IFA's etc. Has anybody ever been to one that has MADE them money rather than charged

bowlhead99

I've never used an IFA but most of the ones on here seem to say sensible things about investments, pensions and taxes from time to time so I don't doubt they can help people.

Of course, some of the non-IFAs say sensible things too, which helps to prove that at least some people can DIY, as I do, but it doesn't stop there being a market for it.

While I do DIY on constructing my overall investment portfolio and plan my own tax affairs and financial goals, I do also pay for actively managed funds, amongst other holdings. And examples of other things I've paid for in the last month have included a car being serviced, wardrobes fitted, various people to cook me dinner, dry clean a suit, a shopkeeper to source and package meat, vegetables and other groceries and bring them to a store near me with a convenient car park, and some people to play musical instruments and sing at me in an entertainment venue.

If I had the time or the inclination I could use google and youtube and books to find out how to do those things better myself. However I'm not averse to taking money from my own employment and spending it on personalised or commoditised goods and services from others. That's what capitalism is about and I enjoy having the choice.

There are two fundamental flaws in the premise:

"anybody ever been to one that has MADE them money rather than charged them money for something they could have done themselves."

One, that paying money for something you can do for yourself with the requisite knowledge/skills/experience is a bad thing. It is not, if you don't want to get the requisite knowledge to do it as well or better yourself (like me choosing not to try to play guitar), or if you have the capability but don't want to invest your time in it (like me choosing not to spend a couple of hours changing the brakes on my car or cooking a nice roast dinner).

Two, that IFAs are supposed to make you money. Investments make money, IFAs don't. In some cases they can point you to appropriate investments that make money that you wouldn't have otherwise known about. But if an IFA helps you avoid a loss - because you didn't protect your income, or you or your heirs spent unnecessary cash on taxes, or you didn't have a sensibly constructed portfolio for your goals and risk appetite and could have been badly burned by an equities downturn even if a downturn didn't happen this particular year - it might be money well spent.

I agree that some kind of NVQ and a requirement to self-certify some continuing professional education is not the highest barrier to entry of all the professions out there. But plenty of non-professional jobs like hod carriers, travel agents and receptionists don't have any requirement for CPD at all and we don't begrudge them getting paid for doing something for somebody.

You could draw parallels with other professions. Is teaching a 'profession'? To teach maths to ten year olds you need to control and motivate a classroom, and not only know more maths than a ten year old but be able to patiently explain it. The ten year old may not see the value in "this stupid maths class" at the time, nor recommend it to his friends, and to be fair he could probably learn it himself with the help of a family member or more experienced friend.

To sell any kind of advice to adults that they value, you ideally need to know more "stuff" than them in the field in which they're seeking help, be able to make recommendations that are no worse than they would have made themselves, and be able to help them understand the solutions you're proposing. If you can't, you won't get much repeat business. And as a safety net to the public you (or your employer) have to be willing to be sued if you tell them something stupid.

As an IFA, probably much of your continuing education is keeping up with compliance and regulations rather than the fundamentals of tax and portfolio construction which don't change too often, but new products appear and evolve so you presumably need to have someone in your organisation that keeps your head above water by telling you what has changed and what new suitable investments are out there. Similarly teachers keep in touch with government guidelines and new methods of performance management etc more than trying to keep up with what 74 times 187 is this week, which doesn't change too often.

I'll readily believe there are bad IFAs out there just as there are bad teachers. Some of them should not be in the profession and damage its reputation: as is the same in any profession. Seems a bit harsh to say they're all scoundrels though. :cool:

Aegis

bigfreddiel wrote: »

I just love the way ifas get so defensive whenever theres a little criticism

Shocking that - someone says something I believe to be incorrect about my chosen profession, and I aim to correct it.

I don't see why that was even worth pointing out.

also as well as advertising that you're n ifa it would be good topost your qualifications as well.

Ask away. If you ask nicely enough and actually show the barest semblance of common respect, I might even consider obliging you.

Aegis

doughnutmachine wrote: »

I understand the minimum qualification to call yourself an IFA is a "class 4"? That's the equivalent of the first year of university...

Your point being?

Aegis

grizzly1911 wrote: »

Is 3% not typical for average packages? is 0.5% not typical?

You are right that there may be benefits as you suggest like inheritance liability.

If there was no such benefit to be made would you reduce the fee?

As I understand it, 3% is the typical highest charge that should be expected from an IFA, and would only cover the smallest portfolios. For portfolios larger than even as little as £30,000 or so, that fee should start to come down to represent the fact that the work does not increase in direct proportion to the size of the investment.

Of course, the fee should relate to a combination of the complexity and the business risk, so there is always likely to be some link to the size of the portfolio being looked after, but there's no reason anyone should accept (or charge) 3% on, say, £500,000 to invest.

An annual fee of 0.5% is fairly typical, but should again vary depending on the level of ongoing service required.

bowlhead99

SnowMan wrote: »

Originally Posted by doughnutmachine
I always thought some of the IFAs were paid to post here?

I asked that precise question to one high post count IFA directly on this forum a while back. He refused to answer whether he was paid to post here.

So while I don't know, it is reasonable to think that this might be happening.

I think it's quite reasonable to assume that too. If you are good at something there is nothing inherently wrong with using social media to try to show other people that you are good at that thing, and by extension improve the reputation of yourself and perhaps your industry as well as massagng your ego and flexing your brain. It certainly happens on twitter and facebook and blog sites.

And the IFAs do tell us that they are IFAs, so we are under no illusions that they do the things they're talking about, for a living, but that it's not advice, which is fair. As long as you take everything you read on the internet with a pinch of salt, you can't really be hurt by the posts of an IFA on an anonymous forum.

If the IFAs turn out to not really know their onions it will clearly be less valuable an exercise for them or their employer and perhaps embarassing when they get called out in public. This provides something of a quality filter and the people here with IFA sigs generally don't come across as idiots. And if they do know their onions it might help a lot of people which is no bad thing even if they have an ulterior motive. People come to this website for financial information, pick up a free education and in the meantime earn Martin ££ millions. I have no way of monetising my personal posts other than starting my own site, but its fine with me if someone else can get some fruits from their labours here as long as it doesn't dilute the quality of discussion, which it would if there were a lot of them.

Of course, it might be ethically dubious to say they are not posting in a business capacity and then go and follow up all their new business leads through PMs (they must get a bunch, and surely this isnt effectively policed). Perhaps they are even paid by MSE for keeping the forum busy and a useful place to visit and thereby driving MSE traffic generally. But it is not necessarily harming anyone, except other IFAs who haven't cottoned on to the idea of putting themselves out there through social media.

I suppose if one doesn't like the idea of an IFA coming on here and getting respect for his or her musings, one can eloquently explain why they're completely misguided and/or dangerous. I don't see many posters succesfully doing this, despite there being frequent anti-IFA rants.

Aegis

bowlhead99 wrote: »

Of course, it might be ethically dubious to say they are not posting in a business capacity and then go and follow up all their new business leads through PMs (they must get a bunch, and surely this isnt effectively policed). Perhaps they are even paid by MSE for keeping the forum busy and a useful place to visit and thereby driving MSE traffic generally. But it is not necessarily harming anyone, except other IFAs who haven't cottoned on to the idea of putting themselves out there through social media.

I can quite conclusively state that I've never even been offered money by MSE for being here, let alone actually been paid for it.

I've never attempted to generate business here, and I've never met or spoken anyone from this forum in real life (as far as I'm aware). I'm quite happy for my PMs to be checked by a staff member and for this fact to be confirmed, if the rules require it.

If someone approached me at some point in the future and I elect to start an adviser/client relationship with them, I will stop making the above claims, however this would simply be a happy coincidence for me rather than my purpose for being here.

My post history should be fairly available to anyone (poor software search engine notwithstanding - not MSE's fault, a limitation of vbulletin), and my time here should therefore be traceable back to before I decided to become an IFA. I started here looking for investment advice and enjoyed finding out about my options. I decided to become an IFA at least partly because of this forum and its long-term participants.

My first exam success is probably recorded on this forum from around late 2007, just before I got my first job in financial services.

I still post here for three main reasons:

1. I think I can help in some specialist circumstances, and it's nice to repay the community that helped me find my career
2. It helps me better understand what issues are currently affecting the general consumer market at any given time
3. Habit

I suppose if one doesn't like the idea of an IFA coming on here and getting respect for his or her musings, one can eloquently explain why they're completely misguided and/or dangerous. I don't see many posters succesfully doing this, despite there being frequent anti-IFA rants.

I'd genuinely love to see an accurate post explaining why IFAs are so reviled by some posters. All I usually find appears to suggest that because IFAs work in line with their regulations - as set by the FCA - and charge for their services, they are more or less as bad as Hitler (some exaggeration, but it's always fun to invoke Godwin's Law).

SnowMan

Aegis wrote: »

I can quite conclusively state that I've never even been offered money by MSE for being here, let alone actually been paid for it.

I've never attempted to generate business here, and I've never met or spoken anyone from this forum in real life (as far as I'm aware). I'm quite happy for my PMs to be checked by a staff member and for this fact to be confirmed, if the rules require it.

If someone approached me at some point in the future and I elect to start an adviser/client relationship with them, I will stop making the above claims, however this would simply be a happy coincidence for me rather than my purpose for being here.

Thanks. I find that sort of disclosure very helpful.

I would also declare that I just post for fun and to share information and otherwise have no financial interest in posting on this forum that I can think of.

jimjames

The_White_Horse wrote: »

I am always being called and chased by these people and it always involves me paying them. I thought they were supposed to manage my wealth and make me richer, not make themselves richer.

I'm not aware of any IFA operating within the law that would be calling and chasing for business.

It sounds far more like a boiler room scam that are trying to rip you off. An IFA will do what you ask and that should be it.

atush

bigfreddiel wrote: »

I just love the way ifas get so defensive whenever theres a little criticism

also as well as advertising that you're n ifa it would be good topost your qualifications as well.

cheers

fj

That is just, well, plain stupid.

They get so much criticism here, most of it for FAs not IFAs, it is well beyond a little. And most of it a joke.

Then there are the qualifications which has been covered here even today(and as most here now know even if you are simple) has actually been increased recently post RDR.

dunstonh

It does seem that when people post about their experiences of IFAs these experiences are negative.....

IFAs are the dominant distribution channel for regulated financial services. Yet they only account for 1% of complaints at the FOS and most get rejected by the FOS.

but at the same time I honestly think the IFAs have too loud a voice here.

On what basis?

in real life most people I meet say IFAs aren't worth the money.

in real life, most people cant tell the difference between mortgage advisers, tied agents, insurance agents, FAs and IFAs.

I am always being called and chased by these people

They wont be IFAs then as they dont call.