IFA or Stockbroker

dunstonh

I'm completely new to the IFA industry so please feel free to put me in my place, but aren't IFA's missing a trick here? Spend 6 months doing IMC, subscribe to some 3rd party research (as would a stockbroker) and RETAIN an the clients you would otherwise have to pass over to a stockbroker.

Sounds like you want to be a discretionary investment manager rather than an IFA. in which case it is possible

I'm completely new to the IFA industry so please feel free to put me in my place, but aren't IFA's missing a trick here? Spend 6 months doing IMC, subscribe to some 3rd party research (as would a stockbroker) and RETAIN an the clients you would otherwise have to pass over to a stockbroker.

I guess it depends on your client bank vs the number of times you would need to use it. As the FOS generally consider the average consumer to be cautious unless proven otherwise and expect products and investments to be consistent with the ability to understand what they are doing then most clients would not be suited for you building them a share portfolio.

Anecdotally, I would expect compliance and liability costs to be greater for a discretionary investment manager than an IFA. That money grabbing stockbroker you mention would not be replaced. It would be you.

Since the FSA merged adviser and stockbroker permissions and with RDR opening up other investment universes to advice, it should be easier post RDR to give advice on shares. However, I suspect liability cost and compliance issues will hold it back from the mainstream.

phyland

Thanks very much everyone.