In cash since October/November

waccamole

Well, here's an update.

I've been provided with a copy of a letter dated 4 October, three days after meeting the IFA for the second time when he had made his recommendations. He said he didn't know why I hadn't received it as it had been sent.

The relevant section reads:

"Fund Selection

I have initially chosen to invest all the funds into cash until the transfers have been received. Once these have been applied I will look to change your funds to match your attitude to risk as agreed."

The explanation for this not being done is that once the funds had been received he thought the market was high and that a correction was due so it was not the right time to invest.

This wasn't put in writing and I didn't find out that the funds were still in cash until I checked online myself in mid January ahead of our next planned meeting.

We had agreed to meet again in January to review pension provision because my partner needs to nominate additional pension contributions in February for the next financial year. Also, we wanted to mitigate the effect of the child benefit tax charge for 2013/14.

I retiterated that this was not what I would have chosen to do if I'd known about it even without knowing the markets would rise.

He asked what I would like him to do about it. We have agreed to start to drip feed the funds into the market every 2 months over the next 12 months in 6 equal amounts. He is going to put his recommended fund allocation in writing.

In addition to that I need to consider if there's any other action I could/should take.

W

bigfreddiel

dunstonh wrote: »

Stop being so silly in your responses. They are not helping anyone.

An IFA cannot do a transaction without agreement of the client. That is a regulatory requirement. So, knowing what was agreed with regards to investing and comparing it to what was done is useful for us to know to guide the OP. i.e. if the advice was to invest in xyz fund and it didnt happen then that would be something that could be complained about.

cheers mate - as long as there's an agreement then that's fine

see ya!

fj

bigfreddiel

atush wrote: »

bigfreddie, you seem to know zilch. So go away somewhere and read/learn something. tiresome.

cheers mate - getting rattled - actually you don't need to know very much -as we allk now the market is random and a zero sum game - for every winner there is a loser - the thing is it's impossible to be a winner or a loser 100% of the time

go for a passive low cost approach - don't waste your money on any costs be they of any variety ond watch you small pot grow to a nice big one in 30+ yeras time- remember - even when you retire at 65 you've got another 20+ years ahead of you to be invested

1997 - unemployed

2013 - networth £1.2m plus £20k pension

not a single ifa involved

see ya!

fj

bigfreddiel

dunstonh wrote: »

IFAs cannot time the market. Indeed, most will not even attempt to try. It is futile to attempt it.

All transactions have to be agreed by the client. So, what did you agree?

too true - so why did he - i guess the client agreed without realising!

cheers

fj

redbuzzard

Sack him. Ask for the fees back. You'll never be happy with him will you?

If he had absolute discretion, he should at least have told you what he was doing. If not, he shouldn't have done it.

I find it hard to believe he did anyway - being out of the market guarantees no gain and risks a loss, he would have made sure you were aware if he had any sense? More likely it just slipped, but he can't say that as it's a clear admission of incompetence.

I'd also be establishing whether he has actually acted improperly - if he has, go for the opportunity cost as well.

Perhaps not helpful. I appreciate I can not be in possession of all the facts, and I don't know exactly how an IFA's behaviour is regulated, but I'd be finding out.

marathonic

bigfreddiel wrote: »

as we allk now the market is random and a zero sum game - for every winner there is a loser

I don't know this. So let's say I buy shares in Tesco today. All the money flowing into Tesco through people doing their weekly shopping helps increase their profits - some of this will be reflected in increased dividends to me and more of it would be used to grow the company and/or do share buybacks (thus increasing my share in Tesco as a whole).

The person that sold to me is likely to have made a profit because they bought in the past when prices were lower, collecting dividends along the way, and the person buying from me when I sell stands a good chance of sharing in Tescos future profits and growth.

The adage 'for every winner, there's a loser' would only hold true if the market, including dividends, stayed at the same level for eternity.

And you say 'as we all know' as if it's something that's blindingly obvious and something you should learn in "Investing 101"????

redbuzzard

Depends on your definition of winning. If winning is beating the market, then there are going to be winners, and slightly more losers (the financial services industry & HMRC rake offs skew the odds).

Perelandra

I'm with marathonic on this one- it isn't a zero sum game.

On average, share returns are positive, and higher than inflation. So while there might be "a winner for every loser", the value a winner gets is larger than the value a loser loses...

The underlying assets you're buying into (the business) are generating profits, which means that tomorrow's total value of the stocks is higher than today's.

EDIT: Started writing the above before redbuzzard posted; if by "winning" you do indeed mean "beating the market" (rather than just making a gain), then he is of course correct...

atush

The explanation for this not being done is that once the funds had been received he thought the market was high and that a correction was due so it was not the right time to invest.

This wasn't put in writing and I didn't find out that the funds were still in cash until I checked online myself in mid January ahead of our next planned meeting.

I hope you have this conversation in writing. As it proves you have a mis-selling/compensation issue. If you don't ask for it NOW.

He had to prepare a report, you have to receive it and agree it. You didn't, end of.

Do not agree with anything he now proposes. Ask for an immediate transfer onto another pension outside of his remit, or leave it BUT FILE THE COMPLAINT ASAP. If you agree actions now, you are limiting your possible compensation.

You have a valid complaint here, as he cannot act as he has done without your consent. Period.

taktikback

I wonder if this guy would be getting vilified if the market had tanked by 20% in the last three months? -I think not...

In the midst of the stupid troll comments, there is a valid point being made about the merits of active vs passive investment. Is there any point in actively trying to beat the movements of a randomly varying market through active management, rather than tracking the market in the longer term on the basis that growth must be achieved over the long term..?

Personally, I like the gamble of active management -but then I make my own choices and only have myself to blame...