Do professionals in finance make it overly complicated?

talexuser

When I started with peps before the internet, the only source of information was Times and Telegraph money sections and sending away for all the platforms literature and marketing recommendation bumf, drawing up lists, comparing the paper graphs and trying to find the consistent good performing funds. I'm sure market insiders have the best info, followed by those who can afford to buy the quality research, but the web sure has made life easier for the amateur.

BananaRepublic

BLB53 wrote: »

In theory this is true but in practice only a small percentage of the population actually do have a go and of those that do, most fail to get a decent return compared to the market.

Do you have any evidence for that claim?

What I suspect is true is that most of us have defined benefit pensions invested in poor performing funds with high charges. Most of these will have been company schemes, sold to the company by shiny suited spivs, sorry I mean by professional advisors, working for pension funds.

dunstonh

manuel_ritz wrote: »

I agree with you! Whenever you consult professionals in this industry it seems like they always involve in their talks about the risks and disadvantages which makes things more complicated to understand.

You missed the smiley to indicate that your post was a joke or being ironic.

BLB53

Do you have any evidence for that claim?

I guess most small diy investors will use an ISA so here's a link to the latest govt. stats

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/520103/Full_Statistics_Release_April_2016.pdf

Only around a third of the UK population have an ISA and out of these, the vast majority are cash ISAs and only around 10% have a S&S ISA. Many of these will have been set up with an adviser so I am thinking only 2% or 3% of the population operate a diy investment ISA.

Anyone CAN set up an investment portfolio but it seems few actually do so and according to the annual Dalbar reports (USA) the average small investor underperforms the market by around 4%.

BananaRepublic

BLB53 wrote: »

I guess most small diy investors will use an ISA so here's a link to the latest govt. stats

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/520103/Full_Statistics_Release_April_2016.pdf

Only around a third of the UK population have an ISA and out of these, the vast majority are cash ISAs and only around 10% have a S&S ISA. Many of these will have been set up with an adviser so I am thinking only 2% or 3% of the population operate a diy investment ISA.

Anyone CAN set up an investment portfolio but it seems few actually do so and according to the annual Dalbar reports (USA) the average small investor underperforms the market by around 4%.

As far as I can see that document does not support your claim. If you are saying most ISA savers do not beat the market because they invest in a cash ISA, fair enough, but I took your statement to mean that most DIY stock market investors do not get a decent return.

I think these days it is much easier than when I started investing, 25 years ago. We now have the interweb, and lots of helpful people willing to explain the basics. Plus an IFA can no longer charge 'hidden' commission which in my opinion is for the better.

chucknorris

bigfreddiel wrote: »

Professionals working in the finance industry make it complicated for their own esteem, when in reality it's all very simple?

With a small amount of research, and all the info available for free online, I believe anyone can set up an effective portfolio quite easily and cheaply. The finance industry deliberately frightens most people to go it alone so they can keep on earning from advice that anyone can discover for themselves and then realise it's all just guesswork.

It's a bit like buying a newspaper and then paying someone to read it to you!

Without any advice I've managed to go fro unemployed and on the dole less than twenty years ago to a net worth well in excess of £1m and a pension of £30k after tax. I've never been a higher rate tax payer either, well not until now that I've retired so the part time job I do will have to go.

Had I tried harder, I would have been at least £2m+ over my current worth easily.

It's not hard so don't let anyone tell it is! Good luck fj

For me the point is that it is fun and interesting to manage my own financial affairs, why on earth would I want to pay someone to do that for me. I've no doubt that someone like dunstonh would make a better job of it than me, but I would really miss doing it for myself. The sort of things that I have no qualms about paying for is having a cleaner (I have had a cleaner for over 25 years), gardener (they will be some that love gardening and would not pay for it, I fully understand that, but gardens are like cars to me, I really like using them, but I don't want to have to work on them) and car repairs.

Apodemus

chucknorris wrote: »

For me the point is that it is fun and interesting to manage my own financial affairs, why on earth would I want to pay someone to do that for me. I've no doubt that someone like dunstonh would make a better job of it than me, but I would really miss doing it for myself. The sort of things that I have no qualms about paying for is having a cleaner (I have had a cleaner for over 25 years), gardener (they will be some that love gardening and would not pay for it, I fully understand that, but gardens are like cars to me, I really like using them, but I don't want to have to work on them) and car repairs.

Well said! I would think that, deep down (and perhaps not admitted) for any of the regular contributors here, there is a strong sense of money-management as a hobby, albeit one that can have serious consequences. The car and garden analogy is good. I do my own weeding, but employ a tree-surgeon if the problem is above about 12 feet up. I tinker with my car, but get the garage to change the timing belt. With money, I have a number of personally held investments but also have professionals handling other aspects.

Oh...and as for cleaning... What's that?

Pincher

It's bizarre, people turn up to look, then disappear.

Three guys did the tree next door, so I asked them to trim some branches on my side. They started for ten minutes, then said they are going for lunch, and never came back. No money changed hands.

The same thing happens with plumbers. The last one didn't have glue for the grey plastic pipes, say next time, and I never see them again.

I actually have lots of small jobs for tradesmen, but just can't get them to turn up and actually do it.