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If you intend to self invest though, then why do you need an IFA?
Because some people want advice on what to do (options, pros, cons, rules®s, taxation, cash flow) but don't need anyone to do the button pushing for them. And, of course, this avoids the 0.5% - 0.75% ongoing fee, which will give future performance a nice boost.
Similarly, some companies (not mine) use management consultants, but the managers handle the ongoing implementation, and the consultants don't get 0.5% of the company's market cap every year thereafter.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 -
gadgetmind wrote: »Because some people want advice on what to do (options, pros, cons, rules®s, taxation, cash flow) but don't need anyone to do the button pushing for them.
But that's not self investing to me. Self investing to me means that you do the research and you make the decisions. Technically a SIPP, as the name suggests, a Self Invested Personal Pension.And, of course, this avoids the 0.5% - 0.75% ongoing fee, which will give future performance a nice boost.
If you don't want ongoing servicing then you would simply tell the IFA that and there would be no fee. The IFA would then make recommendations based on that. There is no requirement now to take ongoing servicing.0 -
Most platform pensions are SIPPs. So, its difficult to see what the difference is.
If you intend to self invest though, then why do you need an IFA?
That's a good question. The honest answer is that I have researched the market as best I can,given that I am not an IFA, and can't decide between two funding strategies. Option 1 would be to use Vanguard Life Strategy Moderate Growth 60:40 fund, which matches my risk profile and option 2 would be to use a SIPP provider like AJ Bell You Invest and initially select funds loosely based on the AXA Wealth Elevate risk profile 5 - balanced.
As this is the first time I will be setting up a SIPP, it is a question of wanting to ensure that I don't make some ghastly mistake during the transfer process and setting up of a drawdown. Also that the reasoning behind my decision making is sound and I haven't missed something obvious. I am quite happy once the initial set up has been completed to take responsibility for the monitoring of my pension.0 -
DancingBadger wrote: »We've now met the third IFA - very likeable, no communication problems, seems on the ball, etc...but, but...
Likeable does not mean effective - personally I would put very little merit on 'likeability' in this situation. The big question is can the IFA handle my affairs effectively.DancingBadger wrote: »He still wants talk in percentages - 2% for the initial work-up and 0.75% ongoing. When we said we preferred an hourly rate he said no problem but the cost of the initial work would probably work out the same as our pensions are "complicated" and will probably take him "at least" five 7-hour days.
This would bother me. If your pensions are in such a mess then I'd suggest you need to take the time yourself to sort that out. You don't need to pay someone to do something you can very likely do yourself.
On the other hand, are they really that complicated that it takes an experienced professional a full working week to untangle them? This is the same professional that will be giving you advice.DancingBadger wrote: »so I'm a bit concerned at the huge time disparity for what appears to be the same job.
I would be too. However, some IFA's might decide they don't want the job and thus quote high which will either exclude them or make it a profitably project. It happens in every area of business.DancingBadger wrote: »Quite apart from the difference in cost, another problem I had with the adviser we saw this week is that he is older than us. This isn't ageism; what we are hoping to do is build an ongoing relationship with whoever we choose.
Again, this would not bother me - while I understand the ongoing requirement, it still is down to the case can the IFA meet my requirements. By the time you get through all this you will be more knowledgable in any case so your ongoing requirements may not be as you see them now.DancingBadger wrote: »I'm not sure how to take this forward.
While I think you can get excellent advice on here, the final decision will be down to you. I would be inclined overhaul your requirements and pensions etc, narrow down the options and then provide the same options to IFA's. The disparity should be comparable and if one is out of sync then that would highlight concern.
This is all about trust.0 -
But that's not self investing to me. Self investing to me means that you do the research and you make the decisions
There are many aspects to investing, and some people are happy to tackle everything, while others need help in some areas.
In my case, I think I've got a good handle on things, but prior to retirement would like someone (Wealth Manager? IFA?) to take a look, make suggestions, review IHT situation, and perhaps discuss asset allocation and sequence risk. However, I'm more than happy to handle portfolio management and all the implementation details.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 -
That's a good question. The honest answer is that I have researched the market as best I can,given that I am not an IFA, and can't decide between two funding strategies. Option 1 would be to use Vanguard Life Strategy Moderate Growth 60:40 fund, which matches my risk profile and option 2 would be to use a SIPP provider like AJ Bell You Invest and initially select funds loosely based on the AXA Wealth Elevate risk profile 5 - balanced.
As this is the first time I will be setting up a SIPP, it is a question of wanting to ensure that I don't make some ghastly mistake during the transfer process and setting up of a drawdown. Also that the reasoning behind my decision making is sound and I haven't missed something obvious. I am quite happy once the initial set up has been completed to take responsibility for the monitoring of my pension.
I was in a similar position to you last July. I read a couple of books, sought advice on here, then interviewed 3 or 4 IFAs. I then commissioned one of them to set me up with a portfolio on the A J Bell platform for me to manage. By 'manage' I mean rebalance annually. I paid the guy a one-off fee of £800.
That approach worked well for me - I wanted an expert to look at my proposed approach and do the (to me) tricky business of setting up a portfolio. If I want further advice in the future (eg, as I near retirement) I'll go back to him and pay for an hour or two of his time.
Incidentally, I also couldn't decide between two different approaches (the Vanguard 60:40 or a portfolio of different funds with the same overall objective and risk profile). In the end I chose a combination - I spread my existing pot across the funds recommended by the IFA and I now drip feed my monthly payment into the Vanguard 60:40). I did my sums regarding fees and am happy that this (possibly slightly eccentric) approach works for me.0 -
I absolutely agree; and I/we are not so dumb as to pay thousands to someone who makes us feel good. The first IFA would be our choice based on his qualifications and our belief that he could do a good job, but he does come across as slightly arrogant.Likeable does not mean effective - personally I would put very little merit on 'likeability' in this situation. The big question is can the IFA handle my affairs effectively.
The pensions aren't in a mess; just in separate pots. All the information we have is current with up-to-date values. OH's flexible retirement might be a complication, but it's not unusual these days.If your pensions are in such a mess then I'd suggest you need to take the time yourself to sort that out. You don't need to pay someone to do something you can very likely do yourself.
The first IFA's quote indicates he would spend eight hours, as opposed to the five or so days the 'likeable' chap seems to think it would take. The first IFA is Chartered and the second holds an ACII qualification, which appears to be mainly insurance related. I wonder if that makes a difference in their respective approaches?are they really that complicated that it takes an experienced professional a full working week to untangle them? This is the same professional that will be giving you advice.
And, sadly, someone will occasionally pay their inflated fees.Some IFA's might decide they don't want the job and thus quote high which will either exclude them or make it a profitably project. It happens in every area of business.
Yes, we think what we need is good advice to get us going and probably ongoing advice for the first year or so, by which time I hope we'll both be wiser and able to manage our own affairs, maybe with an annual review.By the time you get through all this you will be more knowledgable in any case so your ongoing requirements may not be as you see them now.
It's only been a few months since I identified a retirement date for myself and OH decided to work less hours, but I'm amazed at what I've learned so far and very grateful to the people who take time to respond with advice and their personal views/experiences.While I think you can get excellent advice on here, the final decision will be down to you. I would be inclined overhaul your requirements and pensions etc, narrow down the options and then provide the same options to IFA's. The disparity should be comparable and if one is out of sync then that would highlight concern.
That is so true - and this seems to sum it up (obviously with caveats based on individual circumstances):This is all about trust.
http://theescapeartist.me/2014/06/22/is-your-financial-adviser-screwing-you/0 -
But that's not self investing to me. Self investing to me means that you do the research and you make the decisions.
I think you could argue the ambiguity either way but I don't see it as pure as that. Apart from anything else, the customer still has to make the final decision on the advice given. The IFA may have done the research and provided options, but if the customer has to make the final decision then without sufficient knowledge how can they make such a decision. If so they are putting all their confidence in the advice of the IFA, and thus working blind. I would not be comfortable with that.gadgetmind wrote: »In my case, I think I've got a good handle on things, but prior to retirement would like someone (Wealth Manager? IFA?) to take a look, make suggestions, review IHT situation, and perhaps discuss asset allocation and sequence risk. However, I'm more than happy to handle portfolio management and all the implementation details.
I'm in this bracket. I think I have got a good handle on things but I don't know what I don't know!!
So for me, an IFA would be someone who might identify aspects at a deeper level, positive and/or negative, that I won't be aware of as a layman.
The difference now, as opposed to years ago, is that the Internet is a resource for self-education. That is not to say someone should make decisions based on comments on a forum, but people can do the research so they are in a better position of knowledge in relation to their own circumstances.0 -
Sorry but can I jump in here and ask for some advice.
Does this seem like a good price? £600 set up fee and 0.6% ongoing for investing £15000 pa in a shares ISA?0 -
Jimmithecat wrote: »Sorry but can I jump in here and ask for some advice.
Does this seem like a good price? £600 set up fee and 0.6% ongoing for investing £15000 pa in a shares ISA?
Yes, thats fine.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
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