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Affordable IFA advice
Comments
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gadgetmind wrote: »I think that everyone should read a few books whether they intend to DIY or not as it should let them decide for themselves which approach is best for them.
Also after reading a few investment books if you do decide to go down the IFA route (as DIY is not for everyone) then you should be in a better position to get better value for money/ask the right questions rather than being hood winked by some slick IFA.Never let the perfume of the premium overpower the odour of the risk0 -
Don't be so ridiculous.
DIY investors make mistakes too - we've already seen one DIY investor on this board having lost £20k through investing in shares.
IFAs provide advice not active management.
If you consider that IFAs must manage a few hundred billion pounds worth of assets and charge 0.5% a year for this service maybe £20k isn't that much.....
I think IFAs push punters into actively managed funds so their own fees don't seem so high....0 -
doughnutmachine wrote: »If you consider that IFAs must manage a few hundred billion pounds worth of assets and charge 0.5% a year for this service maybe £20k isn't that much.....
Lol. You compare the costs of over 20,000 IFAs with one DIY investor losing £20k and say that isn't much.
It's a typical problem for inexperienced investors. They jump in usually higher than the risk they can actually live with, lose a large amount by pulling out when their investment drops and never invest again.0 -
One of the best advisers I have known cannot communicate well at all.
Not a particularly useful trait for a salesman.
And what is the problem with that?
It was a response to a PP to show there are ways in which to demonstrate potential performance.
Whether that is sufficient, for a low risk, low reward investment net of costs to justify the switch is another matter.
Would it be easy to justify a fee package if the most appropriate course of action was not to switch?"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
I don't know the answers to your questions but here are a few things to think about
1) what are you going to live off? are you living off benefits or your pensions already or does this 30k have to provide enough for you to live off?
2) how old are you as this will affect things.
3) what is your atitude to risk? are you generally a risk taker or would you be happier with more modest returns?
4) do you have a rainy day fund/access to cash if needs be?
5) what growth rate is the IFA predicting on your portfolio? check whether this is realstic
6) I presume you are looking at investments that provide an income rather than capital growth?
Have you considered leaving it all in cash ISAs? I'm not suggesting you should but merely that is your default position and by doing that you'd get maybe 2% interest and the biggest risk you face is inflation. From this you can compare various options to see which works best for you.
dfMaking my money go further with MSE :j
How much can I save in 2012 challenge
75/1200 :eek:0 -
It was a response to a PP to show there are ways in which to demonstrate potential performance.
Whether that is sufficient, for a low risk, low reward investment net of costs to justify the switch is another matter.
Would it be easy to justify a fee package if the most appropriate course of action was not to switch?
You are paying for advice. So, if the advice is to stay put then the charge would still be made. That is one of the positives of RDR.
For a lot of consumers, seeing things visually works better than words. Showing past performance charts to highlight volatility levels can give the consumer a better understanding of the negative periods than they would if it was put in words. If they know before investing that the investment will go down as well as up and the typical levels that occurred during the credit crunch and dot.com crash etc, then it will not come as a shock when the next one happens.5) what growth rate is the IFA predicting on your portfolio? check whether this is realstic
advisers do not predict growth rates. Example projections may be issued and assumed growth rates used for shortfall planning but there are no predictions.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
There's no point in assuming your portfolio will grow by 10% if similar portfolios/ funds/indexes are only growing at 3%. Depending on risk profile you can get a rough idea of what percentage your money is likely to grow, obviously it can only be based on the past and is not guaranteed but you have to have some idea to work with.
That's what I meant. I might not have worded it very well.
dfMaking my money go further with MSE :j
How much can I save in 2012 challenge
75/1200 :eek:0 -
For a lot of consumers, seeing things visually works better than words.
I had an IFA start drawing pictures for me, but told him that I'd got a strong background in statistics and mathematical modelling, so I was happy to stop dumbing it down if he was.
He then admitted that he'd crashed and burnt at maths. I'm not sure if he meant A-level or O-level.
It was about then that I realised the osmosis only works in one direction and the same is true for knowledge.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
It's obviously a matter of personal choice, but basic education in finance is something that everyone should try and achieve, though scary how many don't, even on these boards reading the loans board does worry me.
It is shocking reading posts that say, "how much interest will I get at 4% on £5000?". Imagine how that lack of knowledge would apply if they were looking at investments. There seems to be a big void in financial education but I'm sure on the whole teachers are no better managing money than the rest of the population so would be limited what can be shown unless an outside body was to assist.People's opinions vary but the big factor is always cost. IFAs will no doubt work for a fixed fee, but it always work back to an hourly rate and the commonly quoted figure of £150-£200 an hour is just excessively high in my opinion
It is interesting to see numbers quoted and the reactions. As an example wedding photographers can charge around £1000 to £2000 and beyond with even the cheapest around the £500-750 level. That involves no qualification or mandatory insurance requirements. It's interesting to see the comparison with the costs of an IFA that need both.Remember the saying: if it looks too good to be true it almost certainly is.0 -
You are paying for advice. So, if the advice is to stay put then the charge would still be made. That is one of the positives of RDR.
Positive for who?
Where there is limited value that an IFA can add, based on the evidence and information provided, would a fee still be justifiable or should the case be turned aside at the outset?
I appreciate your comments about pictures being worth many words to some people. By choosing a period that avoids a down turn, or including only positive results a different picture can be portrayed as can using a mix a values on differing axes."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0
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