IFA Ethics question

Aegis

Malthusian wrote: »

So Fred246 doesn't think IFAs should service people who have enough money to pay for advice but he does think they should service people who don't have enough money to pay for advice.

Normally you're on dodgy ground when you say someone has a vendetta as you can't read their minds. However in this case Fred246 clearly does have a vendetta against IFAs, as it's the only explanation for why anyone would think that a profession should work for free until they go bust.

Frankly he comes across as a few sandwiches short of a picnic.

bostonerimus

It's a tough world out there. IFA's are people and so there will be a range of ways they do business, hopefully all complying with the legal standards of practice, but in the end they are in it for the money. The OP's post highlights why you are the best person to look after your own money. Most people are capable of managing their own money and will save a lot of it in the process.

fred246

In the 1980s my dad was retired off early. There were over 10 of them. An IFA attended their workplace and his company name made him sound like a retirement specialist. He gave them a lecture and they thought he was marvelous and trustworthy. He told them he would be "with them all the way through their retirement. He would be continually analyzing their portfolios and recommending changes." He charged them 10% of their lump sum and invested their money. My dad's was 100% invested in a UK income fund. I was only a teenager but I remember thinking "wow, they have spent 40 years earning their lump sum and he has earned the same in one lecture." After all the cheques had been cashed and the paperwork finished he sent them a letter telling them that he had taken early retirement and they should find a new adviser. They never bothered about his charges but they couldn't cope with his complete dishonesty. They had been legally conned. My dad never talked to another adviser in his life. I watched IFAs throughout my career and always attended their seminars but never gave them any business. It was so obvious watching their behavior that they are only interested in their own profits.

TBC15

As with all trades you will get craftsmen and charlatans.

One bad experience should not brand an entire trade.

fred246

It's not one bad experience. I could go on and on. I think if you have a lot of money in an account paying 0.1% interest you should engage an IFA if you don't want to DIY. Investments make money so they will take profits and let you have some if there's enough. Just don't think an IFA is a nice person who will always help you with their finance. They have to have a way of them making lots of money out of you before they will accept you as a customer. If you have a lot of money and then they will quote a percentage like an estate agent does. Otherwise they will charge a ridiculous fee so if you haven't got much there will be hardly any left. In these circumstances IFAs just seem to walk away. There's not enough profit here. Goodbye.

shinytop

They have to have a way of them making lots of money out of you before they will accept you as a customer.

Isn't that largely true for anyone who supplies services as part of a profit making business? I have come across lots of tradespeople who obviously (by over-quoting or not quoting) don't want to work for me because the job isn't profitable enough. I also, in my professional world, regularly advise my employer not to offer a particular service if it won't make anough profit.

I've had a bad experience with a plumber. I know one or two others who have too. Some of them are obviously cowboys. It doesn't make me want to bad mouth all plumbers at every opportunity.

fred246

My mistake was thinking that an IFA would act in their customer's interest rather than their own interest. They always put their own interests first. I used to think that they would tell me what was good for me. Their priority is always to do what is best for them.

dunstonh

n the 1980s my dad was retired off early. There were over 10 of them. An IFA attended their workplace and his company name made him sound like a retirement specialist.

IFAs did not exist until 1988. At that time, the market was dominated by insurance agents. How can you be so sure it was an IFA?

He charged them 10% of their lump sum and invested their money.

In the 80s, charge based advice was unheard of. It was commission back then.

My dad's was 100% invested in a UK income fund.

By modern standards that would not be good advice. However, it would have turned out very well for him.

I watched IFAs throughout my career and always attended their seminars but never gave them any business.

I call BS. If you have watched IFAs throughout your life then how is it that you know nothing about them?

You have such a chip on your shoulder and it seems it based on a complete lack of understanding.

fred246

dunstonh wrote: »

IFAs did not exist until 1988. At that time, the market was dominated by insurance agents. How can you be so sure it was an IFA?


In the 80s, charge based advice was unheard of. It was commission back then.



By modern standards that would not be good advice. However, it would have turned out very well for him.

I call BS. If you have watched IFAs throughout your life then how is it that you know nothing about them?

You have such a chip on your shoulder and it seems it based on a complete lack of understanding.

I know it was an IFA because it is written on the paperwork. Doesn't really matter if commission or charge he still took a massive amount of money from each of them. Luckily I did see less IFAs as my career progressed. With no commission their numbers decreased. The last one gave two seminars in which she gave out incorrect information. I ended up with an interesting email trail with our pensions officer. She wouldn't just say the IFA is talking rubbish. Trying to be diplomatic I guess. She kept stating the facts which were opposing what the IFA had said but wouldn't actually say the IFA was talkiing what you would call BS.

justme111

I suppose in the end any person ( in this case trade person) does what is best for them .. It's just that with a plumber it is quicker and easier to see whether their job holds than with an IFA. Actually with an IFA one possibly would never know as one would have to have quit a bit of knowledge to be able to tell. Having to trust them blindly is unnerving and makes one very vulnerable . From multiple posters who were advised pru funds that are not great we know that those who do not recommend the best are not isolated examples; laziness seem to be general. I am not sure what the answer to it is