How can you find a reliable IFA?

IvanOpinion

This is the question I have been pondering for a while. I have always looked after my own accounts but, with an inheritance due to arrive, I need proper financial advice. I do not know any financial advisors and anybody I know who uses one thinks they are 'OK' .. but they really have nothing to compare them with .. their responses are a bit like asking what your doctor is like, you really do not know if they are better than any other doctor.

So how can one find a good IFA that knows their stuff, is not going to take the lazy way out and offer good advice?

Ivan

isofa

https://www.unbiased.co.uk

Finds IFAs in your area.

But maybe a personal recommendation from a local friend or colleague may also help.

Aegis

If you go to www.unbiased.co.uk you should find a lot of financial advisers near you. Book initial consultations with 2 or 3 of them and see if they agree. If they say something you think is outrageous, get another opinion elsewhere.

dunstonh

Avoid the salesforces (large or regional). Salesforce mentality (targets, incentives etc) are not ideal for advice plus it means they also share the commission with the employer so there is little scope to discount.

Go with one that has CAR (customer agreed remuneration). This is the current FSA buzzword for how you should pay for advice in future with IFAs. All NMA IFAs currently work on that basis. What that means in English is that you agree the level of remuneration upfront and regardless of product provider, product, investment type etc, the adviser earns the same initially. The remuneration can either be by cheque with commission rebated/not taken or commission taken to match the fee (most common method).

In a few years that method will be compulsary for IFAs.

passion8

I've just been reading posts about IFAs and searched the web for local IFAs.

If this information appears on their website:

"Not all the products/services listed here are regulated by the Financial Services Authority."

should they be disregarded or is this a common disclaimer?

Thank you in advance.

dunstonh

should they be disregarded or is this a common disclaimer?

The FSA does not regulate all financial services products. That disclaimer just reminds you of that fact. It has nothing to do with the individual firm.

passion8

dunstonh wrote: »

The FSA does not regulate all financial services products. That disclaimer just reminds you of that fact. It has nothing to do with the individual firm.

Thank you dunstonh.

Incidentally, I noticed in your post above that you recommend:

"Go with one that has CAR (customer agreed remuneration)"

Do you know if this acronym is usually included on IFAs websites, or is it money jargon speak?

(I hope that question doesn't look as disrespectful as it appears. I'm baffled by IFAs and websites).

dunstonh

Do you know if this acronym is usually included on IFAs websites, or is it money jargon speak?

It's the phrase that the FSA are saying will be a requirement for professional advisers if and when their proposals go ahead (anticipated 2009). Some IFAs are already working to that basis. CAR is basically agreeing the remuneration up front. This doesn't have to be an explicit fee but also the amount of commission to be taken. Or it can be a fee level offset against the commission. All IFAs already have to offer a fee option where commission is rebated. However, the hybrid option of agreeing the fee and offsetting it against commission is quite popular.

i.e. Investments can pay between zero and 5% commission (typically 3-5% is the usual range of maximum). So, if you were investing £100k you could agree a fee of £1500 and this can be offset by commission. I.e. the adviser only takes £1500 commission with the rest rebated or used to reduce charges.

CAR is all about agreeing the fee and/or commission upfront so you avoid the potential for perceived commission bias.

passion8

dunstonh wrote: »

It's the phrase that the FSA are saying will be a requirement for professional advisers if and when their proposals go ahead (anticipated 2009). Some IFAs are already working to that basis. CAR is basically agreeing the remuneration up front. This doesn't have to be an explicit fee but also the amount of commission to be taken. Or it can be a fee level offset against the commission. All IFAs already have to offer a fee option where commission is rebated. However, the hybrid option of agreeing the fee and offsetting it against commission is quite popular.

i.e. Investments can pay between zero and 5% commission (typically 3-5% is the usual range of maximum). So, if you were investing £100k you could agree a fee of £1500 and this can be offset by commission. I.e. the adviser only takes £1500 commission with the rest rebated or used to reduce charges.

CAR is all about agreeing the fee and/or commission upfront so you avoid the potential for perceived commission bias.

Excellent and thanks again dunston.

The reason I'm asking what seems to appear as simple questions, is basically because my husband and myself have, up until now, taken a very simple approach towards money. Work, pay the bills, spend money, and bank the rest type of approach.

We're both retiring early within the next few weeks/months and have left the preliminaries with the accountant we use.

It might be that his next piece of advice to us would have been to seek out an IFA, so I'm not trying to diss the poor bloke , but I thought I'd look around the site and familiarise myself with some of the jargon that's used, and look at all the different options that might be open to us. That way any meetings with an IFA should make more sense to us. And them.

It may be that I've asked the question at the right time, or made us both sit up and take more notice, because only this week my husband had made enquiries with Abbey about investing £250K, which he was told would pay a monthly income of approximately £1,270 gross.

As there's an expected payment of £300K due not long after the £250K, it seemed a lot of money to be tying up in a bank when there's obviously so many other avenues to look at, and more money to be gained, hopefully. Something I've only become aware of since reading this site.

So I'm arming myself with as much information as I can, not only to save money, but to not look as foolish about money as I actually am

I'll search through the other pertinent posts, but for now I'll just say thanks again. Using an IFA doesn't seem so daunting now.