Financial Advisors cagey

bostonerimus

Thrugelmir wrote: »

I've worked in the same field all my working life. Still the same issues arise over and over again. People always think that they know better. Based on a limited amount of knowledge or experience. That's the the cyclical nature of life.

I agree, hubris is the enemy....that goes for you, me, IFAs and even Mark Carney and Christine Lagarde.

dunstonh

Personally, I would have thought that they would include it the the warning they are always give on the phone (ie when they say "We are obliged to tell you that figures can go down as well as up...etc etc' that sort of thing).

FCA requirement is that risk warnings for advice are applicable to the advice given and you don't give every risk warning going for every option. (COBS 19.7 Retirement risk warnings)

As it happens, retirement options risk warnings was an exam question for me a few weeks back.

Nothing was said like, 'We are obliged to tell you that for pensions under 30,000 pounds you are not obliged to use an FA but it may be advisable for you to do so'. I would certainly have remembered that!

That is because it is not a risk warning.

nd that this guy was trying to get me to sign something that he sent me really quickly so that he could deal direct with my pension company made me a bit wary, before I'd even had a chance to think about what he'd sent me.

The letter of authority is standard fare. IFAs have to write to the provider asking a range of questions about your scheme to allow the adviser to give advice. Ideally, you get that info before the second appointment otherwise the adviser cant really tell you much.

So the person who suggested that the client's best interests should be taken into consideration is something that I agree with.

The client's best interests are taken into consideration. Indeed, it is the cornerstone of advice. The problem is that you do not know your best interests at this stage. And the adviser won't know either until they get the information.

Yes, I did ask for advice but had absolutely no idea that for what seems to be a simple transaction (ie take tax-free 25%, the rest into an annuity or drawdown scheme) that the fees would be so high.

They dont have to be as high as that. I got a quote for a job and there were tens of thousands of pounds difference in the quotes. You will get cheap, reasonable and expensive in all trades.

However, your comments do indicate that there is a need for advice as it currently stands. You dont know what you want. you have listed two options but there are more. The adviser's role is to find out about you and recommend the most appropriate solution. The £30k rule has no impact on the adviser whatsoever when doing that.

HappyHarry

Around 95% of the work I do for clients could, in theory, be done by those clients themselves. Most clients don't even know there are activities that can only be carried out with advice.

If I were to point out to new and existing clients that they could do the work themselves, I think they would find that rather strange.

As I would find it strange if I asked a builder to quote for an extension, and they were to point out I could build it myself.

MK62

A key difference though is that there is no regulation forcing you to use a registered builder even though you may be capable of building it yourself.....

nrsql

When I tender for contracts (IT) I often tell clients that using me isn't cost effective, that they could do with someone less experienced.
I consider this a duty to the client.
In a contract I also tell them when they could do without me. In fact I've just had that conversation with my current main client - the result is that they are always afraid to lose me for quite a while but that's their option.

HappyHarry

MK62 wrote: »

A key difference though is that there is no regulation forcing you to use a registered builder even though you may be capable of building it yourself.....

There are very few circumstances under which you must use a regulated financial adviser for advice, i.e. when transferring a pension with safeguarded benefits. Most advisers don't have the permissions to carry out such activities, and so 100% of their work could be done by the client themselves.

(Without trying to shoot down my own position, I believe that there are regulations around certain gas / electrical works when building an extension that do require a qualified professional to undertake?)

MK62

Haha.....we are splitting hairs here...!!!55357;!!!56841;

I have no argument against people seeking out and paying for the services of an IFA. Or with any fees they then negotiate between them...no different to any other business transaction there.

It's just the mandatory nature of it in some cases......

However, not having a go at IFAs ....they merely implement the regulations.....

Malthusian

nrsql wrote: »

When I tender for contracts (IT) I often tell clients that using me isn't cost effective, that they could do with someone less experienced.

That's not the issue here as there is no reason to think that the OP using an IFA wouldn't be cost effective, and many reasons to think it would (see Dunstonh's posts).

The contention here is that the OP's IFA should have tried to dissuade her from using their services even though using their services was probably a good idea, simply because she had an erroneous impression that the law required her to seek advice (which it didn't).

Alibert

If the op had approached the IFA making it clear that she didn't want advice, I am sure the IFA would have been happy not to offer her any :-)

nrsql

Malthusian wrote: »

That's not the issue here as there is no reason to think that the OP using an IFA wouldn't be cost effective, and many reasons to think it would (see Dunstonh's posts).

The contention here is that the OP's IFA should have tried to dissuade her from using their services even though using their services was probably a good idea, simply because she had an erroneous impression that the law required her to seek advice (which it didn't).

The OP should have said why they wanted the services - at which point the IFA should say it wasn't necessary but they may be able to add value. Similarly the IFA should ask what the OP was looking for with the same result.
Sounds like it wasn't going to be a harmonious partnership.