Professional Finance people no better than amateurs

atush

Yeah, I remember the rampers telling risk averse newbies with short term investment horizons to pile into gold, then it dropped 10%. I am sure they really appreciated that lol.

Never tell anyone what to invest in (but feel free to tell them you are golden and why).

qpop

But gold is 100% guaranteed to triple in value over the next year...right?

:eek:

Theyarv1

brasso wrote: »

I think part of the problem is that people have an unrealistic understanding of what IFAs offer, or claim to offer. They sell advice and knowledge, and for many people these are valuable commodities. IFAs are not able to predict the future or make guarantees about investment decisions, and nor do they, or should they, claim to.

I've been to see an IFA a couple of times in my life (in my younger days, when I was totally naive about pensions etc), and I also have an acquaintance now who is an IFA. None of these people struck/strike me as being hugely more knowledgeable or insightful than me when it comes to actual investments i.e. choosing funds or equities etc. But it's unrealistic to think that that's what they are there for.

It seems to me that one of the main functions of an IFA is to establish what sort of investor you are, in particular your investment timeframe and risk profile, and then look up this combination of values on a matrix (mental or physical) and identify the investments that fit in and around that intersection. Most people don't have that knowledge, even though it's there if you know where to look.

If you are a reasonably savvy investor, you may not learn a huge amount from an IFA or be very surprised by his/her suggestions. But most people are not savvy investors, or have any interest at all, and are grateful to be steered away from the rocks. So it's a question of expectations. The person complaining about paying £160 an hour forgets that this may well be a typical day's profit (or loss) for a modest investment fund, and could well be the best investment a totally naive investor ever makes -- if the alternative is to listen to the bloke in the pub who insists that the only investment worth making is gold or oil or leaving it in the building society.

My father took me to task recently for paying a garage for some routine work on my car that he said I could have done myself. True, but I really didn't want to spend a weekend in the snow, changing tyres and fiddling with oil sumps with frozen hands. For me that was money well spent. It's horses for courses.

I think this is an excellently written post.

Perhaps you could see IFAs as the paid version of you - a reasonably sophisticated investor for those that either don't want to to it themselves or aren't smart enough to. Yes, they may give advice on things YOU aren't interested in or would see as not so smart, and of course they have to make money hence all the fees. But i am sure many are useful to those people who don't have hours to research lots of different routes to market and ideas, and are glad that someone is able to devise a reasonably simple and straightforward strategy for them.

Now Fund Managers on the other hand....:mad::rotfl:

dunstonh

What should turn everybody away, from any sort of financial adviser, is the total lack of liabilty if the advice is bad.

Although the fact that s/e and partner IFAs have a lifetime of liability on the advice confirms you are wrong.

HelpWhereIcan

DiggerUK wrote: »

What should turn everybody away, from any sort of financial adviser, is the total lack of liabilty if the advice is bad.
..._

I've been paying a fortune for my Professional Indemnity for years ...

Can anyone tell me how to complain about the PI Broker who sold it to me? I obviously didn't need the cover!

DiggerUK

Lokolo wrote: »

You mean like "Put all your money in gold and PBs"? ....

That misleading comment, even with the smiley, could be taken as read by a newbie.
It verges on a cheap insult, to say I don't back my arguments with source material. How helpfull is that from somebody with a uni education?

qpop wrote: »

But gold is 100% guaranteed to triple in value over the next year...right?...

The exact same point made by the author of this thread. Albeit they point out, that the sales patter from those in financial advice, is that long term investments in equities (as in 25 years+) will ensure that your investment pays off.

What they can't handle, is the criticism, as evidenced by the OP's point not being responded to in any proper way, is that they are invariably wrong.
And that somebody like myself with no finacial qualifications, has got it right over the last 5/6 years, by putting my cash in to gold, National Savings Index Linked and holding readies in Premium Bonds for a bit of fun.
..._

DiggerUK

dunstonh wrote: »

Although the fact that s/e and partner IFAs have a lifetime of liability on the advice confirms you are wrong.

HelpWhereIcan wrote: »

I've been paying a fortune for my Professional Indemnity for years ...
Can anyone tell me how to complain about the PI Broker who sold it to me? I obviously didn't need the cover!

What you are talking about, is cover against malpractice, and breaking the rules. What your oponents here are talking about is when you don't give advice that pays off for your clients, and costs them dear. All you have to say is " I followed the rules, broke no laws, did nothing against FSA rules...so tough if you have been sold a crock of rubbish".

None of you have even said what your advice re gold and gold exposure will be when the rules change. That is one thing that gets your goat, because you have been spectacularly wrong in your "opinions" here, and elsewhere; hiding behind the anodyne, "we can't give that sort of advice" for over 10 years now.
So what is the point of calling yourselves any sort of finacial adviser, and then not giving what has turned out to be good advice, if it earns you nothing??
..._

darkpool

dunstonh wrote: »

Although the fact that s/e and partner IFAs have a lifetime of liability on the advice confirms you are wrong.

but what you do is get the clients risk tolerance on a 10 point scale and then use a "model" portfolio provided by another company?

so your "advice" is basically a copy/paste excercise?

darkpool

HelpWhereIcan wrote: »

I've been paying a fortune for my Professional Indemnity for years ...

Can anyone tell me how to complain about the PI Broker who sold it to me? I obviously didn't need the cover!

another IFA? you lot been kicked out of the golf club or something?

Lokolo

DiggerUK wrote: »

That misleading comment, even with the smiley, could be taken as read by a newbie.
It verges on a cheap insult, to say I don't back my arguments with source material. How helpfull is that from somebody with a uni education?

And that somebody like myself with no finacial qualifications, has got it right over the last 5/6 years, by putting my cash in to gold, National Savings Index Linked and holding readies in Premium Bonds for a bit of fun.
..._

My point is very valid. You recommend those 3 investments to everyone without any background into the person.

Gold has been a good investment but it doesnt mean everyone should invest in it. PBs have an average 1.6% return, you can almost double that in an instant access ISA. Thats not a good investment. ILSC are good to a point.

It is rediculous to think you are being helpful by suggesting to everyone these investments only.

Maybe its because you havent had any of this education but you cant expect everyone to be like you and expect the same sort of mindset.