Is there such a thing as a truly independant IFA

dunstonh

If there were no problem with IFAs there would be no RDR, no shift from commission to fee based, no additional training requirements.

The RDR can be traced back nearly 20 years ago when the FA numbers exceeded IFA numbers. It is phase two of what was proposed back then. The biggest problems in the industry have come from tied agents/FAs and non-regulated staff. The RDR has cost around £1.7 billion. You dont spend 1.7 billion in an area where the ombudsman has less than 1% of complaints. IFAs are responsible for millions of transactions a year yet the FOS sees 3000 complaints and rejects most of them.

These changes only became effective this year.

Whilst the rules changed this year, products have been mostly explicitly charged for the good part of 5-7 years.

Therefore it is perfectly reasonable to ask the question 'how do I find a decent IFA?'

It is. However, some of the responses have been farcical and misguided.

BobQ

dunstonh wrote: »

Quote:
But you do have a point that its very difficult for a punter to know if IFA1 with Advice A will outperform IFA2 with Advice B. I would be interested to know what an IFA thinks on that question.
Absolutely irrelevant. An IFA's job is not to outperform. It is to provide advice and financial planning. With investments, it is to ascertain objectives, risk profile, capacity for loss and knowledge and understanding and put in place solutions applicable for that individual. With some that would be using investments that you would never use yourself. Investments that are never going to be top of the pile. To try and attempt that would quite probably be a mis-sale.

I used the word "outperform" loosely as I explained in an earlier post.

I was not thinking about absolute performance of a product but simply saying that the average punter (with all his particular circumstances) cannot really assess the merits of the advice provided by an IFA (compared with that given by another IFA which may be different advice). Clearly you cannot assess the outcome of an investment strategy or of suggested products. You can only forecast and evaluate retrospectively what happens when the advice is followed. In short there are no measures of effectiveness for what the IFA does for the client.

bigfreddiel

the problem with financial people is that they do no take on responsibility or any of the risk - it's always the punters fault and thats why they all have this bad reputation

latest bunch are the pay day loan leeches

cheers

fj

bigfreddiel

dunstonh wrote: »

It is. However, some of the responses have been farcical and misguided.

well you would say that wouldn't you - :T:T:T:T

cheers

fj

dunstonh

the problem with financial people is that they do no take on responsibility or any of the risk - it's always the punters fault and thats why they all have this bad reputation

Wrong. Advisers do have the liability and risk.

GhIFA

bigfreddiel wrote: »

the problem with financial people is that they do no take on responsibility or any of the risk

Why keep trotting this out when it's already been shown as wrong so many times?

ozzage

bigfreddiel wrote: »

the problem with financial people is that they do no take on responsibility or any of the risk - it's always the punters fault and thats why they all have this bad reputation

latest bunch are the pay day loan leeches

cheers

fj

I'm not sure what risk you want them to take on. If an IFA advises on a set of investments and then the market crashes do you want the IFA to be somehow liable?

They certainly take on responsibility for giving incorrect advice, but somehow I sense that's not enough for you.

richardg_ifa

bigfreddiel wrote: »

latest bunch are the pay day loan leeches

Totally different to an IFA though.

doughnutmachine

atush wrote: »

Rubbish, they need to make a living. And they always want the best for their clients as happy clients ight return for something else, or might refer customers.

There is no way an IFA would actually want unhappy clients who lose money.

the thing with IFA customers are that a lot of them are that stupid they don't know if the advice they recieve is any good. so a lot of IFA customers might be ecstatic with a nice colour brochure full of graphs showing them their investment projections - something that some people could do in a few minutes in excel.

using your argument of happy clients = more customers would mean that estate agents and used car salesmen would never con a customer either.... something most of us would realise is not reflective of those professions.

my understanding of game theory and business ethics is that businesses that have a lot of repeat business will not con customers. while a business that people use rarely is more likely to "con" customers. samples of a "repeat business" are local shops and restaurants. while samples of a rarely used business are estate agents, tourist tat sellers and financial advisers...

of course some IFAs will be very professional, but using the argument that "hardly anyone makes official complaints about us" hardly inspires me to use an IFA. i work with people i consider incompetent, no one has complained about them to their professional body, but i would still consider them as being poor at their job

Lokolo

doughnutmachine wrote: »

the thing with IFA customers are that a lot of them are that stupid they don't know if the advice they recieve is any good. so a lot of IFA customers might be ecstatic with a nice colour brochure full of graphs showing them their investment projections - something that some people could do in a few minutes in excel.

What a pathetic response!

Anyone that uses an IFA is extremely thick!? That's a massive generalisation. Just because someone doesn't understand, or doesn't have the inclination to understand the depth of the financial industry doesn't make them thick.

I guess anyone who doesn't know the ins and outs of car mechanics is also thick? And plumbing? And electrics? Because they all do the same thing, provide a service of a particular area.