Financial Advice

LHW99

Always worth reading up on investing first, as it helps having the conversation with an IFA if you have some background to what he is asking / telling you.
You can speak to two or three first, just to get a feel for what they offer, then choose the one you can get on with / understand, as its important that you are happy with (as well as trust) whoever you choose.

want_to_save

look for an ifa on unbiased

fred246

232607 wrote: »

I was more alluding to the fact the banks on mass have previously engaged in practices that have best been morally wrong, at worst illegal.
The vast majority of IFS's will have the interest of their clients as a priority, whilst obviously needing make a living themselves.

IFAs have previously engaged in practices that have been morally wrong. Why do you think commission has been banned? I remember the days well when IFAs got commission for selling products. "If only I could find someone to sign this form I would make hundreds". "Hello Fred. Could I come and speak to you about pensions please?". As a young professional I couldn't do my job because I'd be receiving about 5 phone calls a day from IFAs just trying to get commission. Only one pig could get their snout in the trough and they made your life a misery.

fred246

tacpot12 wrote: »

You should ask the IFA what evidence they can provide that their discretionary management option is better than the DIY option or an irregular or regular review A good IFA will be able to demonstrate the return they achieve on each of their model portfolios. (They will have a model portfolio of each category of risk and/or investment aim). You will have to decide for yourself what return you can achieve if you self-manage - you need to be very strict with yourself here - it is very tempting to believe that you can outperform the IFA; but can you really do so given the fact that they do the work on a fulltime basis?

What a load of rubbish. Past performance does not guarantee future returns. Anyone can look at the HL website and pick the funds that have done the best in the last 5 years and tell the customer those were the ones they would have chosen.

fred246

bostonerimus wrote: »

Read a few books on investing

And then DO IT YOURSELF.

grey_gym_sock

a few decades back, there were a lot of dodgy "advisors" (who were really salespeople), who sold people financial products because the product providers paid the "advisors" commissions. that has nothing in common with how IFAs operate now. they can only be paid by explicit fees, which they have to agree with the customer, not by hidden commissions.

bad advice is unlikely to be an issue if you use an IFA now. a more likely problem to encounter is a greedy IFA, who charges more than a reasonable amount.

even a reasonable amount (considering the costs of running a business as an IFA, etc) can come to a lot of money over the years. it can save you a lot if you learn how to DIY competently. however, if you mess it up badly enough, using an IFA would be a lot cheaper.

generally, IFA and DIY are the 2 viable approaches.

dunstonh

IFAs have previously engaged in practices that have been morally wrong.

I would be very interested to know what I have done wrong. There are other IFAs on the board as well and you may wish to say what they have done wrong as well.

Why do you think commission has been banned?

1) IFAs were already heading that way with fee only products appearing from around 2005 (long before RDR was even mentioned)
2) MiFID was going that way.
3) the credit crunch saw a greater focus on targets and processes that introduced bias. Banks in particular but also other salesforces were putting pressure on the staff that was encouraging missales. By moving to fee basis, it remove any hint of bias. (even though the FSA (as it was) had never found any widespread evidence of commission bias.

I couldn't do my job because I'd be receiving about 5 phone calls a day from IFAs just trying to get commission.

What a load of BS.

nrsql

To be fair IFAs are probably the best bet if you want advice.
But they will still do the minimum they can get away with - who wouldn't.

And I suspect IFAs dropping commission early was because they saw the writing on the wall. A few vocal IFAs on boards like this pointing out the issues would cause them to get ahead of the game. They don't have the gullible client base that other institutions have, their clients are going to them because they've done a bit of research and are likely to find out things. All meaning they are likely to be more reliable unless they are thinking short term.

HappyHarry

nrsql wrote: »

But they will still do the minimum they can get away with - who wouldn't.

No. They (well at least I, and many other advisers I know) don't.

Nor do my clients, many of who, have become wealthy by running their own businesses, or being the best that they can be, through not doing the minimum possible.

IFAs have previously engaged in practices that have been morally wrong.

What, all of them? Or just the handful that made the headlines and should be strung up for it?

nrsql

HappyHarry wrote: »

No. They (well at least I, and many other advisers I know) don't.

Maybe I didn't put it very well.
They will to maximise their benefit for the minimum work.

That could mean finding out as much as possible about their clients and their profession to grow their business or it could mean doing as little as possible and not minding if they don't provide the best service or retain clients (plus there will be the occasional crook).
It will be difficult to tell which you are dealing with.