Ongoing IFA or not

maximumgardener

Indeed. you have done OK all things considered!

maybe you should consider contacting an IFA say a couple of years before you retire?
start getting your head round benefits of time in the market and pound cost averaging etc
you get more units for your money when prices are down so this is normally a plus !!

also consider maxing out your total household isa allowances . this could be a useful tax free income later on in retirement?

Rayling

Thanks again guys some great info and advice there
I apologise for my utter ignorance in these matters and hope others reading my questions and your fine detailed answers will also learn as I have from all of you
Have a great weekend

bigfreddiel

What I'm getting from this thread is that beyond the initial setup an IFA does nothing else because it's not necessary, and even if they did it's only necessary every few years, say five.

So pay one to set up your investments on your platform. Pay an agreed fixed fee, no more than say £200 and that should be it.

Can't see how it could possibly cost more than that.

Cheers fj

dunstonh

What I'm getting from this thread is that beyond the initial setup an IFA does nothing else because it's not necessary, and even if they did it's only necessary every few years, say five.

Depends on the investments used and the wealth of the individual.

On a rebalance of a portfolio, you get the asset allocation data and the funds need to be researched again to ensure suitability. Rebalancing is best not left that long. However, where using multi-asset funds, you dont need to do that.

Annual ISA allowance use, increments etc

Pay an agreed fixed fee, no more than say £200 and that should be it.

Can't see how it could possibly cost more than that.

The problem is not the cost of delivery. The problem is the cost of liability, regulation and audit trail. If we were not regulated, we could halve our charges over night.

bigfreddiel

dunstonh wrote: »

Depends on the investments used and the wealth of the individual.

On a rebalance of a portfolio, you get the asset allocation data and the funds need to be researched again to ensure suitability. Rebalancing is best not left that long. However, where using multi-asset funds, you dont need to do that.

Annual ISA allowance use, increments etc

The problem is not the cost of delivery. The problem is the cost of liability, regulation and audit trail. If we were not regulated, we could halve our charges over night.

Well this the type of answer I expected, somewhat contradicting things said earlier especially ab it rebalancing, which earlier wasn't required annually. Then stating the obvious about multi-asset funds. Well obviously by their very nature they rebalance automatically (at a cost of course).

Then of course the IFA needs to research funds. Well once researched it doesn't really need to be done again, because you know all about from previous research. All you need to know about are changes which if you're familiar with the funds, and I would expect an IFA to be, otherwise why employ one.

Finally liability, what exactly is an IFA liable for, after all their are no performance guarantees, and it's only advice, you don't need to follow it. Good luck during an IFA, if you lose out after taking advice.

Audit trail, well with all the tools available an audit trail is trivial.

Cheers fj

dunstonh

Finally liability, what exactly is an IFA liable for, after all their are no performance guarantees, and it's only advice, you don't need to follow it. Good luck during an IFA, if you lose out after taking advice.

IFAs provide advice. The advice creates the liability if the advice is wrong.

Well once researched it doesn't really need to be done again, because you know all about from previous research.

We do as its part of the ongoing service.

which if you're familiar with the funds, and I would expect an IFA to be, otherwise why employ one.

Your research needs to be current and up-to-date.

Audit trail, well with all the tools available an audit trail is trivial.

Trivial? I did a rebalance today. Over 100 pages of documents required for the file.

Al.

mania112 wrote: »

Going off topic I guess, because this isn't IFA - but i'm confident Robo will take off. I'm *slowly* building a program for my website to be used for clients who a) want to do it themselves to save a few bps against IFA and, b) have a lower value investment than warrants a full IFA service/cost.

I also hear Nutmeg are struggling, which is a shame because their site looks very smart. Too soon for them, but hopefully they can ride the early years.

Investment systems in the UK tend to be a few years behind the USA, and this is only just becoming viable in the States.

I think it will work best in the UK if Robo still has a face. My idea is that clients will still come into my shop and they will decide which route they want to go down. If simplified advice is right, they will be directed our website.

A lot of work to do, but i'm excited about this Robo-stuff.

Robo is exciting, getting the technology right is challenging and demanding. Many services will come unstuck if they over reach, aspiring to huge sums of assets under management. I'm slowly adding retirement planning and insurance to 5ad and often back up the service with a Skype or FaceTime.

Have we spoken btw?!

Al.

dunstonh wrote: »

Trivial? I did a rebalance today. Over 100 pages of documents required for the file.

This. Knowing (through experience) what to do is easy, validating and documenting it all to protect the client is the expensive, time consuming and onerous part.

bigfreddiel

dunstonh wrote: »

Depends on the investments used and the wealth of the individual.

On a rebalance of a portfolio, you get the asset allocation data and the funds need to be researched again to ensure suitability. Rebalancing is best not left that long. However, where using multi-asset funds, you dont need to do that.

Annual ISA allowance use, increments etc

The problem is not the cost of delivery. The problem is the cost of liability, regulation and audit trail. If we were not regulated, we could halve our charges over night.

all very interesting, but I don't buy it.

Rebalancing is simple, it's just a matter of percentages. And you contradict yourself, early in this thread you said rebalancing wasn't necessary every year! So that's a cost that can be eliminated year upon year.

Fund research, well that takes some effort I guess, visiting all those fund managers. Interviewing company directors, reading the FT cover to cover, checking the latest news on multiple websites. It must be very time consuming, but there again, it wouldn't be hard to imagine the same fund being suitable for many customers depending on their risk profile and objectives. So surely you would share the cost. It's a bit like training people, a course is usually charged by course and not by attendees.

And a 100 page audit trail. Ridiculous, no one will ever read it, the client certainly won't. And I don't believe you actually write it afresh each time, it just a cut 'n paste job.

Just my take on this.

And to finish, let's just consider another part of the financial world. Banking! They just awarded themselves a £5,000,000,000, that's right £5bn bonus. On an industry that consistently loses billions of pounds a year!


Cheers fj

bigadaj

bigfreddiel wrote: »

all very interesting, but I don't buy it.

Rebalancing is simple, it's just a matter of percentages. And you contradict yourself, early in this thread you said rebalancing wasn't necessary every year! So that's a cost that can be eliminated year upon year.

Fund research, well that takes some effort I guess, visiting all those fund managers. Interviewing company directors, reading the FT cover to cover, checking the latest news on multiple websites. It must be very time consuming, but there again, it wouldn't be hard to imagine the same fund being suitable for many customers depending on their risk profile and objectives. So surely you would share the cost. It's a bit like training people, a course is usually charged by course and not by attendees.

And a 100 page audit trail. Ridiculous, no one will ever read it, the client certainly won't. And I don't believe you actually write it afresh each time, it just a cut 'n paste job.

Just my take on this.

And to finish, let's just consider another part of the financial world. Banking! They just awarded themselves a £5,000,000,000, that's right £5bn bonus. On an industry that consistently loses billions of pounds a year!


Cheers fj

Freddie you're unfortunately showing your ignorance again.

I have been critical of ifas but understand the restrictions they work under, and the problem is that the regulatory requirements require a large amount of work. This isn't directly for the client it's for the regulators but also for the insurers, PI insurance is getting more difficult and expensive and one of their requirements is that everything is documented, justified and recorded should there be a claim.

I have some experience of this as an engineering consultant, but fortunately almost all of my work is done on a corporate basis, so far more straightforward than dealing with the public.

Rates for financial advice are high for a combination of reasons, but the fact that you're dealing with the public who will often look at any excuse to try and claim back losses whatever the reason mean that a lot of time is lost in proving, to a high degree of certainty, that the ifa researched the client, their attitude to risk, kept them informed and can justify the selected investments. They not only gave to assume the client is an idiot, but record and demonstrate that they know to what extent they are and realise the risks that have been taken.