Stocks & Shares ISA's

RickyC_IFSWP

gadgetmind wrote: »

And many drug dealers offer your first twist for free.

I don't get your point.

I was referring to his/her comment: "This I cannot do with a financial purchase.
To discuss my purchase I have an upfront charge. Before any discussion can take place."

This is clearly untrue if most IFAs offer a complementary first meeting.

Your_Hero

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.

You can - it's called DIY. But you went to see an adviser for advice and that is what you are paying for. As Ricky points out, the first meeting/discussion is normally not charged and so this is your time to "discuss your financial purchase" before you buy.

64+ wrote: »

How do I find a good deal,
How do I get a good return on my investment.
If I cannot compare IFA’s?

You can compare and you probably should speak to 2 IFAs to compare (use the 'unbiased' website). They can give you their prices once they've established your personal circumstances and requirements. Unfortunately you won't see prices advertised on shop windows because advice is tailored to you and everyone is different.

gadgetmind

RickyC_IFSWP wrote: »

I don't get your point.

That's because there wasn't one, TBH. Someone might have had the odd drinky ...

bigadaj

RickyC_IFSWP wrote: »

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.

Well that's the ifa side which is fine and you're obviously selling your book so to speak.

The strongest factor in what you've quoted is the 'fear' factor, if you don't consult the 'profesionals' then you're At risk. No ifa will guarantee that he can produce an investment portfolio which outperforms that which an idividual can compile, if you want to do that I'll take you up on it.

The qualifications obviously aren't too onerous though getting better, still not equivalent to a decent degree from a good university in all honesty. Insurance is a cost and an issue for advisers but the charges to consumers are very high.

Visiting an adviser is certainly useful if you've inherited a large sum, or are looking for a pension annuity, but paying £200 an hour to someone who is looking to invest for an isa or even a pension paying in at £50-100 a month isn't going to make economic sense.

Financial advice on an individual basis can only be afforded by, and make economic sense, for those with fairly large sums. For others it makes far more sense to research and DIY, and even then many of those with the larger sums will believe they can get a better deal by cutting the ifa out with that additional level of costs.

I understand that there is a preference for fixed fee work in many instances, which makes sense so long as the scope of work is clear and agreed. Customers should push for the fixed fee option but many don't feel confident to ask or insist.

dunstonh

The strongest factor in what you've quoted is the 'fear' factor, if you don't consult the 'profesionals' then you're At risk. No ifa will guarantee that he can produce an investment portfolio which outperforms that which an idividual can compile, if you want to do that I'll take you up on it.

No-one can compare one hypothetical portfolio with another hypothetical portfolio in terms of performance. However, you could measure it on volatility, suitability, capacity for loss and knowledge. That is what you are getting from an adviser. I cant tell you the number of times I have taken over DIY portfolios and found the DIY offering to be way above the risk level of the individual. It is common for inexperienced investors to go fashion investing and above risk profile. Not all will and some may get lucky with their mistakes and outperform an adviser portfolio set to lower risk. However, some will get caught and lose for more than they thought and it could end up being a costly mistake.

but paying £200 an hour to someone who is looking to invest for an isa or even a pension paying in at £50-100 a month isn't going to make economic sense.

Actually, it can. A number of IFA distributed products are cheaper than the DIY market. Just look at how many people buy Virgin financial products. An IFA can wipe the floor with those and find the breakeven point is just a few years in many cases. If you know what you are doing and know where to buy then DIY can be sensible and cheaper. However, if you don't know what you are doing and where/how to buy then you can actually end up paying a lot more than an adviser arranged product.

Customers should push for the fixed fee option but many don't feel confident to ask or insist.

I have found that to be the most common option for initial advice charge. No-one picks hourly.

RickyC_IFSWP

bigadaj wrote: »

Well that's the ifa side which is fine and you're obviously selling your book so to speak.

The strongest factor in what you've quoted is the 'fear' factor, if you don't consult the 'profesionals' then you're At risk. No ifa will guarantee that he can produce an investment portfolio which outperforms that which an idividual can compile, if you want to do that I'll take you up on it.

The qualifications obviously aren't too onerous though getting better, still not equivalent to a decent degree from a good university in all honesty. Insurance is a cost and an issue for advisers but the charges to consumers are very high.

It's my opinion that you should consult experts in almost everything you do - from seeing a doctor to hiring an accountant to do your taxes to getting a reputable mechanic to service your vehicle. You're taking the conversation off on a tangent here because I never mentioned anything about superior performance and thinking an IFAs role is only to construct portfolios is just ignorant.

Well your comments about an IFA's qualifications are disrespectful to say the least. Considering many IFAs I know already hold a good degree on top of their financial qualifications plus the 35+ hours worth of continuing professional development/studies each year. You must be very highly qualified in your field to make a comment like that though and I don't doubt it for one second - I respect anyone who's willing and capable of learning, including all MSE forum users here. I invite you to enlighten us on the qualifications you have, excluding university studies, for your job and what ongoing studies you do each year. Better still, please let us know if you've taken the financial exams that are merely the minimum to be RDR-compliant.

bigadaj

RickyC_IFSWP wrote: »

It's my opinion that you should consult experts in almost everything you do - from seeing a doctor to hiring an accountant to do your taxes to getting a reputable mechanic to service your vehicle. You're taking the conversation off on a tangent here because I never mentioned anything about superior performance and thinking an IFAs role is only to construct portfolios is just ignorant.

Well your comments about an IFA's qualifications are disrespectful to say the least. Considering many IFAs I know already hold a good degree on top of their financial qualifications plus the 35+ hours worth of continuing professional development/studies each year. You must be very highly qualified in your field to make a comment like that though and I don't doubt it for one second - I respect anyone who's willing and capable of learning, including all MSE forum users here. I invite you to enlighten us on the qualifications you have, excluding university studies, for your job and what ongoing studies you do each year. Better still, please let us know if you've taken the financial exams that are merely the minimum to be RDR-compliant.

Obviously struck a nerve!

Not sure why you'd exclude university studies, relevant qualifications are normally a basis for professional development, whereas this has never been a requirement for IFAs. I'm not aware of any relevant degrees that exist even now which is odd considering the strange things that you can study. Most older IFAs will have come form a background which is primarily sales, frequently from the old tied sales forces, where the primary requirement was to make the sale rather than ensure the advice was appropriate.

I don't have a particular axe to grind with IFAs and if people want to use them that's fine, it's just the cost relative to the benefit for most people. I come from a science and engineering background so it could be that I misjudge how numerically challenged the average person is, but the finance area is filled with unjustified mystique.

It's good that you raise the point about not achieving superior performance but it is something that is implied frequently.

I've frequently advised clients of a course of action that results in lower fees for my company as that was the most appropriate advice and I don't believe this is soemthing that is routinely done in financial services.

Not sure that my qualifications are relevant but a science degree from a top 5 university, masters in engineering from Russell group uni, chartered with continuing cpd, twenty five years experience. Scale of works is obviously different but work in consulting engineering environment, so have PI insurance issues similar to IFAs, but rates of less than £100 per hour.

It's individual choice at the end of the day, but many people complain about financial servcies charging, their problem you could argue when they don't research, compare and ask sufficient questions but if we really are dealing with professionals it should be an element that the client is carefully guided through and explained thoroughly.

gadgetmind

RickyC_IFSWP wrote: »

It's my opinion that you should consult experts in almost everything you do - from seeing a doctor to hiring an accountant to do your taxes to getting a reputable mechanic to service your vehicle.

I use the "experts" here when necessary but also ensure I fully understand what they are doing. (As the Japanese say, "Saru mo ki kara ochiru.")

As a result, the mysteries have melted away and I now DIY most things, including everything on your list.

RickyC_IFSWP

bigadaj wrote: »

Obviously struck a nerve!

Not sure why you'd exclude university studies, relevant qualifications are normally a basis for professional development, whereas this has never been a requirement for IFAs. I'm not aware of any relevant degrees that exist even now which is odd considering the strange things that you can study. Most older IFAs will have come form a background which is primarily sales, frequently from the old tied sales forces, where the primary requirement was to make the sale rather than ensure the advice was appropriate.

I don't have a particular axe to grind with IFAs and if people want to use them that's fine, it's just the cost relative to the benefit for most people. I come from a science and engineering background so it could be that I misjudge how numerically challenged the average person is, but the finance area is filled with unjustified mystique.

It's good that you raise the point about not achieving superior performance but it is something that is implied frequently.

I've frequently advised clients of a course of action that results in lower fees for my company as that was the most appropriate advice and I don't believe this is soemthing that is routinely done in financial services.

Not sure that my qualifications are relevant but a science degree from a top 5 university, masters in engineering from Russell group uni, chartered with continuing cpd, twenty five years experience. Scale of works is obviously different but work in consulting engineering environment, so have PI insurance issues similar to IFAs, but rates of less than £100 per hour.

It's individual choice at the end of the day, but many people complain about financial servcies charging, their problem you could argue when they don't research, compare and ask sufficient questions but if we really are dealing with professionals it should be an element that the client is carefully guided through and explained thoroughly.

My point about excluding university studies was that many people stop learning as soon as they've graduated, whereas in financial services and clearly in engineering, CPD is important in order to continue trading which I'm sure you'd understand.

Yes, you're quite right about the background of financial advisers coming from a more sales-orientated industry, and RDR has gone some way to addressing this. Some of the best IFAs I know and respect are from that generation though, so I guess like with any industry, there are good and bad eggs.

If you simply look at the number of posts across all the forums and the questions asked, I'd say yes you've underestimated the number of people who find finances in general a bit scary and hard to grasp. Like with anything though, as I'm sure you and many regular MSE posters have found over the years, if you invest time into learning you'll inevitably find that finance becomes second nature.

gadgetmind

RickyC_IFSWP wrote: »

I'd say yes you've underestimated the number of people who find finances in general a bit scary and hard to grasp.

The financial industry itself is partly to blame here because there is a lot of mystique and FUD projected around what are a pretty simple set of underlying principles.

People also get scary away from working on modern cars, citing the complicated electronics as much of the reason. What they don't realise is that these electronic systems make diagnosis easier in most cases.

In my experience, the people who are the most inclined to say they don't understand these things are the ones who've made zero attempt to acquire even the most basic knowledge. Is it any wonder they won't understand?