MSE News:

dunstonh

Looking at what happened to all the funds, I am convinced it was the right thing to do.

What happened to all the funds?

Mishomeister

thelawnet wrote: »

Intimidating?
Not sure about that.
It's nothing to do with profit. An adviser's fee is not profit, it is the cost of his product. If you went into PC World and there were no prices on the TVs, and you asked 'how much is this?' and they said 'don't worry, we'll skim a bit off your Sky TV subscription', and you said 'how much and for how long?' and they said 'I'm not telling you', you'd probably say 'eff off then, I'm not buying'.

It's not profit, it's the selling price. You could pay £500 for advice to one firm, and £1000 to another, but if the £1000 firm does more work and incurs greater costs, then they make less profit out of you. You have no idea how much profit they are making, but it's not much to ask how much they're going to charge you.....

You know how much they charge you if you go for fee paying option. If you say I want a free advice and I am happy for you to receive commission, it is then not your business what the commission he will get as that will be a separate financial deal between different 3rd parties.

Now my understanding might be a little wrong as whilst being in the banking for some time I never actually had to deal with IFA's that much, but as much as I am aware there is a thing called CLAWBACK. That means if investor invests something through IFA and then changes his mind after couple of months an Adviser will loose ALL his commission.
However if client actually going for an option where an adviser will be paid commission, client is not paying anything for an advice, because an adviser provides it for free. What adviser then does is he sells the business with that client to a fund managers and gets a reward from them.
The main point people are missing here is that customer has a choice now whether he will pay the charge to adviser or he will pay nothing and the adviser will get paid by a fund managers.
So now if based on the customer's circumstances the most beneficial product for customer is the one where adviser will get commission, it is then a win - win situation as customer gets an advice for free and adviser will get the commission.
After this change customer will now have to pay to get the same product

darkpool

dunstonh wrote: »

pathetic response. Is that the best you can come up with?

that's the type of response that puts me off going to an IFA. i think it a disgrace that you're allowed to post your IFA propoganda on a consumer website.

magpiecottage

darkpool wrote: »

that's the type of response that puts me off going to an IFA. i think it a disgrace that you're allowed to post your IFA propoganda on a consumer website.

You overlook the fact that DunstonH was accused of being a salesman when, in fact he charges a fee and thus gets paid the same regardless of what, if anything, he recommends/arranges.

It therefore seems that you and Scotsbob have fallen for your own propaganda that all IFAs will sell in order to gain commission.

DunstonH may have been a bit blunt but frankly if I was on the receiving end of the same lie with the monotonous regularity that he is I would probably get exasperated too.

gadgetmind

magpiecottage wrote: »

all IFAs will sell in order to gain commission.

Certainly not all, but far too many. The FSA have put a stop to this, and not before time IMO.

DunstonH may have been a bit blunt

I don't have a problem with bluntness, or even outright rudeness, as long as it's done with a degree of style by people who actually know what they are on about. Dunstonh ticks both of those boxes.

thelawnet

Mishomeister wrote: »

You know how much they charge you if you go for fee paying option. If you say I want a free advice and I am happy for you to receive commission, it is then not your business what the commission he will get as that will be a separate financial deal between different 3rd parties.

:huh:

Clearly there is no such thing as free advice. They are getting paid, and it's with your money. It doesn't matter how you structure it, somebody has to pay, and it's not going to be Santa Claus.

However if client actually going for an option where an adviser will be paid commission, client is not paying anything for an advice, because an adviser provides it for free. What adviser then does is he sells the business with that client to a fund managers and gets a reward from them.

'A reward'? The reward is the client's money....

The main point people are missing here is that customer has a choice now whether he will pay the charge to adviser or he will pay nothing and the adviser will get paid by a fund managers.
So now if based on the customer's circumstances the most beneficial product for customer is the one where adviser will get commission, it is then a win - win situation as customer gets an advice for free and adviser will get the commission.

Commission comes from your investment. There is no magic pot of commissions. It's a charge by any other name.

After this change customer will now have to pay to get the same product

Not really. If the client is paying, then the investment charges should be reduced to make up for the fact that no commission is being paid.

MoneySaverLog

Pincher wrote: »

I want a real small investor to come forward and say he got good value advice for a ~£250 fee.

FICTIONAL EXAMPLE 3
==============

I paid £250, and the advisor said put the £10,000 into cash ISAs. Looking at what happened to all the funds, I am convinced it was the right thing to do.

Nothing wrong in that, except paying for that advice, if you want to ensure that your capital is not going to be affected by the stock market, granted rates are low though and overtime may not keep up with inflation but at least you're not gambling on the stock market going up over your investment time.

Always remember The value of stocks can go down as well as up

nrsql

Can we have another discussion about thread titles - or is this meant to be about all mse news.

Can it be changed ASAP?

Credit-Crunched

It appears that IFA's are taking quite a hammering, in no other industry is there complete transparant operations and financial dealings.

Examples of industries that make a killing yet go un-touched

Tesco's profit margins on the food that you purchase

the cost to income ration of the NCP car park that charges you £7 for 2 hours parking

Solicitors charging per letter, per call

The plumber that charges £90 per hour when the work could be done in half the time

The builder with no qualifications that undertakes an extension resulting in a structured unsound and dangerous building who has no regulator to answer to.

Yes some IFA's are crooked, find me an industry that does not have an element of them. However there are lots of IFA's out there that have helped a lot of people who have no clue. All you have to do is trawl through the questions on this board to establish that the vast majority of the population know very little about finance and how best to deal with their money. I for one feel that paying for this advice is not wrong, people do not work for free.

Those that are constantly bashing the IFA community, I would be intrigued to know what you do for a living, and if you disclose your profits to your customers, or if you have a life long liability for the products you sell, or if you have to pay personally for ongoing qualifications.

I would like to find on industry that has no corruption in it, other than the church of course :rotfl:

thelawnet

Credit-Crunched wrote: »

It appears that IFA's are taking quite a hammering, in no other industry is there complete transparant operations and financial dealings.

Examples of industries that make a killing yet go un-touched

Tesco's profit margins on the food that you purchase

the cost to income ration of the NCP car park that charges you £7 for 2 hours parking

Solicitors charging per letter, per call

The plumber that charges £90 per hour when the work could be done in half the time

The builder with no qualifications that undertakes an extension resulting in a structured unsound and dangerous building who has no regulator to answer to.

All of these industries tell you how much you will be charged.

The IFA industry now has to do the same thing.

And quite rightly so.

I for one feel that paying for this advice is not wrong, people do not work for free.

Indeed, it's just a shame the finance industry maintained a pretence that they did.

Those that are constantly bashing the IFA community, I would be intrigued to know what you do for a living, and if you disclose your profits to your customers, or if you have a life long liability for the products you sell, or if you have to pay personally for ongoing qualifications.

I am a computer programmer, I disclose my rates to my clients, I have a liability for the software I produce (and insurance to that effect),and I have to pay personally for my ongoing qualifications.

The real question is - how have they got away with it for so long, when any other personal services industry operates in a much more transparent manner.

You try engaging a lawyer without signing a retainer, paying money up front and getting a full schedule of rates. The connect between the service they offer and the money you pay is there. With the IFA business it has not been. Thankfully this is changing....