is it worth seeing an IFA? or are they a rip off?

jclm_2

i have been advised on here to see an IFA as i would like advice on getting life assurance (before the hikes next month). my hubby is sceptical of IFAs and is worried they are on commission and won't give us independent advice and we will be ripped off . i'm worried that time is running out and that if i choose myself i might choose the wrong one (i don't have a lot of time with a baby and toddler to look after).
advice please!!!

greatgimpo

I know an IFA who recommends (for example) the mortgage that would give her the best commission.

ACG

IFA's give you the option of paying a fee or them receiving commision.

Im a Mortgage Advisor (im whole of market NOT independent), i dont offer the option of charging a fee, i just receive the commission so if you are prefering to pay a fee you may need an independent advisor.

I cant imagine you wanting to pay a fee (probably a couple of hundred pounds). Might sound like a lot, but were putting our name next to the advice we give. So if it turns out to be bad advice you have some cover. There is also a good 4-6 hours work - potentially more.

ACG

greatgimpo wrote: »

I know an IFA who recommends (for example) the mortgage that would give her the best commission.

We have to justify the advice we give. Whilst it can probably be manipulated to some extent if they were ever caught doing it that would be the end of their business. For the sake of what is probably an extra £50 at best, its not worth the hassle.

jclm_2

it sounds like paying the fee is the better bet? or else i'd be worried that they might be offering dodgy advice? never done this before so not really in the know

Aegis

greatgimpo wrote: »

I know an IFA who recommends (for example) the mortgage that would give her the best commission.

Please report people like that to the FSA, that sort of behaviour shouldn't be allowed. If you have good evidence, then you should be able to make their compliance visits much more unpleasant.

ACG

I used to be an account manager at a life office.
i would say i only came across one advisor (out of about 400-500) i wouldnt go near with a barge pole.

In the main they are all very good.

Its entirely your decision but the difference in commission between the highest paying and the lowest paying isnt that much. the advisor also has to write you a letter informing you why they chose that policy...theyre not allowed to choose it based on the amount of commission paid.

Were talking about life insurance. Life Insurance is life insurance in the main so if theyre not getting you the cheapest policy there has to be a good reason for it (there can be good reasons for this - health issues, extras that come with the policy etc).

You can also ask to see their research if you like. I would be a bit surprised if a client asked to see that, but i wouldnt mind in the slightest.

Also if they dont mention trusts to you - ask them about it. Well worth having the discussion.

Wutang_2

jclm wrote: »

i have been advised on here to see an IFA as i would like advice on getting life assurance (before the hikes next month). my hubby is sceptical of IFAs and is worried they are on commission and won't give us independent advice and we will be ripped off . i'm worried that time is running out and that if i choose myself i might choose the wrong one (i don't have a lot of time with a baby and toddler to look after).
advice please!!!

What does your husband do for a living?

(Honestly) it sounds like he is up to no good himself and it might be worth have a mooch. Are you older than he is?

Wutang_2

Aegis wrote: »

Please report people like that to the FSA, that sort of behaviour shouldn't be allowed. If you have good evidence, then you should be able to make their compliance visits much more unpleasant.

You have to say Financial Services Authority !!!!!!.

People who do not correctly disclose their regulatory status should be reported to the Food Standards Agency.

:mad:

dunstonh

I know an IFA who recommends (for example) the mortgage that would give her the best commission.

Most IFAs dont do mortgages. It isnt worth the cost of the licence to waste it on mortgages. They typically employ mortgage advisers. I know a few dozen IFAs and only one does mortgages himself.

Also, if you employ them on independent basis, they have to do it fee based with commission rebated. So, it suggests that the person is not being employed on independent basis but whole of market basis. Plus, most lenders typically pay around the 0.3% mark. There isnt wide variations. So, no logic to pick a lender with different commission rates.

it sounds like paying the fee is the better bet? or else i'd be worried that they might be offering dodgy advice? never done this before so not really in the know

For investment class business, fee option is the only method from January (although it has realistically been that way for some years now). it is not being extended to insurance but can make sense on large premiums. Mortgages, can make sense on medium to larger amounts being borrowed.

is it worth seeing an IFA? or are they a rip off?

IFAs are the dominant retail distribution channel. They are responsible for millions of transactions a year. Yet account for just 1% of complaints at the FOS (under 3000). According to FOS, the majority of those complaints they see are rejected and the FOS has the view that IFAs are very good and fair at complaint handling. (just last month, the FOS chief executive praised IFAs over complaint handling in front of the Treasury Select Committee)

So, if IFAs were a rip off, wouldn't the complaints stats reflect that?

ACG

Shes looking at Protection dunston not mortgages.