Professional Finance people no better than amateurs

dunstonh

yeah, they should just go into an IFA without any background knowledge, just accept everything the IFA says and do whatever the IFA suggests....


....if they want to pay top commission.

Why do you keep going on about commission. If you are paranoid about it then go fee basis. That option is available from all IFAs. It is a simple solution. Soon there will be no choice.

darkpool

ehhhhmmmm, 160 pounds an hour ... no thanks

gadgetmind

dunstonh wrote: »

Why do you keep going on about commission.

Because I have never met an IFA in real life who didn't press commission as being the best approach.

If you are paranoid about it then go fee basis. That option is available from all IFAs. It is a simple solution.

It wasn't *me* going to an IFA that was being discussed.

Soon there will be no choice.

Yes, and I think we're going to see some interesting changes as a result.

brasso

I'm not an IFA but I think they offer a valuable service.

There are many things in life that I could do if I had the time, inclination and resources. But like everyone else I make the decision to do some things myself but for most things, I am happy to pay for someone else's experience and knowledge. I don't service my own car or cut my own hair. My neighbour has all his shirts laundered and ironed for him. Seems like an extravagance to me, but there again, I had to buy a washing machine, and I spend valuable time each week ironing! Our choices.

When it comes to investment I have enough interest and education to take my own decisions (insofar as investments can be independent i.e. buying into a fund or a single business is still delegating a lot of decision-making to others).

The great majority of people reading this thread and this sub-forum are those who have an interest - either as a profession or a hobby - in investment. So it isn't a fair cross-section. If you took a random 100 people off the street and asked them to summarise what their investment strategy would be if they had a 100K windfall, I suspect only a small proportion would have a coherent answer, and even among those there would be some very unwise ideas.

So IFAs perform a valuable service for the majority who can't/won't make their own decisions. In the main, they are 'not for us' here on this subforum, though I think their opinions are useful to us all, and offer some insight into how an IFA operates.

Seems to me there are a few here who have a bee in their bonnet about IFAs. If you have a serious complaint against an individual, report them. If you just have a general prejudice, I must say I find it a bit tedious and more than a little unfair on people who are (I'm sure) decent guys just doing their job.

dunstonh

Because I have never met an IFA in real life who didn't press commission as being the best approach.

How many of the 30,000 have you met?

Lokolo

gadgetmind wrote: »

True, but if you know the basics of roping a hog, then you're better placed to know if your hogs are being roped right.

Agreed but not everyone in the industry is out to get you. Only a few. And of course, if you want to protect yourself from these few (as you seem to do!) then you learn a little. I would rather take the risk than have to do something I don't want to (such as learn the ins and outs of a car!)

But I don't see every IFA being as corrupt as darkpool seems to suggest - do you? (given you seem quite the type to not trust anyone I get the feeling I am walking into a trap asking this!)

brasso

gadgetmind wrote: »

Because I have never met an IFA in real life who didn't press commission as being the best approach.

A totally unscientific survey, as I have knowingly met only one IFA in recent times, but funnily enough this subject came up when I was talking to him about his job.

His view (which may well be a minority view, I really have no idea) was that a set fee was his strong preference as at least he was guaranteed to be paid for his time. I presume from that that some IFAs find they give advice and information, only for the client to walk away and buy those products independently. A bit like browsing in Waterstones and then ordering books from Amazon.

gadgetmind

Lokolo wrote: »

Agreed but not everyone in the industry is out to get you. Only a few. And of course, if you want to protect yourself from these few (as you seem to do!) then you learn a little.

I think you're better off learning a little even if you do find a good IFA.

I would rather take the risk than have to do something I don't want to (such as learn the ins and outs of a car!)

Fair enough. I just hate "black boxes" and enjoy shining a light into the recesses.

But I don't see every IFA being as corrupt as darkpool seems to suggest - do you?

No, far from it.

(given you seem quite the type to not trust anyone I get the feeling I am walking into a trap asking this!)

I give people a certain amount of trust up front, and it's then down to them to either earn more or lose what they started with. For me to be able to judge when to add/subtract, I need to have some background knowledge, usually far more than I disclose.

I do this both in business and in my private affairs, and the main time it's gone wrong is when I've made the mistake of being too trusting.

Doveryai no proveryai, as our Russian friends would say.

darkpool

but when you look at the advice IFAs give it doesn't seem particularly good. we saw the widow with 80k to invest, she was advised to buy some bond that had 3% annual charges.

so she would have tied her money up for 15 years and paid high charges, there seem a few posters here that know a fair bit about investment, would any of them make a similar investment? i sure as h3ll wouldn't.

maybe the system forces IFAs to make these recommendations, but the end result is still pretty poor investments for someone walking into an IFA office.

If there were less IFAs on this forum spouting the "IFAs are brill" routine I would certainly be a lot less anti IFA. but as it is i feel i'm doing a public service by acting as devil's advocate... a forum dominated by IFAs and a few well meaning people would not lead to a good website for advice. Or do people seriously think they should trust everything to the IFA and have no background investment knowledge at all?

regarding stuff like the active/ tracker arguments, well i find it hard to believe that any reasonably intelligent person who has actually looked at the evidence could possibly believe that UTs deliver alpha returns on average.

gadgetmind

darkpool wrote: »

i feel i'm doing a public service by acting as devil's advocate

I have no problem with people playing devil's advocate, but I don't think this is what you're doing (not by the usual definition), nor do I tend to favour arguments based on rhetoric rather than facts.

Did we ever get a reference to your widow or is she a rhetorical device like Russel's teapot?