Drop in well paid using IFA's

2010

FACTS, FACTS, FACTS:

As we draw closer to the ban on commission payments on financial products, which will take effect in 2013, there is growing concern about a rise in the mis-selling of products and fears that some advisers and salesmen are grabbing what they can now.
"I've never seen so many cases of poor advice as I have in the last six months – from advisers 'churning' pension plans to selling unregulated products such as overseas property investments," said Philippa Gee of Philippa Gee Wealth Management. In some cases, she said, advisers were pocketing between 8pc and 10pc of the investment.

http://www.telegraph.co.uk/finance/personalfinance/investing/8946740/Five-investment-hazards.html

This is today`s article and it mentions "churning" which the IFA posters on here (all 2 of them) don`t seem to recognise.

atush

These are articles from different newspapers that MAY contain facts or may not. I haven't read those articles yet, and I pretty much never read the guardian or the Mail unless I get them free at a hotel.

Some have been found to have not been completely factual in the past and often have a political slant depending on readership. Chruning does happen, but not by all and I have never been chrurned nor seen anyone I know churned by IFAs.

And, I always recommend reviewing your investments yearly here, as do many members. And I am not an IFA nor do I have one in the family. Give I do reviews myself, it costs me nothing but time.

jem16

2010 wrote: »

FACTS, FACTS, FACTS

Consumers are being "churned" into different pension products, often with higher charges or risks, to generate commission for their financial advisers, according to Consumer Focus.

http://www.guardian.co.uk/money/2011/jul/20/pensions-retirement-planning

Based on flawed research by Consumer Focus.

To reach such a definitive view on the standards of a profession that numbers around 30,000 you would expect a pretty comprehensive and rigorous piece of research to have taken place. Well, no. Consumer Focus looked at 31 examples of client correspondence emanating from two IFA networks over a 10 year period. What planet are these people living on?

http://www.moneymarketing.co.uk/story.aspx?storycode=1034871&PageNo=2&SortOrder=dateadded&PageSize=10

dunstonh

Why will IFAs not take payment on results? I would be happy to pay a percentage of increase in value above market average over a five year period say, but it appears there is not a single IFA that will put their money where their mouth is. They do seem to expect the client to take all the risks whilst taking the fees no matter how good or bad the advice was.

What is the result being intended?

Lets say you operate 10 risk profiles and have sector allocations adjusted for 3 different timescales. So, you have 30 different sector allocations. Why should an IFA be paid less for a low risk portfolio than a high risk one? If you are concerned about bias, wouldnt that encourage an adviser to try and increase the risk as typically, higher risk portfolios outperform lower risk over the long term.

If you want the adviser to be paid more on growth then you will pay more in charges as growth periods outnumber negative periods. In the last 27 years, there have only been 7 negative years on the FTSE100. So, statistically based on that period, the IFA would have earned more out of you than the current method.

An IFA has no control over investment returns. What will be will be. The IFA can only make sure what you have is consistent with your risk tolerance, objectives and filter options to suit that person. I frequently recommend investment options that I would not use myself and i know full well that they will not be the best returns on the market. They will be the best option for that individual though.

It appears a lot of people on this thread dont actually know what an IFA does but are quite happy to criticise them for something they do not do.

darkpool

dunstonh wrote: »

An IFA has no control over investment returns. What will be will be.

thread dont actually know what an IFA does but are quite happy to criticise them for something they do not do.

i think people criticise IFAs because they sometime charge a lot for not a lot in return.

it seems to me that the work of an IFA could be replicated by an online questionnaire.

Masomnia

Did your wife leave you for an IFA or something, darkpool? You really seem to have a bee in your bonnet.

darkpool

Masomnia wrote: »

Did your wife leave you for an IFA or something, darkpool? You really seem to have a bee in your bonnet.

LOL! my dad changed his pension and some shylock financial adviser got 50k for doing so. then after another year the same adviser wanted my dad to change pension again.

so yeah, i suppose i'm a little bit sceptical of IFAs

atush

Why didn't he complain? Ask for compensation?

a 50K fee on a pension- it must have been a huge one- is Fred your Dad? Good luck on receiving your inheritance.

jem16

darkpool wrote: »

LOL! my dad changed his pension and some shylock financial adviser got 50k for doing so. then after another year the same adviser wanted my dad to change pension again.

Why did your Dad agree to the commission charge? Why did he not go fee basis instead?

I transferred my pension last August and the IFA received not one penny for doing it.

Linton

ILW wrote: »

Why will IFAs not take payment on results? I would be happy to pay a percentage of increase in value above market average over a five year period say, but it appears there is not a single IFA that will put their money where their mouth is. They do seem to expect the client to take all the risks whilst taking the fees no matter how good or bad the advice was.

Which market are you going to use for your market average? If a customer wants a steady and safe monthly income to supplement their pension should the IFA ignore this and go for EM shares because that may provide a higher 5 year return? In your scheme it would do wonders for their income, far better than any 0.5% commission!

Why would anyone take on a job that may pay nothing? I dont know what job you do (if any), perhaps you can let us know and I am sure we can come up with an appropriate metric on which to base your pay to ensure you are actually doing something useful.

I feel another "Ignore" coming on.