Discretionary Fund Managers

LHW99

A handful of massive firms with a limited offering and approach.

Who perhaps also won't service anyone with a portfolio that's less than 7 figures.

wiltshiregirl69

dunstonh wrote: »

It all comes down to the FCA's systems and controls requirements and liability. The bigger you get, the greater the level of control you have to exercise over the advisers. The more the firm restricts, the lower the costs and risk liability.

Small firms get little or no cost benefit by restricting. Larger firms get significant gains by restricting and the costs and risks of remaining independent become undesirable.

As mentioned higher up, you often find the restrictions initially are things like unable to do EIS, VCT, unregulated investments and things like that. That really isnt much of an issue in the mainstream market as less than 1% of the business is in those areas.

What you then find is you they realise that if they restrict the fund selection, provider selection, products available, it gets even cheaper and it speeds up the process. So, that mission creep from very little restriction to heavy restriction starts to occur.

Prior to 2013, IFAs could refuse to transact in high risk areas. After 2013, they could not. This is really when the move from IFA to FA started to pick up pace..

Ok - this is getting very confusing for a layperson to choose a decent financial advisor easily. I would like someone to advise on EIS schemes and tax planning alongside investment choices/funds and to advise holistically on my family finances long term. A very knowledgable hand holder. But I don’t particularly like the look of ‘for example’ a guy working in a small office with very little support - will he manage my money ok or go out of business?

I want a decent mid size IFA firm, local, very knowledgable, friendly and not too expensive or salesy. Do they even exist anymore. How on earth do you choose or find one. It certainly isn’t straightforward and all the regulation has done is limit the choice and produce another tier of wealth managers who everyone on here says to avoid like the plague.

dunstonh

Ok - this is getting very confusing for a layperson to choose a decent financial advisor easily. I would like someone to advise on EIS schemes and tax planning alongside investment choices/funds and to advise holistically on my family finances long term. A very knowledgable hand holder. But I don’t particularly like the look of ‘for example’ a guy working in a small office with very little support - will he manage my money ok or go out of business?

Most IFA firms are a cottage industry still. Work from home office still outnumbers office based. Remember what I said earlier about location and expectation. Rural vs City.

You can check the status of an adviser on the FCA register. Sometimes you have to be careful of the register as its history is only from 2001 (so any existing prior to that point have a 2001 start date) and interpreting the data is not always easy. For example, we went from a partnership to a limited company a few years back and it shows the start date of the current name as being just a few years ago. You have look deeper at the history to realise it has been going on much longer and full history doesnt go back before 2001 as I said. However, it is one way to see how long an adviser has been going.

I want a decent mid size IFA firm, local, very knowledgable, friendly and not too expensive or salesy. Do they even exist anymore.

Plenty of them. However, you may well find that those are the most successful types and because of that they do little in the way of advertising or raising their profile. They don't need to as business just comes to them easily. So no need to spend money on advertising or getting listings on trust-a-trader style sites etc. That makes your job harder as their lack of profile may put you off.

Audaxer

wiltshiregirl69 wrote: »

I want a decent mid size IFA firm, local, very knowledgable, friendly and not too expensive or salesy. Do they even exist anymore. How on earth do you choose or find one. It certainly isn’t straightforward and all the regulation has done is limit the choice and produce another tier of wealth managers who everyone on here says to avoid like the plague.

dunstonh wrote: »

Plenty of them. However, you may well find that those are the most successful types and because of that they do little in the way of advertising or raising their profile. They don't need to as business just comes to them easily. So no need to spend money on advertising or getting listings on trust-a-trader style sites etc. That makes your job harder as their lack of profile may put you off.

I can understand wiltshiregirl69's confusion because if I was looking for an IFA, I would also want a good mid size IFA firm. It seems incredible that if there are plenty of these firms, they are so hard to find. No wonder people end up going to big Wealth Management companies or bank investment advisers and end up with very costly advice for limited options. Unless they visit forums like this, they will probably never know they are paying over the odds and getting limited options, as they will not know there are cheaper and better IFA firms out there.