Investing without FA

TrustyOven

50Twuncle wrote: »

A consultation rate of £150 per hour has been stated !!
Does that sound excessive ?

Yes, that sounds excessive.

Do you really want to pay that much for someone to tell you the same things you could find out by researching things online or in books?

bowlhead99

TrustyOven wrote: »

Yes, that sounds excessive.

Do you really want to pay that much for someone to tell you the same things you could find out by researching things online or in books?

People who have not run businesses always think professional services are overpriced because the cost per hour is high in relation to the nearest thing they can compare it to, which is what they are used to receiving as a salary which for a massive proportion of the population is £10-£40ph.

I'm not an IFA. My charge-out rate is north of £300ph though. Needless to say my salary is not north of £300ph.

The business needs to generate a level of revenue to pay my hourly wage, and the employment costs on top of that such as employer national insurance, and an HR department, and regulatory compliance, and IT equipment and infrastructure, and rent and rates and heat and light, and a bunch of other stuff like marketing and finance and strategic thinking, and a legal team to put together the terms and conditions that can be signed off as part of the contract for any work to even be carried out, and a profit margin on top.

And if I'm only actually doing work in front of clients for 25 hours a week because the rest of the time I'm doing research or training or being trained or doing pure admin or having a lunch break or a toilet break, or having a day at home because I want holidays... then all the costs of running the business and paying my salary etc, need to be split over those chargeable hours.

So, if I do a couple of hours of consulting for a client and take an hour to write a report (which someone else of similar qualifications and experience will have to sense check too before it can be released), the client might wonder when they get my bill for that three hours, why it's £1000 when they might guess my salary as somewhere between £20-£100 an hour.

The answer is that yes, I was able to find a high quality solution to your problem in just 3 hours of work, but what you are paying for is my ability to solve your problem in just 3 hours of work, and the reason I was able to solve the problem in 3 hours is that I have 20 years of experience and my company has high quality operational infrastructure. If you'd like to pay me 20 years of salary and my firm's entire annual operating costs just for us to be in a position to solve your problem in this 3 hour window feel free, but it's north of a million quid, so on reflection perhaps you should pay the thousand pound bill instead.

Sure, if you don't want to pay £150 an hour to do something that you could DIY by going and getting your own knowledge and experience from websites, the library and watching youtube, it's completely sensible to go and do those other things and DIY with a homemade solution. Whether that's fixing your car, your plumbing, or your pension.

For me, getting the pension badly wrong is something that has the potential to cost a massive amount more than my car or plumbing, yet bizarrely I trust myself more with the 'high risk' area of personal finance because finance is what I'm good at. So I DIY the pension. Whereas with my car and plumbing I take the money I earned from my salary (getting paid for what I'm good at) and give it to someone else for the work they do (paying them for what they're good at). I could save some of those costs by spending the time learning the other trades, but I often don't have the time or the inclination to figure out how to put in place the perfect 'fix' for those problems.

Something that stands out to me in that analogy is that you don't need to be fully trained and certificated as a car mechanic in order to change oil or brakes. You just need to know how to change oil or brakes. You don't need to be able to install a central heating system to fix a leak by turning off the mains water, researching what pipe and connectors to buy, and changing it out. So if the mechanic or plumber wants £100 call-out fee plus £50ph because he's abcxyz certified, and I know what solution I need, I might just get a cheapo 'handyman' who doesn't have certificates, or I might DIY.

With IFAs, a regulated industry, there's no real option of using one that doesn't have the costs of being licensed and certified and up to date. So the options are simply to meet with some and shop around for one that will give you the particular service you want at the price you can afford, or DIY. Both of these can be valid options but I don't see £150ph as expensive for most parts of the country, though I am used to London salaries and prices.

dunstonh

TheTracker wrote: »

82,500 posts and I don't recall you ever stating your hourly rate. Why is that?

None of your business and not relevant to the thread.

Snakey

Hitting it with a hammer: £1
Knowing exactly where and how hard to hit it: £99

Hit it with a hammer yourself if you want to save £100, but the risk of ending up with a pile of broken bits/the cost and effort of training for several years so that you too know exactly where and how hard to hit it, is all yours.

I can give tax advice off the top of my head, but I have to get somebody round to change a washer in my kitchen tap. My plumber, one assumes, has to pay somebody to do his tax return. And so it goes.

bigfreddiel

50Twuncle wrote: »

Sorry - it is an IFA !!

I always find it unbelievable how people can be so inaccurate! There is a huge difference between an IFA and an FA, but there you go I guess people just don't take as much care and attention.

Cheers fj

bigfreddiel

dunstonh wrote: »

None of your business and not relevant to the thread.

I would be interested in a ball park figure and I know you're not allowed to tout for business here so just a clue would be useful when we do engage an IFA.

Cheers jk

dunstonh

bigfreddiel wrote: »

I would be interested in a ball park figure and I know you're not allowed to tout for business here so just a clue would be useful when we do engage an IFA.

Cheers jk

The industry ballpark is around £100 to £175 ish. Prestige firms may charge more. It should also be noted that consumers in general do no like hourly fees. Fixed fees are the increasingly common.

50Twuncle

dunstonh wrote: »

The industry ballpark is around £100 to £175 ish. Prestige firms may charge more. It should also be noted that consumers in general do no like hourly fees. Fixed fees are the increasingly common.

And you honestly believe that £175 per hour is not excessive ?
Even with a few hours homework - prior to the visit / afterwards

bowlhead99

50Twuncle wrote: »

And you honestly believe that £175 per hour is not excessive ?
Even with a few hours homework - prior to the visit / afterwards

Please, let us know how much it should cost, and then give us a business plan that shows how that could be achieved taking into account all the costs of creating and running the business that puts the IFA in front of you.

dunstonh

And you honestly believe that £175 per hour is not excessive ?

No. However, it would be interesting to note what you believe it should cost and how you have costed that.

Even with a few hours homework - prior to the visit / afterwards

few hours lol.