Best source of investment advice

Chickereeeee

IFA's do not analyse companies etc. - they analyze YOU to see what sort of investment portfolio would be best for you.

Fund managers are (supposed to) do the company analyses.

C

BananaRepublic

MadMoney wrote: »

Sorry for not giving more details, but I've had little time. I do shares for extra income and would like an investment company to increase my income.

The problem with investing in shares is that you need to do a lot of work to find out about the company, and come to a reasonable conclusion about its future. And that can and will change so you need to know when to sell. Also individual shares are high risk because a company is subject to many unknowns, such as the appearance of a more efficient competitor, or the death of a key employee. I have worked in more than a few companies that could have gone belly up had a key person died, or resigned.

An investment fund, as I hope you know, manages a collection of shares, and the manager and staff do the work for you, analysing companies, examining the accounts, sometimes visiting. The risk is lower thanks to the spread of shares, and ideally they do the research well. So basically you seem to be asking for someone to do that for you. Why not buy shares in an investment fund, in an ISA or SIPP wrapper, instead? There are many platforms that allow you to buy and sell funds within or without a wrapper, and they include tools to research past performance, shares held etc.

Undervalued

bowlhead99 wrote: »

I think the problem with that approach that it is important that the IFA knows all your affairs and what's going on with all your assets and tax wrappers and what your goals are, if they are to properly advise an efficient solution.

The advice might be different, and limited, if they have say 75k of assets to work with instead of 150k and you are going to do whatever you like with the other half without really telling them or letting them take it into account to help you plug a gap in your portfolio. The advice cost per pound put to work would be different and presumably higher if he is only giving the advice on smaller sums. The total platform cost might be higher than it needs to be if it tapers down at larger levels of assets but you want to put your half of the assets elsewhere. And what about the current year ISA allowance, do you get to use that on your 'half' of the portfolio or does he?

What about when he says the iSA should contain more of your overall bonds for tax efficiency instead of equities (or vice versa) and you are both controlling some of the equities and some of the bonds? What about when he recommends rebalancing to something that completely doubles up on something you just bought, are you going to tell him to change it, or change your own bit, or just keep ruining the two structures in complete isolation?

Seems a bit messy.

I can see why some would be reluctant to have an IFA take charge of advising on their whole life if they only wanted to pay fees based on him doing work on a smaller number. But for example, say you have £400k in cash and are cautious so you decide to leave £200k in cash and take advice on £200k of investment. For a given risk profile, I expect he would take more risk with the equities and bonds and real estate etc if he knows you already have £200k risk free cash to reduce volatility.

But is he allowed to do that? Or do you demand he build you a balanced low risk portfolio and not consider the other £200k because you think you'll keep it in cash but you might not and it's none of his business because it's yours and you don't want to expose yourself to fees so you keep quiet about it.

Seems you should either commit to being advised, or not. Or take infrequent pieces of ad hoc transactional advice but perhaps that's even worse in terms of efficiency as he's always chasing his tail trying to figure out how you've messed up the game plan since you last spoke

Yes I agree to an extent.

I wasn't being entirely serious and obviously there are practical problems.

I was thinking more of a situation where after taking care of ISAs, pensions, rainy day cash etc there was a substantial amount left to be invested in a mixed portfolio of a given risk profile. That particular job could be split in two, either between two IFAs or one plus DIY.

Linton

Undervalued wrote: »

.....
I was thinking more of a situation where after taking care of ISAs, pensions, rainy day cash etc there was a substantial amount left to be invested in a mixed portfolio of a given risk profile. That particular job could be split in two, either between two IFAs or one plus DIY.

But what good would that do you? If an IFA gets a 10% rise and your DIY (or a second IFA) gets a 20% rise was yours actually the better portfolio? It could be, but then it could have been the case that your choice took more risks that happened to pay off. Next year yours could drop 20% whilst the IFA's dropped 5%.

In any case your pensions and ISAs should all be regarded as part of your overall portfolio. It doesnt make sense to me to treat them in isolation unless you can give them different well-defined jobs to do - eg steady income, long term growth, or wealth preservation. A "mixed portfolio" doesnt sound that well defined.

The concept of two differently managed potfolios with the same objectives suggests significant risk aversion. Perhaps you are more risk averse than you think? However that risk aversion is better applied to the asset allocation of one portfolio, not having two of higher risk.

MadMoney

I have an ISA shares. I'm looking to make extra money and if a company can do it for me then great.

Also thank for everybody's advice. Really appreciate it.

MadMoney

I have killik & co near me and can anyone tell me if they are any good please?

jimjames

MadMoney wrote: »

I have an ISA shares. I'm looking to make extra money and if a company can do it for me then great.

Also thank for everybody's advice. Really appreciate it.

I'm fairly unclear from your posts what you are looking for.


You can pay companies to trade shares for you but unless you have serious amounts of money then it's likely not to be cost effective. Also there is no guarantee that they'll do any better than just buying a tracker or managed fund at much lower cost.

bigfreddiel

Chickereeeee wrote: »

IFA's do not analyse companies etc. - they analyze YOU to see what sort of investment portfolio would be best for you.

Fund managers are (supposed to) do the company analyses.

C

I think I'm the best person to analyse me.

So from what you say is that an IFA will tell me what sort of investor I am, categorise me in one of say three categories, and then tell me which investments fit that category, but it's down to me to actually pick the investments from that category.

So an IFA does no analysis of the underlying funds, how well they're run and so on.

Sounds spiffing!

Cheers fj

dunstonh

So from what you say is that an IFA will tell me what sort of investor I am, categorise me in one of say three categories, and then tell me which investments fit that category, but it's down to me to actually pick the investments from that category.

No. A tied FA will do the first bits but then present the options available for your risk profile for you to select. An IFA will pick the investments.