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

darkpool

Meeper wrote: »

I have no evidence for you that isn't in the form of confidential company documents which I'm not very inclined to post all over teh interwebz for people to see. My lack of willingness to post these documents obviously makes me untruthful.....

Why do people on an anonymous internet forum think that they know others? You don't know me, and you have no concept of how and why I do the things that I do. Bored with your nonsense, please enjoy your time on the ignored list.

why would any company consider details that a UT pays for dealing costs out of the TER as being confidential?

ehhhhmmm you don't really do much for your "profession". it seems to be the private investors on here with the more intelligent approach to investment, the IFAs seem to ignore questions and go off in the huff.

It looks like the jury has come back and delivered the verdict, and the verdict is

---

IFAs are really just a bunch of UT salesmen.

gadgetmind

Meeper wrote: »

Capacity (the analysis of their assets, liabilities, income and expenditure)

Yes, I had to endure that recently. As part of the process, the IFA insisted that I tell him what our cars were worth. Me pointing out that they were depreciating assets that I'd accounted for in my annual expenditure figures failed to sway him, so they ended up on our asset list.

It's certainly not just "20 questions and you get a number".

I'm sure there's more to it than that, but some years ago, someone kicked off with the following question, which I wrote it down immediately afterwards so that I didn't forget it.

Which of the following sayings do you think best describes your attitude to money?
1) A bird in the hand is worth two in the bush
2) You need to speculate to accumulate
3) Nothing ventured, nothing gained

I'm sure you'll understand if that has somewhat coloured my views on the subject of investor risk tolerance assessment!

(SJP BTW, probably in the early 90s)

gadgetmind

Meeper wrote: »

My lack of willingness to post these documents obviously makes me untruthful.....

Can we settle on "evasive"?

DiggerUK

dunstonh wrote: »

So what do you do? Pick investments at random and cross your fingers hoping it will be ok?

A punters acceptance of risk, has no relationship to the future viability of what they put their money in to.
As has been highlighted in this thread, the finacial industry keeps moving the goal posts on risk levels that were claimed for the particular investment the client was originally advised on.

It is the viability of the finacial acumen which advisors are supposed to base their advice on, that is non existent.
After all, it is the responsibility of the product provider to make the risk assesment, not the financial advisor.
So long as the advisor sticks to the FSA rules , then all future liability for the consequences of that advice stays with the punter.
Therein lies the fraud perpetuated on the public.
..._

gadgetmind

DiggerUK wrote: »

A punters acceptance of risk, has no relationship to the future viability of what they put their money in to.

No, but it does tell you if they'll bottle it at the slightest drop in the market.

BTW, what do people think of question 7 here.

https://personal.vanguard.com/us/FundsInvQuestionnaire

As they don't give the probability of gain versus loss, or even say whether it's the same for all investments, what answer is one supposed to give?

I ended up saying B because assuming a probability of 0.5 for the two different outcomes, it gives the best long-term gain, but if the outcomes aren't binary, then A wins out.

Odd question IMO.

Meeper

I would have also gone with B, but agree that it is an aggravating question. Have seen questions like this on many risk profiling tools over the years, and didn't like them at all.

I don't like Q5, because some people may have no idea what a mutual fund is.
I don't like Q6, because it doesn't explain that a bond investment is supposed to be on the lower end of the risk scale and less volatile.
I don't like Q9, because the terminology used is not familiar to the average person and will never produce an accurate response because people won't understand the question.

Not a good tool, in my humble opinion.

gadgetmind

Meeper wrote: »

Not a good tool, in my humble opinion.

Agreed, but I gave it a shot, and it came out with 70% equity and 30% bonds. What a shock!

While the Vanguard tool is perhaps not a shining example (though let's remember it's a US tool) I've been less than impressed with all of those I've met, and Hale's views on such tools are aired fairly forcefully in Smarter Investing.

The problem is that the only replacement for this would seem to be educating people about the long-term behaviour and correlation of the various asset types, and a lot of people seem pretty immune to financial education!

Lokolo

gadgetmind wrote: »

The problem is that the only replacement for this would seem to be educating people about the long-term behaviour and correlation of the various asset types, and a lot of people seem pretty immune to financial education!

With the number of posts on a finance forum I have, you can imagine how cool I am

dunstonh

After all, it is the responsibility of the product provider to make the risk assesment, not the financial advisor.

No it is not. The adviser is responsible for making risk assessment and matching risk.

DiggerUK

dunstonh wrote: »

..... The adviser is responsible for making risk assessment and matching risk.

Advisers do not assess the product risk, or even what the product is suitable for, the provider does.
It is quite clearly stated on the product description literature what the risk is.
It also says if it is suitable for capital growth, income generation, etc..

All of this is available to advisers, and is provided 'for the eyes of advisers only', i.e., not the punters eyes.
The punter tells the adviser what they have, and what they want. All the adviser then has to do is match things up. Easy money when you have the right authority.

The illusion however, is that the financial adviser knows about finance and the bigger economic picture...the reality is that all they know about is how to sell financial products and services.
..._