Financial Advisors are useless

capital0ne

I know you can't trash a whole branch of the financial services industry, but FA/IFAs do get a bad press and they bring it on to them selves, take for example Active Wealth who gave members of the British Steel pension scheme advice that was unsuitable, but not before they 'helped' 100+ steelworkers transfer £40m of FS pensions to their recommendation.

The problem is many fold and solely lies with the FA/IFA.

They are masters of hiding the facts and costs, use jargon without explaining it properly, and assume their clients cannot understand finance, by say 'it's complicated - let me take care of it.

It's bit like that famous quote, words you never want to hear: "I'm from the government, I'm here to help you."

Peelerfart

A controversial statement and one which I'm sure will provoke debate. My own thoughts are they very much have their place in some complicated situations but for simple transactions, someone with common sense and basic ability can decide the best course of action.

I respect the profession and no-one should work for nothing, but some, like the Tata steel "advisors" do them no favours at all.

A_T

I'm sure they have their place in the same way that some people will need to pay someone to change a washer in a tap or a fuse in a plug. But if you've manage to find your way to this forum it's hard to think you would need an IFA.

jamei305

What I want is an IFA to set up and manage the whole best interest rate current accounts and regular savers merry-go-round. I'd happily pay 0.75% for someone to do all that for me. :cool:

chrisgg

Bit of a ridiculous post.

In my experience, a minority of FAs are dodgy. A smaller minority of IFAs are. No different to any other profession in that regard.

dunstonh

Another anti adviser post by the OP. Trying to provoke responses that can no doubt be reported. Time for you to give up the trolling.

GreenSnake

capital0ne wrote: »

I

assume their clients cannot understand finance, by say 'it's complicated - let me take care of it.

ou."

I think it's the clients who assume they cannot themselves understand finance and therefore approach the IFA.

GreenSnake

I think part of the problem is limited scope professional indemnity, leading to a narrow and defensive (legally, rather than financially) approach.

talexuser

It's a pity they are expensive (perhaps unavoidably so with regulations and exams) because an awful lot of ordinary people have no idea about pensions or ISAs, not thinking beyond we can manage on the state pension, and 25 grand from premium bonds means we could retire for life.

dunstonh

talexuser wrote: »

It's a pity they are expensive (perhaps unavoidably so with regulations and exams) because an awful lot of ordinary people have no idea about pensions or ISAs, not thinking beyond we can manage on the state pension, and 25 grand from premium bonds means we could retire for life.

Cost of regulation is around 35% of income. The latest EU directive is increasing costs as it prevents more flexible business models to cater for different needs.

So often in the past you could have a chat, put someone in the right direction and maybe charge them a nominal amount to cover the brief time you spent with them. Now you need everything documented to the nth degree.

The directives seem to be based on the assumption that everyone lives in cities and has very formal meetings specifically about investments. Yet the real world is not like that.

DairyQueen

Not a fair post OP. I wish my parents had invested in the services of an IFA when they retired; they would likely have avoided the situation that now presents on the death of the first of them (don't ask).

Yes, there are shysters in every industry but the principle of taking independent financial advice is a sound one. Going DIY on major financial decisions is fine assuming that you are an enthusiastic, experienced and well-informed DIY-er. Er... most people don't fit that category. Would you attempt to build an extension without appropriate building experience and skill? Probably not. So, why do so many financially disengaged people assume that they are competent to go DIY with the investment equivalent?

The fees are generally proportionate to the time invested, and to the skill/experience required to do a good job.

And, no, I am not an FA, IFA, or anything remotely associated with financial services.