Stocks & Shares ISA's

gadgetmind

cashbackproblems wrote: »

it should be based on the value added

There are good reasons why it can't be done this way, some due to regulations, but mainly because it's a really bad way to pay anyone for managing investments over anything other than the very long term.

I have no financial knowledge and did this and my 7 funds are now up over 10% and 2 of the funds gives an income of c£50p/m, just by investing £300 per month for 3 yrs.

The last few years have been very flattering to nearly all investors. The acid test is how your investments perform across multiple business cycles and/or whether they are so volatile that you scare yourself stupid when they drop in value by 40%-50%.

dunstonh

that is a ripoff!! Its almost 10% of your investment for absolutely nothing

Its 5%. Not 10%. And its not for nothing.

a IFA's running cost is no justification for charging a high price

its not a high price.

it should be based on the value added

That would just be silly and more expensive in the long run.

HL website also gives detailed info for each fund and you can see past performance and how long the fund has been going etc.

That isnt how you buy investments.

I have no financial knowledge and did this and my 7 funds are now up over 10% and 2 of the funds gives an income of c£50p/m, just by investing £300 per month for 3 yrs.

And that is why you need to be careful of going DIY if you dont understand the subject.

dale_cotterill

cashbackproblems wrote: »

I have no financial knowledge and did this and my 7 funds are now up over 10% and 2 of the funds gives an income of c£50p/m, just by investing £300 per month for 3 yrs.

Sounds like you probably could have done with advice. 10% is markets generally rising since 2011, doesn't seem a particularly great return. There's a chance you could be may beyond the £950 mark now.

mgarl10024

Firstly, sorry to the OP for derailing the thread a bit.

I threw in the story about the mortgage advisor and fixing the media centre because I thought it was a good example of how it can be difficult to judge the correct fees for work - especially where you are taking advantage of skills and experience being used for something intangible rather than say materials. Even when both of us were coming from similar positions, it still was difficult to judge appropriate fees!

gadgetmind wrote: »

OK, it's a sweeping statement, but I've often found that those who work with their minds tend to look down on the skill sets of those who mainly work with their hands.

In my experience, I find the opposite.
For most trades (take building for example), people from both sides of the fence can easily visualise what a builder does, and can understand that being a builder is a demanding job.
However, as someone who works 40hrs behind a screen writing software, I'll meet many people who simply wont understand what I do - and so they can't relate to it at all.
As a result, I often get mocked by my friends/family with more physical jobs, being told how it is "an easy job" and one where I am "sat down all day" and "just tapping keys". They'll actively scoff when I say that after 40hrs of mental problem solving I am "tired" as all they see is the chair.

As to the OP - it seems that this thread is a little divided. Some who would likely do it themselves think it is expensive, and some that are in the business moreso seem to think it is a fair price.
Perhaps speak with a few IFAs and see how you find them? Remember that price shouldn't necessarily be your primary concern (i.e. a cheaper, incompetent IFA shouldn't be preferred over a more expensive competent one). Exactly how you judge that however I'm not sure!

64+

The problem I see is that I can walk down the high street go into any store discuss something I wish to purchase and get a price.
Go out go into another store and repeat this as often as I like.
Find thebest deal and purchase it.
This I cannot do with a financial purchase.
To discuss my purchase I have an upfront charge. Before any discussion can take place.
How do I find a good deal,
How do I get a good return on my investment.
If I cannot compare IFA’s?
I can see all the arguments from above, and understand there have to be charges.

This will put the cat among the pigeons

gadgetmind

mgarl10024 wrote: »

However, as someone who works 40hrs behind a screen writing software, I'll meet many people who simply wont understand what I do - and so they can't relate to it at all.
As a result, I often get mocked by my friends/family with more physical jobs, being told how it is "an easy job" and one where I am "sat down all day" and "just tapping keys". They'll actively scoff when I say that after 40hrs of mental problem solving I am "tired" as all they see is the chair.

That's pretty much their problem as they don't understand the different kinds of tired

I can be tired after cycling 150 miles in a day, but I've had a blast. Someone can be tired after stacking shelves for 12 hours, and they are probably well knackered. And I can have spent 16 hours handling software/hardware/OS/docs teams across four continents without moving more than my fingers and not have a working brain cell left.

But I know which pays best.

gadgetmind

64+ wrote: »

This will put the cat among the pigeons

Maybe, maybe not.

How do you choose someone to service your car? Or a builder? Or an accountant?

Is it perhaps by their reputation, accreditation and the feel you get when speaking to them?

So, what's the problem?

RickyC_IFSWP

64+ wrote: »

The problem I see is that I can walk down the high street go into any store discuss something I wish to purchase and get a price.
Go out go into another store and repeat this as often as I like.
Find thebest deal and purchase it.
This I cannot do with a financial purchase.
To discuss my purchase I have an upfront charge. Before any discussion can take place.
How do I find a good deal,
How do I get a good return on my investment.
If I cannot compare IFA’s?
I can see all the arguments from above, and understand there have to be charges.

This will put the cat among the pigeons

Many IFAs offer a complementary first meeting to find out exactly what your requirements are and it's also a good opportunity for you to assess if the IFA is competent to do the job.

Providing advice on financial products is slightly different from visiting your local Carphone Warehouse for advice on the latest phone as an example... Not least due to the qualifications required, regulations, liability, research & analysis, time spent, peace of mind (which surely is hard to put a price on) etc.

You're focusing too much on price in isolation without paying due regard to the benefits & value.

gadgetmind

RickyC_IFSWP wrote: »

Many IFAs offer a complementary first meeting

And many drug dealers offer your first twist for free.

Porcupine

64+ wrote: »

The problem I see is that I can walk down the high street go into any store discuss something I wish to purchase and get a price.

But you aren't buying an off-the-peg product, you're buying something tailored to you.

Let's say you want to build a house. You could either buy a book of plans, but if you do that nobody will take liability if they're no good, and they won't be tailored to your situation. Many investment companies have packaged funds like this available, but there's nobody to blame if it later turns out they don't suit your situation.

You could also draw your own design, calling on professionals for specific tasks (engineering drawings, planning permission, bricklaying). You'll save money, but take on all the risk for making mistakes. DIY investing, like bricklaying, requires some understanding before you can do it well.
But if you start by building garden sheds instead of mansions, maybe you can make those mistakes somewhere it doesn't matter so much.

Or you can go to an architect. The architect will listen to some requirements, and ask questions about what you want. You can look at their previous work. That bit is free. But their job is to draw up the plans according to your requirements. You have to pay them for this. If you don't like the plans you can ask them to change them, but you don't get to walk out with the plans without paying.

In each case you should be able to find out the price of advice in advance. But, just like a tin of beans, you won't know the quality until you've eaten them, by which time you can't put them back in the tin.