How many people use an IFA?

BLB53

I have never used an IFA and prefer to manage my investments DIY which I personally find fairly straight forward but I accept others find investing confusing.

I follow a few sites such as Monevator
https://monevator.com/category/investing/passive-investing-investing/

and DIY Investor
http://diyinvestoruk.blogspot.com/

For me, the hardest thing is market volatility and especially with high equity allocation but if you can handle that and you are OK with platform and investment selections, then you probably do not need an IFA.

enthusiasticsaver

BLB53 wrote: »

I have never used an IFA and prefer to manage my investments DIY which I personally find fairly straight forward but I accept others find investing confusing.

I follow a few sites such as Monevator
https://monevator.com/category/investing/passive-investing-investing/

and DIY Investor
http://diyinvestoruk.blogspot.com/

For me, the hardest thing is market volatility and especially with high equity allocation but if you can handle that and you are OK with platform and investment selections, then you probably do not need an IFA.

I have done exactly the same up until now but to transfer the old pension into my SIPP I have to use an IFA as it is over £30000. None of the IFAS I have spoken to on the phone will talk about that in isolation which I kind of get after all how can they make a recommendation without all the information. Whether that means I will hand over control lock, stock and barrel to them I think depends on whether we think they can add value to our DIY portfolio we have managed ourselves up until now.

My alternative is to just leave the old pension as it is and let it pay out monthly which I am swaying to and fro on.

ggmf

enthusiasticsaver wrote: »

Goodness that sounds somewhat depressing but investments everywhere have not fared that well over the last 2 years I guess.

Indeed, the previous 10 years performance whilst various 'pots' were with Standard Life were very pleasing. Markets go down and may come back up again, hopefully, just hope the IFA starts to earn his management fees.

JonathanBFS

Why do most understand an IFA’s job is a single job on a product?

For me many are missing the service element of the role. I have a current client who without the correct advice and not considering his full circumstances would have had his mortgage into his 70s, would not realise the tax benefits of his income in his limited company, would not have understood relevant life, would not understand the charges and performance of his previous pensions, would not of known what to do with his recent unexpected windfall, would have found the whole process of doing things himself daunting. I see my role as providing a service to meet my clients goals, helping with changes in life events, providing a service and not just ‘0.5%’ to manage his pension. We set our agreement linked to service and what the clients needs are.

To much on this post assume the relationship with the client is almost transactional on a single piece of business. This is not the case, or you have the wrong adviser.

enthusiasticsaver

JonathanBFS wrote: »

Why do most understand an IFA’s job is a single job on a product?

For me many are missing the service element of the role. I have a current client who without the correct advice and not considering his full circumstances would have had his mortgage into his 70s, would not realise the tax benefits of his income in his limited company, would not have understood relevant life, would not understand the charges and performance of his previous pensions, would not of known what to do with his recent unexpected windfall, would have found the whole process of doing things himself daunting. I see my role as providing a service to meet my clients goals, helping with changes in life events, providing a service and not just ‘0.5%’ to manage his pension. We set our agreement linked to service and what the clients needs are.

To much on this post assume the relationship with the client is almost transactional on a single piece of business. This is not the case, or you have the wrong adviser.

Surely though, just as clients have different levels of knowledge and experience the level of service needed from a Financial advisor is different? Not all of us want a Financial advisor to advise on everything. So long as they have enough of a clear picture to give a recommendation on the product the client wants advice on that should be sufficient.

JonathanBFS

Then the client has the option of transactional. No ongoing service provided.

I agree not everyone does need ongoing advice. But to me it’s more than just managing a pension. This same chap was made redundant and at first wanted to know can I retire, what can I retire on, what will this look like. Again I understand some may feel they can do this themselves. But you don’t know what you don’t know. We deal with lots of different scenarios, circumstances. DIY you deal with your own. When talking through his options I could help him consider the finances and make an informed decision on his next steps. Which in the end is now self employed, and advice had been provided from transferring his old workplace scheme, topping up and making use of allowances, review on protection needs, understanding how his limited company can help fund his retirement. This is just a typical scenario under a service proposition which isn’t just a ‘manage my pension’ I didn’t come in to the industry for this type of work. For me it’s about building trusted long term relationships which the client values and has some choice to this effect.

Thrugelmir

enthusiasticsaver wrote: »

I only started investing myself around 5 years ago and am certainly not an expert but used the following principles.

Then you should consider yourself a novice. With investing you never will stop learning or gaining experience. I'd recommend a read of "Harriman's New Book of Investing Rules: The Do's and Don'ts of the World's Best Investors". A fascinating insight. That may get you to reconsider in some way your own approach to investing. Possibly a mix and match approach even. As that's certainly no one single principle that's better than any other. With many simply fads that run their course until there's no further upside. At which point people refocus their portfolios to another style, until again the wind changes.

Tardigrade1

There is no doubt in my mind that IFAs are poor value. If you are wealthy, and need eg estate/tax planning, it is far better to pay for the expertise than DIY, on the whole. For most other competent people prepared to do a little research, DIY is often best for most topics. Never use an IFA for "investment advice", and avoid %fees.



Having said this a DB transfer is a big deal, and can be tricky to understand with dodgy multiples etc -and I am also dubious regarding your reasons (better tax position? I doubt it; lump sums are far more likely to be less tax efficient than drip feed income). Another catch is that many people advising on DB transfers have a huge conflict - such as managing the future transfered assets, or a commercial relationship somewhere that implicitly encourages transfers. There is a good amount of regulatory focus on this, so such practices should be rarer now, but...


Because it is such a big deal, people want to see you have had advice because they fear being sued down the line for enabling you to make what is usually a very bad decision.

ComicGeek

Tardigrade1 wrote: »

There is no doubt in my mind that IFAs are poor value. If you are wealthy, and need eg estate/tax planning, it is far better to pay for the expertise than DIY, on the whole. For most other competent people prepared to do a little research, DIY is often best for most topics. Never use an IFA for "investment advice", and avoid %fees.

I run my own business, work long hours and have a young family. I don't have time to DIY my own investments. For me, our IFA is well worth their fee - I can make more money running my business than spending that time trying to DIY. Others may have more time available.

In my own work I come across lots of clients who have googled something and think they know better than someone with 20+ years experience in a specific field - a little bit of knowledge is dangerous....

Pension_Geek

A DB transfer Isnt just a big deal. You NEED to take advice to do it (if CETV over£30).

No IFA or adviser of any repute will give advice without knowing their clients full position.