Ongoing use of IFA

capital0ne

dunstonh wrote: »

I have been here a lot longer than you and I don't recall anyone ever posting that you will make a hash of it.

It is just the same as any job where people can DIY. If you do it well, it can save you money. If you do it badly it can cost you money. On this board we see some people attempting DIY and they are clearly doing it well. Other times we see people attempting DIY and are making a right pigs ear of it.

Vested interests work both ways. The pro DIY brigade will always put people off advice as that is their bias. They cannot fathom that some may prefer advice. There is plenty of room for advice and DIY. There is no need for bias.

What has being on a board longer than someone else got to do with my comments - for all you know I may have been here before, or lurking even.
I seem to recall you got banned from MSE a while ago, must have just ben a sin-bin ban.

Anyway the phrase 'make a hash of it' is a well known and which covers all types of doing something badly, not doing as well as it could be, and so on.

Anyway I get it that some people think they need an IFA, and in reality they just need a gentle push into the world of investing.

There is so much information now at one's fingertips it's all rather easy.

Snakey

Thanks all - I really appreciate the time you guys spend helping me. It's a set of ideas and opinions that I wouldn't be able to get anywhere else.

I take the point about how there shouldn't be (m)any changes from month to month or even year to year and that this is how it's supposed to work. I was imagining that there'd be a new set of "funds we currently recommend" to move in to at least on every annual review if nothing else. So I got that dead wrong. Probably been watching too many clips of frantic people shouting "buy!" and "sell!" on stock market trading floors and assuming that was broadly what fund managers do (albeit in slightly slower motion and from a distance).

Since there isn't likely to be much work to do now that it's all set up, it seems pointless to be paying more than a nominal fee for "ongoing advice". The cash flow planning (which is the other thing they do as part of the service), while fun to look at, isn't going to be relevant to me until I retire which is years away and anything could happen between now and then.

So I'll pull out of this - they've had about six grand of fees from me in total which seems reasonable for the initial advice and set-up costs given that the only bespoke thing they've done has been the cash flow plan - and let it all ride indefinitely with a little rebalancing every now and then. And I'll make a diary note to reconsider in (say) four or five years' time, at which point I'll have saved thirty grand in fees and not missed out on new fund recommendations because there probably wouldn't have been any anyway.

bostonerimus

I would make sure you are ready to set sail by yourself. I'm a big proponent of DIY and it definitely sounds like your IFA isn't giving value for money so i encourage you to make a change. If you go DIY make sure you are prepared, so do some reading and understand the basics of investing. You need to make sure you are able to navigate both good and bad weather and are able to keep your cool when things get stormy.

jimjames

capital0ne wrote: »

Anyway I get it that some people think they need an IFA, and in reality they just need a gentle push into the world of investing.

There is so much information now at one's fingertips it's all rather easy.

I totally disagree with this. I do all my own investments but it just isn't for some people. Some people like to work on their house, others get a trade in to do it. Investments are no different so it's daft to say that everyone just needs a push to avoid using an IFA. Some may lack knowledge or just not have the interest and would be far worse off as a result. You only need to see some of the posts here from people who keep all their money in cash.

BananaRepublic

jimjames wrote: »

I totally disagree with this. I do all my own investments but it just isn't for some people. Some people like to work on their house, others get a trade in to do it. Investments are no different so it's daft to say that everyone just needs a push to avoid using an IFA. Some may lack knowledge or just not have the interest and would be far worse off as a result. You only need to see some of the posts here from people who keep all their money in cash.

I agree. Despite having in the past been attacked as ‘anti-IFA’, you do need a certain mentality to DIY. You need to be able to read up on and understand the basics, and have the nerve to follow through even during a crash. Some people do not put have the time, or the cold calculating nature. For those with a cool rational bent, and time, it’s not rocket science. But you do have to put in the time and effort. A work colleague uses an IFA. He’s done well. He’s clever, but I guess he doesn’t get enthused by investing. I DIY and I’ve had many IFAs pursue me sometimes quite aggressively, once they realised I was worth a bob or two. But I’ve done pretty well. My only regret is falling for the passive fund hype.

Alexland

Snakey wrote: »

Since there isn't likely to be much work to do now that it's all set up, it seems pointless to be paying more than a nominal fee for "ongoing advice". The cash flow planning (which is the other thing they do as part of the service), while fun to look at, isn't going to be relevant to me until I retire which is years away and anything could happen between now and then.

If your pension is £950k and retirement is still a long time away you might want to get some LTA advice before you leave your IFA

Alex.

Snakey

Thanks Alex - I have Fixed Protection which means any further retirement investing has to be either in ISA or a taxable general investment account. Bit annoying since I now find myself in the 62% tax bracket (nice problem to have, I know) while most of my pension funding went in while my marginal rate was 42%. Oh, for a crystal ball to have known that they would cut the LTA so much/often!

This was one of the reasons I got an IFA, because I needed a lower risk in my pension (since the government will take 55% of the upside while leaving me to suffer 80% of the downside - I may be wrong with the percentages but the principle is sound i.e. I'd be better with the higher-risk stuff being in my ISA) and also investments that would "work" even if I was not adding further funds to them each month.

I might see if I can find out when they expect their fund recommendations to be updated - if it's once a year and I just happened to join shortly after they'd last done it, it might be worth waiting a few weeks to make sure I'm totally up to date before I leave. Not that this would be an easy conversation to "subtly" have.

Alexland

Yes I agree take the risk and potential reward in your ISA not your pension(s).

Eventually with compound CPI increases to the LTA then your Fixed Protection may be overtaken by the latest LTA anyway. But it would still be a problem if your investments grew above inflation thus overtaking both. Might be worth considering taking a 25% lump sum early and crystallising some of the value? Maybe you need to speak to an IFA...

Alex

Snakey

That was one of my considerations but also you have to think what if a future government were to reduce the LTA even further instead?

Nine and a bit years before I can get my hands on any of it, or maybe eleven and a bit years depending on whether/when/how they raise the access age to 57, which they've gone quiet on lately. (And this is another variable that "they" could change even more before I get there, therefore another reason to not make further contributions.)