Drop in well paid using IFA's

Rollinghome

I must have given the impression that I’m interested in your squabbles and/or chatterings with Feesarefare. I’m not.

jem16 wrote: »

We also talked about you in his new guise as feesarefare but you wouldn't want to know what he said then.

You seem compelled to tell me that he privately slagged me off to you.

Was obviously a misjudgement by him to think that someone like you could be trusted to hold in confidence any remarks he made to you privately, but you are quite right, I wouldn’t be interested. The only point I was making was that, in the posts of his I read, he was very strongly opposed to selling investments on commission – hence his name – and shouldn't be bracketed with the commission-based IFAs on this board who were opposed to any change.

I have always maintained that some of RDR is going to be good for clients.

You say “some of RDR”. If you have now changed your mind and think that the FSA’s attempts to control “commission bias” by banning commission on investments and to require higher qualifications than a level 3 QCF then that’s progress I suppose.

However I have also said that some is going to be bad as it will see increased costs for the smaller investor. We are already seeing that now with HL's charge for trackers.

No we aren’t. HL's charge for trackers has nothing to do with RDR. The charge was introduced because a high proportion of their clients are now choosing tracker funds that pay minimal or no trail.

Funds that pay no trail commission now won’t pay trail any after RDR so their position will be essentially unchanged. It’s those funds that currently do pay trail commission that will change and come RDR HL will have to completely change their charging structure for them. Trackers can be had at the same price as before either directly from the managers or from other sources.

Don’t believe all the misinformation put out as scare tactics by IFAs trying to derail RDR.

gadgetmind

psychic_teabag wrote: »

I'm not sure anyone is claiming such a thing. But not everyone is able to construct such a portfolio themselves.

There's no such thing as the optimal frontier, so any old diversified portfolio should muddle though pretty well, particularly (especially!) if you keep the fees low.

Bernstein, Graham, Hale, take your pick.

gadgetmind

Aegis wrote: »

Edit: Just realised I crossed wires here, you were talking about direct holdings vs indirect holdings. My apologies for the misconception

Yup.

The MPT is making sure you have two veg with your meat, the active versus passive is whether you pay someone to hand pick the seeds, and the IFA or DIY is whether you want someone to sprinkle magic pixie dust over your meal.

(OK, it's late, and I've had some wine. )

gadgetmind

arnoldy wrote: »

Far better (if you can) to hold the underlying investments yourself.

Where possible, I hold direct equities, but failing that, I use low cost trackers. Those who want to seek alpha at the end of the rainbow can do so, and I'm sure the leprechauns who run the active funds can be trusted 100%.

jem16

Rollinghome wrote: »

You seem compelled to tell me that he privately slagged me off to you.

Now why would you think that i wonder?

Was obviously a misjudgement by him to think that someone like you could be trusted to hold in confidence any remarks he made to you privately, but you are quite right, I wouldn’t be interested.

Is personal abuse the way you get your kicks? As you will note if you read it properly I haven't divulged anything he said except those remarks about me.

The only point I was making was that, in the posts of his I read, he was very strongly opposed to selling investments on commission – hence his name – and shouldn't be bracketed with the commission-based IFAs on this board who were opposed to any change.

And the point I was making was that this wasn't always the case.

However if you feel the need to hold up an IFA who has been banned for being abusive to other forum users as some sort of shining example to all the other IFAs posting here, then go for it.

You say “some of RDR”. If you have now changed your mind and think that the FSA’s attempts to control “commission bias” by banning commission on investments and to require higher qualifications than a level 3 QCF then that’s progress I suppose.

As I have always said that i agreed with "some of RDR" as you correctly quote, I am intrigued as to how this is changing my mind.

No we aren’t. HL's charge for trackers has nothing to do with RDR. The charge was introduced because a high proportion of their clients are now choosing tracker funds that pay minimal or no trail.

Don't kid yourself.

Funds that pay no trail commission now won’t pay trail any after RDR so their position will be essentially unchanged. It’s those funds that currently do pay trail commission that will change and come RDR HL will have to completely change their charging structure for them. Trackers can be had at the same price as before either directly from the managers or from other sources.

Exactly. Cofunds and Fidelity have already announced plans for their unbundled models. Cavendish Online that rebates all of that trail commission from Fidelity and Cofunds will have to change as there will be a platform fee instead that won't be rebated. HL have now dipped their toes into the water with fees for trackers - let's see how the client reacts before we go further I suspect.

Point is that for the small investor ( and quite possibly the DIY investor) charges will rise.

Don’t believe all the misinformation put out as scare tactics by IFAs trying to derail RDR.

I don't. However I also don't believe all of the hype that all of RDR will be everything it is touted to be either.

Basically until after 2013 and the platform review, I will keep an open mind.

atush

psychic_teabag wrote: »

I'm not sure anyone is claiming such a thing. But not everyone is able to construct such a portfolio themselves.

This is just SO true. I try to inform froendswho are rencetnly divorced how to set up bank accts, apply for credit int heir own name, and to save and invest. and it is Bloody hard, as many are just completely clueless. One I know I gave her foms to fill out to reclaimtax paid on a SA as she hadn't filled out form R85, but a year later and she hasn't done it.

oldvicar

I've just finished reading to the end (so far) of this thread, and over recent months I have read others in a similar vein.

I want to thank all the posters - the IFAs, their supporters and their detractors - for an illuminating experience.

By default I been a DIY-er on investment matters so far. I have never consulted an IFA, but often I have wondered what I am missing out on by not doing so. I now think that I know what I have been missing.

Seriously, to pinch gadget's phrase from post#144, I used to believe that an IFAs main role was to sprinkle the 'magic pixie-dust' over people's investments. At its simplest, stock-picking (pooled investment picking) if you like. I thought that what IFAs were all about was seeking out-performance against an average or benchmark, and each other - but that's what fund managers do, right? My dilemma, and the reason I haven't consulted an IFA, was therefore the almost impossible task of choosing an IFA with the best 'magic'.

I have learnt here that IFAs (and maybe the FSA) view their role as evaluating attitudes to risk, understanding investment aims, and constructing a 'balanced portfolio' accordingly. Maybe at the tail end of the process, when selecting investments, an IFA does demonstrate his flair or magical power - or that might just be wishful thinking on my part.

I don't normally consider myself stupid, quite the reverse actually, but I wonder if my original misconception about what an IFA is for/does is widespread. Do the IFAs here often experience with new clients that they come to them seeking the 'magic', and then have the uphill struggle of (trying to) explaining what they really do?

2010

I`m afraid IFA don`t have "magic pixie dust" and to be fair no one does.
As posted in the past, they can only look backwards at performance, hoping the same product will continue to perform well in the future.
Of course, this doesn`t go to script most of the time.
If you come on here and present facts and figures which the IFA don`t like, you`re either a troll or the source of the facts/figures are "unreliable".

IFA are like many other so called "professionals", basically they`re out to feather their own nests.
It`s pretty obvious, except to them, that if one product offers you £5k commission and another only £2k, you would recommend the one giving the higher amount.
There are hundreds of thousands of cases of mis-selling to prove my point.

darkpool

It is interesting that the vast bulk of the pro IFA comments come from ........IFAs

There seem to be few customers of IFAs here singing their praises.

qpop

oldvicar wrote: »

I've just finished reading to the end (so far) of this thread, and over recent months I have read others in a similar vein.

I want to thank all the posters - the IFAs, their supporters and their detractors - for an illuminating experience.

By default I been a DIY-er on investment matters so far. I have never consulted an IFA, but often I have wondered what I am missing out on by not doing so. I now think that I know what I have been missing.

Seriously, to pinch gadget's phrase from post#144, I used to believe that an IFAs main role was to sprinkle the 'magic pixie-dust' over people's investments. At its simplest, stock-picking (pooled investment picking) if you like. I thought that what IFAs were all about was seeking out-performance against an average or benchmark, and each other - but that's what fund managers do, right? My dilemma, and the reason I haven't consulted an IFA, was therefore the almost impossible task of choosing an IFA with the best 'magic'.

I have learnt here that IFAs (and maybe the FSA) view their role as evaluating attitudes to risk, understanding investment aims, and constructing a 'balanced portfolio' accordingly. Maybe at the tail end of the process, when selecting investments, an IFA does demonstrate his flair or magical power - or that might just be wishful thinking on my part.

I don't normally consider myself stupid, quite the reverse actually, but I wonder if my original misconception about what an IFA is for/does is widespread. Do the IFAs here often experience with new clients that they come to them seeking the 'magic', and then have the uphill struggle of (trying to) explaining what they really do?

The general perception of the regulator is that an IFA (or Financial Planner as the industry bods seem to prefer) revolves around ISO 22222;

http://www.standardsinternational.co.uk/%5Ciso22222.html

The core six steps of the personal financial planning process are:

• Establishing and defining the client and personal financial planner relationship
• Gathering client data and determining goals and expectations
• Analysing and evaluating the client's financial status
• Developing and presenting the financial plan
• Implementing the financial planning recommendations
• Monitoring the financial plan and the financial planning relationship

To support the high level benchmark of best practice sits the requirements of:

• Ethical behaviour and financial planning
• Information security, client confidentiality and data protection
• Risk management
• Continual improvement

There is a misunderstanding by the loud minority on this forum about this, but there' no point trying to explain this to them.


Clients aren't stupid, are aware of costs, and accept them, otherwise they wouldn't be clients. They pay (and are aware that they pay) for delegation of a variety of things; one of which is investment management (which, contrary to the belief of darkpool et al, isn't something everybody can be bothered to learn), but others include administration (particularly pension administration), ensuring tax efficiency, general savings/investments/"future planning", and myriad other "added value" services.

darkpool wrote:

It is interesting that the vast bulk of the pro IFA comments come from ........IFAs

There seem to be few customers of IFAs here singing their praises.

It is not at all interesting to note that the vast bulkof IFA-bashing stems from a list of usernames that can be counted on one hand.


Oh, darkpool, we're still waiting on you to put your money where your mouth is, with relation to your direct investments. Are the spreadsheets taking that long to fabricate?