Wealth Management Pension freedom

dunstonh

However, I am passionate about the premise behind them. I note you are an independent financial advisor and I've listened to both points of view as a 'potential customer'. I would opt for husband's every time - I just see it (restricted but for good reason and guaranteed advice at that) as a safer approach. However, I am willing to learn - tell me why an IFA is better?

You havent confirmed who your husband is with but a couple of us suspect it is SJP. So, I am going to assume that in my comparison.

Independent financial advice and restricted advice have identical protections to the consumer. So, no difference there.

IFAs are whole of the market by requirement. They can go to any provider that makes their products/investments etc to the whole of market. SJP have a small product range issued under their own brand.

Looking at pensions, as an IFA, I could have a client where a stakeholder is most suitable. Or one where a personal pension is best. Or one with a SIPP. Someone with £x may fit the charging structure and functionality of xyz provider. Whilst anther person with a different amount fits a different provider. With SJP, you have just SJP's product. The client has to fit SJP. Not the other way around.

SJP marketing materials will beat most IFAs. SJP is very slick and their presentation material is professionally printed. IFAs use their own laser printers in the office most of the time. IFAs cannot hold stock of professionally printed material as they use so many different providers/options. They print the pdf locally.

However, the biggest difference is on cost. SJP initial charge is 6% (4.5% adviser cost and 1.5% for product) plus a 6 year tie in with exist charges of 1% for each year of that 6 remaining. That is old world pricing. So, if someone has £400,000 to invest, I would charge upto £2000 initial charge with no tie-in. SJP charge £24,000.

Ongoing charges are also at the higher end.

Whenever an IFA comes across a soon-to-be ex SJP customer, they love it. The cost savings the IFA can give are significant. To date, SJP holds the biggest cost saving I have arranged for a client. That was on a pension where the effect of charges was over £300,000 cheaper with what I arranged compared to her staying with SJP.

So, in her case, I just said, do you want to stay with SJP and pay over £300,000 more than what we can arrange.

I spoke with an ex SJP compliance officer recently and he had to leave as he couldn't stand it any more. He said working there was like working for a religious group. He called it the church of SJP. The brainwashing that goes on and the whole mantra is SJP is best and you either fall for it or you get out before you do. To be fair, SJP are not alone in that. It is a very common method used by tied sales forces. I did time as a tied agent in my early days, like most IFAs have. I recall the brainwashing that goes on.

EDIT - can I also excuse my grammar - four Cavalier King Charles jumping up at me X

four is a handful. We used to have one. He was lovely. We have a lhasa apso now and its like chalk and cheese. Stilly a lovely dog but stubborn and bossy as hell. Indeed, he is reminding me I need to take him out.

AnotherJoe

amandajeanthomson wrote: »

However, I am passionate about the premise behind them. I note you are an independent financial advisor and I've listened to both points of view as a 'potential customer'. I would opt for husband's every time - I just see it (restricted but for good reason and guaranteed advice at that) as a safer approach. However, I am willing to learn - tell me why an IFA is better?

here's an analogy i think is fair.

Imagine i want to buy a car. I can either go to a specific manufacturers salesroom or i can look at the whole market, every single manufacturer. Its inconceivable that for anyone but a small minority, any one manufacturers car range will provide a better alternative than looking across all cars.

Now lets imagine your husband sells cars for, say, Porche. OK, their cars will be a great fit for say 1% of people. Do you tell the other 99% of customers wandering into your showroom "hey for you, XYZ have a model thats fits your needs better" or do you try and flog them a Porche?

Spreadsheetman

sandsy wrote: »

Wealth manager, FTSE100 company? Every letter I get from SJP goes straight in the bin.

If I was to take financial advice, I'd want to use an independent firm, not one that can:
a) only sell one company's products, and
b) charges a fortune for doing so.

+1.

I am a company director and I am continually mail spammed by "wealth management" companies - it all goes straight in the bin.

And - I don't play golf, I don't drink Whisky and the IFA I use was recommended by my accountant...

Li142why

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AnotherJoe

amandajeanthomson wrote: »

Thank you for your response. I must say that people appear (from first impressions), quite hostile to the thought of being approached.

This is a very atypical audience. Maybe your customers / prospects are too dim to realise they will end up paying through the nose.

amandajeanthomson wrote: »

I'm not presuming that all company directors drink whisky and play golf by the way! Or, perhaps I was a little - playing at statistics

That's not the point. The point is that whatever "freebies" you hand out, the costs have to be paid for by customers. Golf. Whiskey. The opera. A Metallica concert. Whatever.

Which means higher fees than necessary. If I wanted to play golf or watch Metallica , I'd pay for that directly rather than via my financial management fees where I'd be paying not just for my experience but the experiences that all the prospects who never take up an offer had.

tacpot12

Generating new leads is easier if you have a product that fills a need that is difficult to meet, i.e. selling something with a unique selling point (USP). SJP don't have a unique selling point, being expensive doesn't meet a need that most people have (there are a few that need to buy the most expensive option even when better options exist, and this is where SJP find their customers).

Finding your product's USP is not necessarily that easy. It may not be what you think it is. Only customer research will tell you what niche is not being filled by other providers.

If the niche can be filled easily, then it's not going to last long to create a sustainable business. The best USPs are difficult to replicate.

Li142why

...............

Number75

The reason that these companies that your husband has worked for are so successful, is that they have a massive marketing machine. As a previous poster mentioned - it's glossy brochures all the way! My IFA personally prints at home. There is a market for people (with a little more money than sense) who fall the marketing.

Given that he already works for a company who are experts in marketing, why isn't he telling you how they successfully generate leads?

Of course there's a place for original ideas and a totally outside perspective, and you might bring that.

But go back to your whisky tasting... it may be that his ideal client is a high earning 30 something who doesn't want to think too hard about this and is secretly a little daunted by finance and likes to flash his money a little conspicuously, quite "luxury" brand oriented - and will think of being an SJP client as a bit of a status symbol. Now, research might tell you that this man follows trends in his drinking - and is currently into craft gin. Believe me, the professional marketing teams will have identified and named all these potential customer segments, and how to attract them!

Step 1: find out everything you can from his existing marketing contacts!

Joey_Soap

OP, to be blunt with you, I think you need to think of something a bit more imaginative than mail bombing people. Nobody you will want to work with will respond. We've seen it all before. Anyone who has time on their hands will drink your whisky and sit with their eyes glazed over all through the sales spiel. Never to be heard from again. Let me put it like this - would you respond and go to a timeshare event that you received unsolicited mail about? I suspect not. So, why would anyone even half serious turn up at your event?

AnotherJoe

amandajeanthomson wrote: »

My specialty is discursive psychology. You really like Metallica, don't you? I could get you tickets - Glasgow, October 2017 - Now hold on and trust me for a minute. I'm not going to - but just put yourself in the position of a potential client for a moment. That would be free - It's just a point of introduction and we have to pay for that. I don't profess to know ANYTHING about finance

And I'd believe you if you really thought it was free.

OTOH, any prospective client who also thinks it's free it's perhaps mug enough to fall for the rest of the spiel.

amandajeanthomson wrote: »

I honestly believe that it pays to have a wealth manager more than the fees

Well, plausible deniability is always a good strategy for the salesperson.

Knowing that paying fees is better than doing nothing, doesn't mean that these fees are good value for money, if many others provide the same outcome for less money. This is especially true for financial services where the fees are an integral part of the service.

With cars for example, perhaps a particular Porsche model isn't exactly the best for me but I may like the prestige of the brand. WIth finance, there's no prestige in paying tens of thousands of pounds needlessly, and being a prat as far as anyone who is astute is concerned..

amandajeanthomson wrote: »

Hypothetically speaking here - I would say that BOTH Hargreaves Lansdown and SJP have their place in the market. I need to learn more (and I am every day - I just don't know if I'm cut out for the financial sector.

Well,you obviously have zero knowledge of it since that's the wrong comparison since only in limited cases do HL do advice, they are more about DIY.

Bottom line is that a seller who is restricted as to what they can sell, because they can only sell their own products, is almost certainly going to provide a poorer product at a higher cost than one that can pick from the entire market.