FTSE 100 advice

dunstonh

Correct me if I'm wrong, but IFAs can only sell a relatively small selection of financial products as well? For instance you can't recommend directly held shares or property?

You are wrong. IFAs can recommend anything across the market place. However, an IFA is not a stockbroker or an estate agent. They can provide advice on those assets though.

doughnutmachine

dunstonh wrote: »

You are wrong. IFAs can recommend anything across the market place. However, an IFA is not a stockbroker or an estate agent. They can provide advice on those assets though.

So what advice would an IFA give on shares or property? Would it be along the lines of "these assets are far too sophisticated for an investor like you, you best stick with a mass market unit trust".

I have to admit that I don't see a huge difference between a tied agent (who you always criticise) and an IFA.....

what exactly is the difference between a tied agent and an IFA? you basically sell the same type of products (though admittedly the IFA will have a greater selection). It just seems to me that the criticisms aimed at tied agents could equally be aimed at IFAs.

Stephb1986_2

Reaper wrote: »

Yes, and £6734.50 if you include the estimate for this year.

Note that will not be the surrender value if you cash in early. I don't know what the T&C say but with these sort of plans you would likely be heavily penalised for early surrender. I suggest you leave it to run for the full term.

Strangely enough the letters have just come through the door about year 4 it comes to £6735

Many Thanks

Steph

dunstonh

So what advice would an IFA give on shares or property? Would it be along the lines of "these assets are far too sophisticated for an investor like you, you best stick with a mass market unit trust".

I would not wish to prejudge the advice that may given to every person in the UK.

what exactly is the difference between a tied agent and an IFA? you basically sell the same type of products (though admittedly the IFA will have a greater selection). It just seems to me that the criticisms aimed at tied agents could equally be aimed at IFAs.

Tied agents can have as little as 10 products and are employed under the remit of their tied company. IFAs are employed by the client to give best advice to the client. Product is irrelevant. The service being bought and paid for is advice. However, tied agents are only allowed to provide advice on the products and services they can offer through their company. They are not allowed to give advice on products and services offered from elsewhere other than in a generic nature.

doughnutmachine

dunstonh wrote: »

Tied agents can have as little as 10 products and are employed under the remit of their tied company. IFAs are employed by the client to give best advice to the client. Product is irrelevant. The service being bought and paid for is advice. However, tied agents are only allowed to provide advice on the products and services they can offer through their company. They are not allowed to give advice on products and services offered from elsewhere other than in a generic nature.

it just seems that the main difference between a tied agent and IFA is the amount of products they sell. surely the tied agent will try and sell the most suitable of his ten products to a customer, while the IFA effectively does the same with his similar basket of products... but both of them ignore other mainstream investments like direct shares and property...

if IFAs are selling advice why do they charge like a salesman? it seems like that all this stuff with RDR just means an IFA charges a % fee instead of a % commission.

it seems the going rate for servicing from an IFA is 0.5% a year. So someone with a £1m portfolio pays 10 times as much as a £100k portfolio, does it take 10 times as much effort to look after a £1m client?

I have to admit I would be happier going to an IFA that charged per hour instead of a [STRIKE]commission[/STRIKE] fee

dunstonh

it just seems that the main difference between a tied agent and IFA is the amount of products they sell.

A tied agent cannot give advice on products and services they do not offer (other than generic). An IFA sells advice.

surely the tied agent will try and sell the most suitable of his ten products to a customer

Absolutely. That is why they are referred to as sales reps typically. Whilst RDR does make that concept higher, many are still working that way but in a roundabout way.

while the IFA effectively does the same with his similar basket of products.

Nope. The IFA is paid for giving advice. The product does not provide any remuneration.

but both of them ignore other mainstream investments like direct shares and property...

direct shares and property are not mainstream. An adviser cannot give specific advice on or do due diligence on an individual share or property. That is what a stockbroker, estate agent, surveyor is for.

if IFAs are selling advice why do they charge like a salesman? it seems like that all this stuff with RDR just means an IFA charges a % fee instead of a % commission.

That makes no sense. You agree a fee with the adviser and whatever is recommended, you pay that fee. Nothing to do with product. Commission is paid on the basis of a sale of a product by a product provider. The product provider pays nothing to the IFA.

it seems the going rate for servicing from an IFA is 0.5% a year. So someone with a £1m portfolio pays 10 times as much as a £100k portfolio, does it take 10 times as much effort to look after a £1m client?

There is an element of cross subsidy that still exists. However, charges to typically get tapered as the amount gets bigger. However, yes, a portfolio of £1mill involves more work and has more liability than that of £100k.

I have to admit I would be happier going to an IFA that charged per hour instead of a commission fee

Research has found that the hourly rate is the least desired option by consumers. Fixed fee or percentage based are most popular.

Stephb1986_2

She never discussed fees or commissions etc with us at all

sabretoothtigger

She told me to invest in gold coins that the return was fantastic and I would double my money in 12 months

This is a paradox. You bought gold, you have gold you lost nothing ?

Paying a premium to the raw gold, that could be lost I agree otherwise the situation is unchanged.
Whats probably more correct is the gold was never needed which is true of most people in UK; debtors saving gold would be fairly pointless

The returns on gold are zero for the same reason, its an inert metal element.
If I buy dollars it could be a similar thing I guess, I dont start out expecting to make money from doing so anyhow.
As Im doing nothing with it; sounds like the deals were poorly explained

what advice would an IFA give on shares or property?

They could give great advice. The problem is not usually buying and stock details so much but if the investment is valid and timed well and so on.

I dont need to speak to a guy with a seat on a stock market to deal shares, the rarity is good advice on which shares, companies, sectors or time frame is best suited for a good return.
Correctly done that is priceless, Im sure that could also apply to many products

atush

The FTSE100 peaked at the end of 1999 at nearly 7000.
It still HASN`T got back to that peak.
So if you bought a tracker then, you`re still losing money basically.

This is the usual claptrap from amateur investors who forget there is dividend income.

Teh FTse 100 made money over the period if you take into acct income (esp income reinvested).

sabretoothtigger

Yep there is a graph somewhere, FTSE all inclusive. How would the index look if you never took money out via dividends and its much higher

Still not great but nobody lost money so far as I know. I will look for it later

Its a really important point I didnt quite click on it for years but goto FT.com and on graph page they tell you both growth in share price and growth from dividends. Add them and thats the return

Alot of the tech stocks did not pay their earnings out till recently. Sometimes they buy their own shares which is kinda like a div or one I have POG is issuing shares instead of money. swings and roundabouts


Banco Santander shares lost money over last 9 years
£195.9
http://i.imgur.com/UVsrjy1.png
With dividends made money
£4,162.78 aprox.