Finding an Independent Financial Advisor with no vested interests!

AnotherJoe

brianfall wrote: »

They can still be paid commission on mortgages, equity release, general insurance, and protection insurance.

Do you plan to buy any of those products from one?

AnotherJoe

bostonerimus wrote: »

If you DIY you will definitely have an adviser with your best interests at heart and you won't have to pay commissions or fees either.

But they may be incompetent and buy you shares in a storage company or vineyards in Spain or trees in brazil, or just a very expensive poorly performing but well advertised fund.


Dont get me wrong, I DIY myself, but there are many people who shouldn't either through lack of knowledge, misunderstanding, or incompetence (or all of those).



Theres certainly been a shed load of DIY cockamie plans put forward in these forums and even the mundane spectacle of many of the posters on the MFW forum proudly paying off their mortgages ten years early and passing up many tens of thousands of pounds in high rate tax relief.

dunstonh

https://forums.moneysavingexpert.com/discussion/5900535/alternatives-to-stakeholder-pensions

We can now see from brians's new thread that he invested in a Virgin Stakeholder on DIY basis. So, that actually cost more than an IFA and was not a good investment choice (single sector investing)

That was back in the commission days too. So, Virgin kept all the commission for themselves despite it being a DIY purchase.

So, AnotherJoe's point about ability and knowledge applies here.

bostonerimus

AnotherJoe wrote: »

But they may be incompetent and buy you shares in a storage company or vineyards in Spain or trees in brazil, or just a very expensive poorly performing but well advertised fund.

I purposely didn't mention anything about ability. The question was about finding a truly independent advisor, not necessarily a good one.........The continual complaint that the DIYer might make poor decisions is obvious and rather pointless as the IFA might make poor decisions too. I think it should be taken as read that you should only DIY if you have the basic knowledge and skills required.

Malthusian

AnotherJoe wrote: »

Theres certainly been a shed load of DIY cockamie plans put forward in these forums and even the mundane spectacle of many of the posters on the MFW forum proudly paying off their mortgages ten years early and passing up many tens of thousands of pounds in high rate tax relief.

Very true. There was a particularly egregious "pensions v overpay mortgage" thread on the Affairs & Anxiety board recently (aka Marriage, Relationships & Families) in which 90% of the advice was objectively bad.

A drawback of these boards (by which I mean Savings & Investments, Pensions, and the other technical MSE fora) is that 90% of the regulars who answer questions have the skills required to DIY but 90% of the newbies who come here to ask those questions do not. This can give newbies the impression that DIY is a great idea when it may not be great for them.

True, some of those who ask a question here may gain those skills as a result of reading the answers and doing further research, but not all of them.

DIY investing requires the ability to understand the limits of your knowledge, process financial and other information, accurately value the future and the distribution of uncertain outcomes, and make decisions rationally and without bias. If you cannot do some or all of those, reading a forum thread will not magically change that.

bostonerimus wrote: »

The continual complaint that the DIYer might make poor decisions is obvious and rather pointless as the IFA might make poor decisions too.

Not pointless in the slightest. If the IFA makes poor decisions, the client is entitled to redress, and if the IFA can't pay the client will still get redress from the Financial Services Compensation Scheme up to £50,000 per person.

If a DIYer makes poor decisions, there is no redress.

brianfall

dunstonh wrote: »

We can now see from brians's new thread that he invested in a Virgin Stakeholder on DIY basis. So, that actually cost more than an IFA and was not a good investment choice (single sector investing). That was back in the commission days too. So, Virgin kept all the commission for themselves despite it being a DIY purchase. So, AnotherJoe's point about ability and knowledge applies here.

I'm happy to admit I had no idea what I was doing back then, and have very little idea what I am doing now. Hence trying to find an IFA!

atush

Try for a personal recommendation, or have a look at Unbiased.com

Marcon

brianfall wrote: »

I'm happy to admit I had no idea what I was doing back then, and have very little idea what I am doing now. Hence trying to find an IFA!

If an IFA doesn't advise on all classes of investments (including mortgages and the like), they can't now describe themselves as an IFA. They can only describe themselves as 'financial advisers' - but doesn't mean they aren't independent! Very confusing for the unwary and you can only wonder why the FCA thought that was a good idea.

wjr4

Marcon wrote: »

If an IFA doesn't advise on all classes of investments (including mortgages and the like), they can't now describe themselves as an IFA. They can only describe themselves as 'financial advisers' - but doesn't mean they aren't independent! Very confusing for the unwary and you can only wonder why the FCA thought that was a good idea.

I'm an IFA but don't give mortgage advice. I haven't even taken that exam as I know broadly about mortgages but don't want/need to give mortgage advice. I personally prefer to hand the mortgage advice to an independent mortgage adviser/broker.

dunstonh

Most IFAs (as advisers) do not do mortgage and insurance. The IFA classification only applies to the investment class. The IFA (firm) may have mortgage/insurance advisers but theoretically, they can be panel based. Although in reality, an IFA firm is going to be independent throughout.

The classfications are confusing and potentially misleading but investment, mortgage and insurance all have their own classifications.