they can. i've been to india and it's amazing how many people don't have electricity or flush toilets. for me any country that has custom officials wanting money for nothing or threatening to "find" ganja in your suitcase will always be third world.

Linton

darkpool wrote: »

i work i oman, we still get the big global UK companies here. we get shell stations, unilever toiletries etc. every country i've visited has a shell or bp station. you can get global exposure on ftse 100 stocks.

anyway i'm personally a little sceptical that emerging markets will deliver what some think they can. i've been to india and it's amazing how many people don't have electricity or flush toilets. for me any country that has custom officials wanting money for nothing or threatening to "find" ganja in your suitcase will always be third world.

Any investment involves a prediction, either explicitly or by default, of where the the best returns can be made.

You clearly believe that this will be in large Western companies concentrated in the financial, oil,consumer goods (except of course electronics) and mining areas which amount to some 50% of the FTSE. Apart from electronics, you dont believe that vehicles, or come to that any other type of manufacturing should be of much interest to investors.

Fine, that is a prediction.

My prediction is different. I believe the greatest growth will be in the far East, emerging markets, small companies and technology.
For the past 10 years my investing in those areas has averaged over 10% annual return so I remain optimistic.

Time will tell who is right, we each do our analysis and live with the results. I would suggest though that the quality of your research into emerging markets could be open to question.

darkpool

Linton wrote: »

Any investment involves a prediction, either explicitly or by default, of where the the best returns can be made.

You clearly believe that this will be in large Western companies concentrated in the financial, oil,consumer goods (except of course electronics) and mining areas which amount to some 50% of the FTSE. Apart from electronics, you dont believe that vehicles, or come to that any other type of manufacturing should be of much interest to investors.

Fine, that is a prediction.

My prediction is different. I believe the greatest growth will be in the far East, emerging markets, small companies and technology.
For the past 10 years my investing in those areas has averaged over 10% annual return so I remain optimistic.

Time will tell who is right, we each do our analysis and live with the results. I would suggest though that the quality of your research into emerging markets could be open to question.

i'll be honest, there are some sectors where the ftse 100 is lacking. but do you not consider BAe, Rolls, IMI, Johnsom Mathey, Smiths, Rexam, Weir group, smith and nephew and GKN as manufacturing?

100 years ago america was the rising market of it's day, how did it's stockmarket do in the early part of the twentieth century?

Did I not agree with you on another thread that you should definitely stick with UTs?

Linton

darkpool wrote: »

i'll be honest, there are some sectors where the ftse 100 is lacking. but do you not consider BAe, Rolls, IMI, Johnsom Mathey, Smiths, Rexam, Weir group, smith and nephew and GKN as manufacturing?

100 years ago america was the rising market of it's day, how did it's stockmarket do in the early part of the twentieth century?

Did I not agree with you on another thread that you should definitely stick with UTs?

All the companies you mention some of which arent in Manufacturing together comprise about 3% of the FTSE100. That is just over half the value of BP on its own.

gadgetmind

Linton wrote: »

My prediction is different. I believe the greatest growth will be in the far East, emerging markets, small companies and technology.

Interesting. I've been overweight in all of those for a few years, and will continue this with my spiffy new trackers.

Other than technology. 30% of my total holdings are in technology, and 90% of this in one company.

Do as I say, not as I do!