Financial Industry think their clients are "muppets"?

RonLeroy

darkpool wrote: »

yeah, i do believe a lot of investments IFA recomend have large charges, i'm not saying the IFA gets all the charges though.

but for the consumer it doesn't really matter who gets the extortionate fees.....

You made a good point. IFA charges you and doesn't garantee what your investment overcome the inflation rate or even worse if they put or recommend putting your money into stock and stock fall they do not compensate loses but still charges you.

DiggerUK

MrMalkin wrote: »

That's because there are different types of risk........ The current trajectory of gold coupled with it's traditional reputation as a safe asset seems to have lured more than a few people into believing that it can be both high return and low risk, but I think those people are in for a surprise.

But it isn't even recommended to clients who want long term capital growth, or even capital protection. When it's history shows that it is ideally suited to such a risk profile.

It's historical reputation for never becoming worthless, and always maintaining buying power long term, should at least make it an ideal addition to anybodies long term retirement planning....but again silence.
That's what will surprise the many lurkers who visit MSE, financial advisers who don't advise!
Even down to what will happen after the rule changes come in.
..._

dunstonh

this must be the tenth time i've had to provide the same link to back up the 3% annual charges.

It must be the 10th time you have changed who gets that 3% you seem to believe is normal.

i'm just surprised that someone that makes 12% a year on his portfolio needs to spend so much time posting here for the IFA industry....

What gives you any right to say who posts on this site?

You made a good point. IFA charges you and doesn't garantee what your investment overcome the inflation rate or even worse if they put or recommend putting your money into stock and stock fall they do not compensate loses but still charges you.

Why should an IFA compensate for losses? An IFA is not a fund manager. Investments zig zag. That is normal. You use investments with volatility knowing they will be volatile. You pay an IFA to do a job. The IFA has no control over markets.

darkpool

dunstonh wrote: »

It must be the 10th time you have changed who gets that 3% you seem to believe is normal.

What gives you any right to say who posts on this site?

ahhhh, good to see you're type of admitting that some people go to an IFA and get sold an investment that has 3% annual charges.

ehhmmm freedom of expression? I'm sure it says in the Magna Carta that you can post on internet sites even if it annoys the vested interests on the site.

Instead of attacking me why don't you tell people how you make 12% a year? We would all be interested in that.

dunstonh

ahhhh, good to see you're type of admitting that some people go to an IFA and get sold an investment that has 3% annual charges.

Anything is possible. It would certainly not be normal. However, there are plenty of people who go DIY who may be paying that level with no IFA involved.

Instead of attacking me why don't you tell people how you make 12% a year? We would all be interested in that.

I don't know how you make 12% a year. I do not have a crystal ball and as far as I am aware there are no products out that which guarantee you 12% a year. If you know of any such investment then please let people know.

darkpool

dunstonh wrote: »

Anything is possible. It would certainly not be normal. However, there are plenty of people who go DIY who may be paying that level with no IFA involved.

I don't know how you make 12% a year. I do not have a crystal ball and as far as I am aware there are no products out that which guarantee you 12% a year. If you know of any such investment then please let people know.

I'd imagine the average DIY investor pays lower charges than someone that goes to an IFA......

ohh sorry, i thought you said elsewhere that your portfolio had returned 12% a year over decades, it must have been another "dunstonh" that had wrote that.

jem16

darkpool wrote: »

perhaps you would be good enough to share his recommendations?

Will you be sharing his fee?

darkpool

jem16 wrote: »

Will you be sharing his fee?

ehhhmmm no, i was just interested in what he had to say.

dunstonh

I'd imagine the average DIY investor pays lower charges than someone that goes to an IFA......

And so they should. However, it is not always the case. We have seen examples on this board where people have gone to DIY and the solution they picked was more expensive.

ohh sorry, i thought you said elsewhere that your portfolio had returned 12% a year over decades, it must have been another "dunstonh" that had wrote that.

That is almost correct. My own portfolio has averaged over 12% a year. However, that is not what you requested.

Neverland

jem16 wrote: »

...If you want a cheap portfolio of only trackers advised by an IFA then it will be around 0.7%. DIY and it will cost 0.2%. Difference of 0.5% which on a £100k portfolio is £500.

If you had exactly the same portfolio (probably a mix of trackers and active funds as appropriate) as Dunstonh talks about for 1.7% then that would cost you 1.2% if you went DIY. Again a difference of 0.5%.

It's not about comparing the DIY cost of trackers with the advised cost of active funds, so not all black vs white. There are many shades of grey in between.

If you want a long term, rarely to be looked at portfolio with minimal costs, then say so and that's exactly what you will get.

If you feel the IFA will offer extra value in that mix of active funds and tracker funds, then go with that...

Oh dear another poster who can't "do" maths

The real choice you are presenting here is between actively managed unit trusts selected by an IFA and self-investment in index trackers (my choice) and individual shares/bonds (darkpools choice)

The average active managed UT has costs (excluding dealing charges) of c.1.7% per annum (source: http://www.which.co.uk/money/savings-and-investments/guides/different-types-of-investment/are-fund-charges-eating-into-your-returns/) versus tracker funds where you can get funds with TERs around 0.25% (source: http://uk.ishares.com/en/rc/ and https://www.vanguard.co.uk/uk/portal/home.jsp)

Therefore the real annual difference in charges is about 1.4% per annum

Since the FSA tends to ask fund management companies to show returns after costs when the underlying investment returns 5-7% per annum, the average TER on a unit trust is going to be stripping away 20-30% of your investment returns to the fund management industry

With a tracker with a TER of 0.25% per annum, the cost is 3.5% - 5% of investment returns

The benefits of active management are a myth (just one source: http://www.which.co.uk/money/savings-and-investments/guides/different-types-of-investment/active-vs-passive-investment/)

The odds are stacked against an IFA offering any value for an intelligent person willing to do their own research