New here with a basic question on savings and IFAs

ChrissieJames

Hi there
Sorry this is so basic - I have never taken financial advice and am now in the fortunate position of expecting to have quite a big sum of money to invest (£1.5mil) in the short term, though I will be spending say £1m on property 9 months later, but will still have £500,000. Should I see an independent financial adviser and if so, I assume there are loads out there but how do you find a good one. Or do I just spend time reading websites like these and buying books and try to do it myself? I have never invested in shares myself though have got 2 Fidelity ISAs with a mix of shares but am not at all clued up about stock market investment.
Any help greatly appreciated.
Chrissie

Aegis

www.unbiased.co.uk

Without a doubt you should at least get a free initial consultation with a couple of local IFAs to see what they say. Learning is all well and good with a few thousand that you can spare, but with half a million, you really should be sure that what you're doing is based on thorough research, preferably by someone whose job is to invest such amounts!

dunstonh

It is like any profession. Ideally word of mouth is a good way to find a good one. Although most people have never seen an IFA. They have seen tied agents or mortgage advisers but never an IFA for invesmtments. Indeed, many people (Research has shown 2/3rds) mistakenly believe their tied agents or mortgage advisers are IFAs. They see the initials FA and assume IFA and not many tied agents are going to correct them.

Initial consulation is free. It has to be as you cannot be charged until the compliance requirements have been dealt with and a fee/commission structure has been agreed.

It is a good idea to avoid salesforces (regional and national) as sales targets are not desirable for good advice and they also tend to suffer higher staff turnover. Also, many salesforces/national firms work more on a panel than whole of market. So, if you spot a tel number on unbiased.co.uk that isnt local, then assume its a salesforce.

When getting advice, you have rights to see all the research that backs up the recommendation. No good adviser will refuse to show you. Many will show you anyway. Whilst you may not understand the research, you should be able to tell the effort or detail of the research that has been provided. Poor quality advice tends to come hand in hand with little or no research. Single fund investing is old hat. So a recommendation of just one fund (on larger amounts) suggests laziness or inability to give decent advice. There should be an investment strategy in place and you should enquire as to what this will be. There are different strategies out there and you should expect differences with different advisers/individuals. Investing has a lot to do with opinion and opinions will differ. However, if there is no particular strategy being used, then its a bit hit and miss as to what you will get. So ask questions about how its going to work.

With £500k you should be able to dictate very good terms. Less than the FSA average of 1.8% initial commission and 0.5% fund based. Any adviser taking more than that is being greedy and fee basis would almost certainly be cheaper.

cheerfulcat

Aegis wrote: »

Learning is all well and good with a few thousand that you can spare, but with half a million, you really should be sure that what you're doing is based on thorough research, preferably by someone whose job is to invest such amounts!

Not necessarily. I agree on the thorough research but it is perfectly possible to manage that sort of amount oneself just as well as ( possibly better than ) a professional advisor.