What will a financial adviser do for me?

Jon_W

dunstonh wrote: »

You say they are not adding to the process. However, that is an incorrect assumption. For example, after charges, our portfolio that matches closest to VLS60 in risk has outperformed VLS60. You should not assume that cheaper is better (or that more expensive will be either)

Ah, but I won't be asking the adviser to pick securities: I'll just be in a passive fund, so will they still be adding anything?

dunstonh

If an IFA is advising a client with a steer towards his firm's own funds management, how does he avoid the appearance of bias?

What do you mean by "own" in this context?
If this is own brand funds then they are not IFAs. Remember it is quite common for FAs to try and infer they are IFAs.

However, if it is a model portfolio of funds which is branded under their own name e.g. IFA Firm portfolio 5 then that is fine as its not their own fund. It is model they have independently researched and its just being modelled by software.

An IFA will be operating with products from different providers and platforms. An IFA cannot realistically operate an "own" portfolio as you would need the fund(s) to be available on all providers/platforms. That doesn't happen. For example, Royal London pension will offer RL funds and a selection of insured external funds. Elevate platform is whole of market but Old Mutual is a fund supermarket. As an IFA you cant have a one-size-fits all. You can have your model allocations for each risk profile but you have to fill those allocations with different funds.

If the adviser operates a model that is limiting itself to one platform then it should be referring to itself as an IFA. The FCA has come across some firms called themselves IFAs who placed everything on one platform and has taken action (which tends to result in the firm dropping their IFA status to become restricted).

IFAs can white label some solutions with their own name. So, it may be that what you are viewing is just a white label option but is still fully independent.

This isn't directed at your practice dunstonh but to my husband's choice of IFA who brushed off my question about the past performance of his firm. No portfolio materials published on his website since 2015 either.

We dont put anything on our website either. I cant see how any IFA could because there are too many variations and not one model as mentioned above. Virtually everything is bespoke to the individual.

dunstonh

Ah, but I won't be asking the adviser to pick securities: I'll just be in a passive fund, so will they still be adding anything?

A single passive fund is usually considered bad investing (global (inc UK) tracker for someone going 100% equity excluded). If that is all you want then fine. I havent modelled a 100% equity option on our model portfolio against a 100% equity tracker as we have no-one on our books who is that high in risk profile.

What about something like St James place.? Aren't they Ifa s who have their own branded funds but can they offer others? Genuine question I don't know much about them I just see a lot of negative press about them on here

No, they are not IFAs. They are restricted FAs as they provide their own product. They are quite disliked in the industry and have been getting a lot of negative media coverage recently because their charging methods are not viewed by most as in keeping with the spirit and intention of the retail distribution review. IFAs are not allowed to charge the way SJP do. Nor are most FAs. However, SJP seem to get away with it. That said, IFAs generally like coming across SJP clients as we can save them bucketloads on charges. One of my biggest ever savings was for a SJP client moving away from them was over £300,000 on the effect of charges. Most IFAs cannot match the glossy documentation or marketing materials of SJP but is that what you want to pay for?

patricia1066

The firm is registered as IFA unrestricted. The platform used is Standard life with charges for SIPP, and there is the amc of the funds chosen by the firm. Then they have a charge of 0.05% for managing the funds.

He said we must use their platform if we invest with his firm, but they aren't restricted to SL products.

patricia1066

Edited. Their management charge is 0.5%

dunstonh

He said we must use their platform if we invest with his firm, but they aren't restricted to SL products.

Definition of IFA is that there should be no restrictions in provider choice or investment selection. That sounds like a restriction.

However, the FCA do allow IFAs to run non-personalised pre-research on platforms (but not providers) which allows them to limit it to a range (as so many platforms are similar). That typically means 3-4 platforms. 1 platform would is theoretically possible but the FCA say it is unlikely.

Jon_W

dunstonh wrote: »

A single passive fund is usually considered bad investing (global (inc UK) tracker for someone going 100% equity excluded). If that is all you want then fine. I havent modelled a 100% equity option on our model portfolio against a 100% equity tracker as we have no-one on our books who is that high in risk profile.

Thanks, dunstonh. Would you still have the same alarm bells if only my EQUITY stake is to be in a single tracker, the rest in a bonds fund? About 80/20 split? I wish you were local, I'd pay to see you!

ColdIron

patricia1066 wrote: »

He said we must use their platform if we invest with his firm, but they aren't restricted to SL products.

So what he is offering you is products you can get from anywhere else but via a very expensive platform? Heinz Baked Beans at Harrods prices?

JustAnotherSaver

I've found that when asking these types of questions the feedback from this forum tends to be go it alone, you don't need an IFA.

That's all well & good coming from people who have half a clue.

I'd say i'm similar to you. In fact i probably know less actually & am less confident. I got told to go it alone. I said it'd be like closing my eyes & just selecting randomly. Then the people on the forum couldn't work out why going it alone meant that. Yeah....because i don't understand it, are you getting it yet?!?!

So i paid & went the IFA route. Sure if i went solo i could have more in my pot but i could also have less. If i went myself then i wouldn't know where to put the money, when to put it more into one thing than another, when to pull it from something, so on & so forth.


Don't let anyone talk you out of going the IFA route if it's something you feel more comfortable doing.

AlanP_2

Jon_W wrote: »

Thanks, dunstonh. Would you still have the same alarm bells if only my EQUITY stake is to be in a single tracker, the rest in a bonds fund? About 80/20 split? I wish you were local, I'd pay to see you!

If you believe Dunstonh can "add value" for you why don't you think a local IFA could?

Whilst his comments on here are worth reading and have helped many I doubt he would claim to be the Number-1 IFA and better than all the rest.

Finding a local one that you feel comfortable with might mean you need to make a few phone calls and meet face/face with your shortlist but if you feel that a "trusted adviser & guide" will help you then the effort would be worth it surely?