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

dunstonh

In post 47 Aegis makes clear he receives no money for posting here. Perhaps you could make a similar statement?

Perhaps you could answer who would be making such payments and for what reason?

doughnutmachine

dunstonh wrote: »

Perhaps you could answer who would be making such payments and for what reason?

perhaps your professional body are paying you? perhaps your professional body want people to visit IFAs?

all I know is that most professionals cant sit in front of a computer and post on internet forums all day.

I asked you a straight question and I would have appreciated a straight answer.

opinions4u

I spend far too much time on these pages. My wife watches telly in an evening. I browse a handful of Internet pages passing views that people may or may not give a **** about.

I do it because the subject matters interest me, I have a level of generic expertise in certain things and unless there's a ball being kicked / hit on the telly I rarely watch it.

I don't get paid by MSE. I probably should get treatment for Internet addiction.

If dunstonh is trying to drum up business for the IFA fraternity he approaches it in a strange way. Direct style, occasionally blunt, occasionally confrontational.

If it's a sales pitch, he's bloody awful at it!

Daniel54

doughnutmachine wrote: »

perhaps your professional body are paying you? perhaps your professional body want people to visit IFAs?

all I know is that most professionals cant sit in front of a computer and post on internet forums all day.

I asked you a straight question and I would have appreciated a straight answer.

Am I the only one who thinks Mr Doughnut is making himself look silly ?Either make a positive contribution or tell us how you would handle issues such as a pension valuation and transfer,on which the likes of Dunstonh are able to provide informed advice

i am not an IFA

MarcoM

Aegis wrote: »

There are a few different issues here. The first is benchmarking, i.e. comparing the performance of one IFA or investment manager against another. This is the main reason why you might consider appointing several advisers to look after your portfolio for you, and in theory it's not a bad idea if you don't have a personal referral to go by. On the other hand, you could instead ask for a composite benchmark of some sort against which your performance is measured. The Association of Private Client Investment Managers and Stockbrokers (APCIMS) have a series of benchmark portfolios for different risk profiles (though these are made up of indices and therefore don't account for charges), or you could use one of the sector averages such as the ABI Mixed Investment averages. If you are using a discretionary manager, there's also the option to benchmark against the Asset Risk Consulting (ARC) peer group analysis to see how you are doing against the majority of similar investors.

The second issue is cost. In my view, decent IFAs should either cap their fee at a certain level depending on the complexity of your portfolio or should operate a sliding scale of charges. In other words, investing £2 million with one IFA shouldn't be exactly four times the cost of investing £500,000 with the same IFA. Economies of scale start to come into play here, which means that splitting up the portfolios can cause some significant unnecessary costs to come into play.

Finally, as mentioned by dunstonh above, it would be fairly tricky to divide your assets and allowances between several IFAs. One of the core aspects of an IFA's service is implementing a strategy by which you can reduce tax, which requires the use of pensions, ISAs, insurance-based investments and other tax-efficient investments to maximise your overall return. This becomes very tricky when assets are shared between advisers unless it is clearly agreed at outset who will manage which allowances. Even then, you would certainly not achieve even close to the optimum strategy if each adviser is in the dark about precisely what the others are doing and when.

In short, there are pros and cons, but it's likely far better to use one good IFA than to pit several against each other.

What you might want to do is get in touch with a few different IFAs and ask them to pitch for your business, preferably in person rather than just in written format. You then have the opportunity to ask loads of questions and decide which firm/adviser you want to look after your portfolio for you.

Take loads of notes and report back if you want any feedback!

The problem would be to identify a list of questions / issues to ask each ifa when pitching for you. I mean some ifas may be more competent on products rather than tax or vice-versa.

Or, could I assume that for that sort of figure I could / request expect an IFA to consult with a separate tax advisor as part of the service?
Maybe the best option would be an ifa who has best knowledge of investment products but who also makes use of other experts ie. tax advisers rather than someone who is a good all rounder taking the whole project on by himself.
From a customer point of view it could be that paying an extra 5k 10k to a tax adviser is better than not involving one at all...

SnowMan

MarcoM wrote: »

The problem would be to identify a list of questions / issues to ask each ifa when pitching for you. I mean some ifas may be more competent on products rather than tax or vice-versa.

That was something that was mentioned in section 6.5 of the July 2013 NMG report that was commissioned by the FCA you can find a copy here.

To quote from 6.5 of that report

There is some argument that a set of simple questions, which consumers should feel they know the answer to before agreeing to work with an adviser, would increase understanding significantly. Because the documents tested often answered questions that participants didn’t know they needed to know the answers to, these questions would provide a ‘starter for ten’ in understanding the advice world as it applies to individual consumers. In short, these questions would need to address:

•Whether the adviser is providing advice based on all the products in the market, or is the adviser restricted in anyway?
• What type of investment service / mortgage service / pension service / etc. does the adviser offer?
• When you first approach an adviser for help, what are the stages of the process that the adviser will take you through to get to a personalised solution?
• When do costs start to be incurred?
• What is the approximate cost of setting up a new investment?
• What kind of on-going or monitoring services does the adviser offer?
• How is the on-going service paid for?
• What is the approximate cost for the on-going service?

Aegis

MarcoM wrote: »

The problem would be to identify a list of questions / issues to ask each ifa when pitching for you. I mean some ifas may be more competent on products rather than tax or vice-versa.

I don't think there's a way to separate those out. You can't be good at tax without understanding the way that products impact on tax, so you're likely either good at both or neither.

Or, could I assume that for that sort of figure I could / request expect an IFA to consult with a separate tax advisor as part of the service?

Absolutely - I work with my clients' accountants wherever possible.

Maybe the best option would be an ifa who has best knowledge of investment products but who also makes use of other experts ie. tax advisers rather than someone who is a good all rounder taking the whole project on by himself.

I think my comments above already address this - i.e. that you can't truly be good at products without also being good at the tax position before and after using those products.

From a customer point of view it could be that paying an extra 5k 10k to a tax adviser is better than not involving one at all...

I'd hope you can find a personal accountant for a considerably lower annual fee than that!

jimjames

grizzly1911 wrote: »

IMO financial advice falls in the relatively easy camp although I don't dispute that others don't have a clue. I can change the oil in our cars but choose not to. Brain surgery or even eye surgery falls in the difficult camp.

Same for any occupation, if you have the skill to do it yourself then why pay someone else unless you are rich but time poor. I could have got a tree surgeon into cut down a tree today but chose to DIY. Maybe took longer and more hassle but something I am capable of doing. I also manage my own finances without an IFA but can fully see why someone less interested would want to get a professional opinion on what they should be doing if they don't have the time or inclination to do it themselves.

bowlhead99

doughnutmachine wrote: »

I have to admit I would struggle to pay someone educated to first year degree level thousands of pounds each year to look after my financial assets.

Me too, and I don't.

But a) I presume the "first year degree level" is not a maximum and you would be free to seek out a person with higher qualifications ;

b) but having sought someone who has spent time sitting exams to help their personal marketing rather than improving their interpersonal and communication skills, they may be less able to have a great conversation about what you really need and what risks you could handle. Whereas 20 years of personal investment and advisory experience might allow the other adviser to provide awesome advice whether or not they have passed an exam.

Filing your small business accounts, an FCA might be prestigious and cost more than a chap with a bookkeeping certificate, but may produce a worse result if he forgot to check the case law that says Jaffa Cakes aren't VATable. The bookkeeper does several Vat returns a week and has an idetic memory. So qualifications aren't everything.

c) of course, if you personally don't have any qualifications in finance, you have done 0% of the structured and verifiable training that they have. If I had never been in a swimming pool before and found myself pushed in the deep end I wouldn't be too proud to allow someone with their bronze 10-metre swimming badge to stop me drowning.

Another analogy, if you want to someone to act as a ringer on your son's school football team you can get someone who has a sports science bachelor degree and teaches PE, or someone who is a master heart surgeon by day and used to be a referee in Sunday League, or someone who dropped out of their A-levels to focus on their hobby and passion which is captaining an amateur football team.

The one with the most paper qualifications in the field of how the human body works might not be the one best suited to the specific task you have in mind (applying the knowledge to dive and save a penalty) but he knows the theory. And all three of them might be better able to keep on their feet for 90 mins than you down the wing because they have focussed on their health over the years.

You could of course DIY but if you have never played a game of football or heard the rules, you are at a disadvantage. And if you take some time out to learn the rules and practice ball juggling you might have wasted half the season - when you could perhaps have just thrown a bit of cash at the problem and achieved the result you and your heirs were looking for that year.

In such a situation, you don't need to spend any money and even if you do spend money your team might not win. They might just be better positioned to win than they would otherwise have been. So some people DIY, some people buy. Some insource, some outsource. Some look for qualifications, some ease of access, some get taken in by a slick and charismatic marketing pitch. It's a free market.

The fact that bad IFAs exist doesn't mean that thousands aren't helped by them, but conversely the fact that thousands are helped by them doesn't mean you or I are foolish not to hire one ourselves. We may not value the help, and simply not buy it. It takes a special type of person to come onto a forum to complain that the help exists, or that it's more expensive than we would like even though we aren't buying any of it.

doughnutmachine

opinions4u wrote: »

I don't get paid by MSE. I probably should get treatment for Internet addiction.

If dunstonh is trying to drum up business for the IFA fraternity he approaches it in a strange way. Direct style, occasionally blunt, occasionally confrontational.

If it's a sales pitch, he's bloody awful at it!

tbh, I wouldn't mind too much if dunstonh is getting paid. I just think if he is getting paid to be here that it should be public knowledge.

How would someone post that was trying to drum up business for the IFA community? When you post here thousands of people will read the posts, it would probably be better to "play" to the audience of thousands rather than pander to each individual asking questions on this forum.

Usually when someone is accused of being guilty of something they will deny it. Of course there must be some reason why dunstonh can't give a simple "yes" or "no" answer to if he is paid to post here. His paymasters are probably aware that if the general public will hold him in higher regard if they think he donates his time freely.