Financial Advisor Fees

Aegis

DesiBadBoy wrote: »

I tell you what, thats what all people who don't pass the top accreditations say. Perhaps study and practice to the highest standards, then only you can offer the best...no offence intended.

You could say the same to me about pharmacy (my profession). Though don't worry I am suping up my accreditations at university so I'm walking the walk, its not just talk

No half measures in life

Why do you think CFP is the top accreditation? I looked into it a while back, and it was a single piece of coursework (I believe this is now supplemented by an ethics exam). Chartership, on the other hand, is a minimum of 290 exam credits (with a maximum of 30 per exam and several mandatory exams running in at 10-20 credits) plus five years' industry experience.

I chose to go Chartered instead, and will progress on to Fellowship of the Chartered Insurance Institute when I get a chance to do a couple more exams. I may go for CFP at some point in the future, but I'd have to be convinced it would actually be useful compared with studying more technical subjects in greater depth, and I'm not.

ChemistDude

Aegis wrote: »

Why do you think CFP is the top accreditation? I looked into it a while back, and it was a single piece of coursework (I believe this is now supplemented by an ethics exam). Chartership, on the other hand, is a minimum of 290 exam credits (with a maximum of 30 per exam and several mandatory exams running in at 10-20 credits) plus five years' industry experience.

I chose to go Chartered instead, and will progress on to Fellowship of the Chartered Insurance Institute when I get a chance to do a couple more exams. I may go for CFP at some point in the future, but I'd have to be convinced it would actually be useful compared with studying more technical subjects in greater depth, and I'm not.

The CFP I mentioned is both Chartered and CFP, thats what I meant in terms of creme of crop, I apologise for not being clear.

If any IFA's were offended by my assertions I also apologise. I didn't mean to put them down, whether we agree or disagree I simply wanted to convey that there is what I personally perceive to be a higher class of advisor.

What we can agree on is that there is definitely value in both and based on what some IFA's have said on here I have more clarity on their offerings as a source of valuable financial advice.

Again, those who a considering IFA/CFP/Chartered etc listen to the podcast.....its simply bloody fantastic if you want to have a go yourself and get your finances and retirement together! http://meaningfulmoney.tv/

ChemistDude

Anyway battle wounds aside, this has been an interesting discussion and I for one am really impressed with what this industry does helping ordinary folk take out the agony of sorting their financial future, retirement, pensions, life and death.

bowlhead99

BananaRepublic wrote: »

There is no need to be abusive. Your post contains nothing substantive.

It refuted the contention that one qualification was better than another and its holders must be cream of the crop simply because there were few people that had them simply because it is new.

It pointed out that IFAs do not work for commission despite the contention that people who are not CFPs are simply looking for missing products to sell and get commission.

It postulated that desibadboy had bought into hype, if he thought that someone with a particular qualification would be more transparent on fees and commissions just because they had that qualification, or that they would abide by better standards than the standards that they need to abide by. Apparently they don't try to sell you anything, yet they seem to have sold desibadboy on their superiority. It is either their genuine superiority or his naivety.

I am not saying desibadboy is definitely naive for regurgitating marketing spin, but that is one way of looking at it. Apologies if you or he feels I have been 'abusing' someone by suggesting it.

You might wish to look into the qualifications required for each title. You might be right

I have. I assume you have not, because you say I 'might' be right.

You might be right, that the CFP is not better than IFA, but your post did not prove that assertion.

For a start, chartered or certified financial planners are qualifications. Whereas IFA is a (regulated) job title. So CFP is not better than IFA. It is like saying what's better when you're hungry, soup followed by steak, or food?

Incidentlly I have seen an IFA post marketing material in this forum and you did not take umbrage.

I am not the forum police. Maybe I didn't see it or I couldn't be bothered to post. Maybe the material was useful and didn't appear self-promotional. Who knows. Did the IFA link to his marketing website twice in one thread like Desi has done with meaningful money dot TV?

BananaRepublic

bowlhead, your post did not address the issue, instead you went off on a tangent about numbers, and as usual wrote huge amounts. Sandsy got to the nub of the matter, indicating that the minimum qualification for an IFA is much lower. I saw no mention of qualifications in your post.

bigadaj

BananaRepublic wrote: »

bowlhead, your post did not address the issue, instead you went off on a tangent about numbers, and as usual wrote huge amounts. Sandsy got to the nub of the matter, indicating that the minimum qualification for an IFA is much lower. I saw no mention of qualifications in your post.

No but desi/ chemist went off on a tangent, which did look like spamming but appears to be naivety. The latter is more excusable but potentially no less damaging if taken at face value when read by someone with little investment experience.

Bowlhead is verbose but his comments are pertinent, I don't see why you are criticising bowlhead and not desi/ chemist, it's the latter that has created problems in this thread.

TheTracker

bigadaj wrote: »

Could be a bit of a trek for many as well, as he's based in PENZANCE apparently.

Shouldn't be a problem for the OP namely Dread PIRATE TripleS.

Quite a funny thread. It's there in black and white that IFAs need less qualification than most professional jobs. But that's a red herring. All that matters is that the training is appropriate to the job that needs doing. The work they do isn't tertiary degree worthy.

An accountant doesn't need a PHD in economics. A nurse doesn't need a Doctors degree. I wouldn't trust an accountant or nurse with those qualifications any more than one with out if all I needed was to manage my small company accounts or tend to a recovering injury.

Likewise, the work an IFA does requires skills that could be done by most with a GCSE education, plus industry examinations. Wikipedia, that bastion of authority (sarcasm), equates IFA quals as equivalent to first year degree work. Some universities accept IFA accreditation as a few credits towards a Bachelor of Arts degree.

So IMHO it's a fools errand to criticise the level of IFA training required and claim those with other training would do a better job. To summarise, it ain't rocket science.

meaningfulmoney

Interesting thread everyone. Thanks to ChemistDude for bigging me up (I'm Pete Matthew CFP) even though we've never worked together!

If I might add my own two penn'orth, without trawling back through the whole thing:

1. Qualifications do not make for a a good adviser, but higher qualifications increases the likelihood of that adviser being better than most.

2. CFP does not equal Chartered Financial Planner. CFP = Certified Financial Planner. Chartered is achieved by sitting exams and having head knowledge. Certified is achieved by applying that knowledge to a complex, supposedly real-life situation. Only a fraction of those who sit the CFP pass it first time. I would argue that having both is best, but I know some superb, experienced advisers who have nothing but their clients' best interests at heart, who are only Diploma qualified (the current minimum).

3. No, financial advice is not rocket science. But neither is accountancy, or law, or medicine. Anyone can learn anything and do it themselves if they want to. Most people don't want to do their own financial planning, any more than they want to do their own minor surgery, which is why I have a job. For those of you who are happy to do it yourselves, fill your boots. I have been providing free information over at my site for six years to help people do that. I'm convinced that at least 90% of the population don't need an adviser at all. They just need to a) spend less than they earn, b) insure against disaster and c) invest in pensions and ISAs over time.

4. Unfortunately, the regulator insists that an adviser is involved for certain transactions, including certain pension transfers, perhaps like the one the OP was talking about. £10k sounds like a hefty bill for that work to me. But if the OP felt like they received value, and were prepared to hand over the money, then fair enough - that's capitalism, baby. Personally, I couldn't look someone in the eye and say that the work involved was £10k worth. I would have charged less than half of that and still made a decent profit.

5. Advisers have to prove their value to clients more than ever, since commission was abolished. This is a good thing. I have known advisers earn six figures sums off one single (very large) transaction in the old days. Clearly this had to change.

6. The UK has yet to grasp this, but financial planning is different to financial advice. The former is nothing to do with products and very often my input into a client's finances stops there, because they are doing all the investing themselves and already have the wrappers necessary to achieve their aims. Too many advisers make it their goal just to get assets under management. Planning is about identifying and articulating those aims, and then doing the maths to make sure they are achieved, within the parameters of risk tolerance, savings rate, expected growth etc. Again, it isn't rocket science, but an understanding of client behaviour, particularly when markets are rocky, makes for a solid relationship going forward.

7. Neither advisers nor planners are investment managers. They should either outsource or stick to passive multi-asset arrangements and let the markets do their thing.

Bottom line. If an adviser isn't adding more value than they are charging in fees, then they shouldn't be part of your life. But if they can show that they have added more value, and in concrete, pounds and pence terms, then they deserve to be paid. Maybe that value is in your time saved. Maybe it is in tax gain/loss harvesting, or effective decumulation strategies to minimise income tax. There are lots of ways an adviser can add value, but just arranging a financial product is usually the least value-add part of the advice process.