Investment pension advice

AnotherJoe

MaxiRobriguez wrote: »

Is it normal for an IFA to setup a portfolio for a client which contains one single fund?

I've never actually needed to hire an IFA but that just seems incredibly lazy.

Wow. Just "wow".

The job of the IFA is to choose the appropriate investment not arbitrarily come up with a complex plan that will take them more time, look better, but be worse. If with their experience they can do it in 5 minutes and use one fund thats right, all the better.

MaxiRobriguez wrote: »

Fair enough. it just feels like advice that could be gotten at with a five minute google search, although yes I don't know what facts the IFA based their decision on.

Reminds me of this old saw
The Graybeard engineer retired and a few weeks later the Big Machine broke down, which was essential to the company’s revenue. The Manager couldn’t get the machine to work again so the company called in Graybeard as an independent consultant. Graybeard agrees. He walks into the factory, takes a look at the Big Machine, grabs a sledge hammer, and whacks the machine once whereupon the machine starts right up. Graybeard leaves and the company is making money again.
The next day Manager receives a bill from Graybeard for $5,000. Manager is furious at the price and refuses to pay because the hammer cost $5 and it only took him a minute.

Graybeard assures him that it’s a fair price. Manager retorts that if it’s a fair price Graybeard won’t mind itemizing the bill. Graybeard agrees that this is a fair request and complies.
The new, itemized bill reads….
Hammer: $5
40 years of work experience leading up to knowing exactly where to hit the machine with hammer: $4995

bostonerimus

AnotherJoe wrote: »

Wow. Just "wow".

The job of the IFA is to choose the appropriate investment not arbitrarily come up with a complex plan that will take them more time, look better, but be worse. If with their experience they can do it in 5 minutes and use one fund thats right, all the better.



Reminds me of this old saw
The Graybeard engineer retired and a few weeks later the Big Machine broke down, which was essential to the company’s revenue. The Manager couldn’t get the machine to work again so the company called in Graybeard as an independent consultant. Graybeard agrees. He walks into the factory, takes a look at the Big Machine, grabs a sledge hammer, and whacks the machine once whereupon the machine starts right up. Graybeard leaves and the company is making money again.
The next day Manager receives a bill from Graybeard for $5,000. Manager is furious at the price and refuses to pay because the hammer cost $5 and it only took him a minute.

Graybeard assures him that it’s a fair price. Manager retorts that if it’s a fair price Graybeard won’t mind itemizing the bill. Graybeard agrees that this is a fair request and complies.
The new, itemized bill reads….
Hammer: $5
40 years of work experience leading up to knowing exactly where to hit the machine with hammer: $4995

This story assumes that some hard to acquire specialised knowledge is required to solve the problem. That might be the case with hammers and machines, but for most financial situations it simply isn't. The basic knowledge is available on the web and from lots of books and most people's situations aren't complicated. The IFA is mostly useful from a psychological perspective and to stop people from panic selling. Those are enormously important in financial success, but by following a few simple rules the IFA is usually not necessary and is a waste of money.

OldMusicGuy

AnotherJoe wrote: »

Graybeard assures him that it’s a fair price. Manager retorts that if it’s a fair price Graybeard won’t mind itemizing the bill. Graybeard agrees that this is a fair request and complies.
The new, itemized bill reads….
Hammer: $5
40 years of work experience leading up to knowing exactly where to hit the machine with hammer: $4995

Fast forward to 2019. Manager trawls internet, finds video showing how to get machine working by hitting it in the right place. Manager also joins forum for machine users and asks "will this method work" to which several people that have tried it says yes, it works fine. Finally, manager goes to Amazon and buys book entitled "How to fix machines yourself" (probably written by John Edwards) which covers various versions of the machine and has fixing methods for all of them.

Graybeard wonders why he is no longer getting consulting gigs.......

SonOf

OldMusicGuy wrote: »

Fast forward to 2019. Manager trawls internet, finds video showing how to get machine working by hitting it in the right place. Manager also joins forum for machine users and asks "will this method work" to which several people that have tried it says yes, it works fine. Finally, manager goes to Amazon and buys book entitled "How to fix machines yourself" (probably written by John Edwards) which covers various versions of the machine and has fixing methods for all of them.

Graybeard wonders why he is no longer getting consulting gigs.......

Or alternative scenario.....

Manager goes on the internet and finds a solution that sounds so simple and ends up breaking it.

DIY only works well if you put the effort in to do it well. Many do it well. Many make a right pigs ear of it.

Linton

Having seen the example of the Big Machine the hammerites convince themmselves and try to convince others that all problems can be solved with simple use of a sledge hammer and that someone who actually knows things about Big Machines and charges for the expertise is a self serving fraud.

AnotherJoe

bostonerimus wrote: »

This story assumes that some hard to acquire specialised knowledge is required to solve the problem. That might be the case with hammers and machines, but for most financial situations it simply isn't. The basic knowledge is available on the web and from lots of books and most people's situations aren't complicated. The IFA is mostly useful from a psychological perspective and to stop people from panic selling. Those are enormously important in financial success, but by following a few simple rules the IFA is usually not necessary and is a waste of money.

Thats true for hose who have the inclination to learn and arent frightened by the prospect of "losing all their money when theres a crash" and "I dont want anything risky like the stock market". Which leaves a lot of people unable to DIY.



i am an avid DIYer and often point people at the "usual places" mentioned for learning but the fact is some people get analysis paralysis, some get frightened of "risk" (Theres one poster here who shall be nameless who has oodles of money, DB's, DC's, SP's, cash up the wazoo, time to study and still cant make a simple decision on one part of his pension and asks the same Q in different ways every month)
And lets face it some people are dumb and just will make the wrong decisions, and others they will do the reading, make the right decsion, put their £1M in an index and then will take it all out when it drops £10k the next morning. There was a soldier (whose job involved being shot at and blown up !! ) who panicked and sold up when, from memory, his £50k dropped £500.

Linton

It is sad but most people have little experience of learning from reading, especially about concepts that are completely foreign to their everyday experience. If that get that far with investing taking what they have learned and applying it to life-changing amounts of money could be completely daunting.

[Deleted User]

SonOf wrote: »

That is not a tracker fund.
.

I assume it's this fund
https://www.fidelity.co.uk/factsheets/?id=F00000OOBE&idCurrencyId=&idType=msid&marketCode=

It says it's a "Volatility Managed" fund but I think it's more of a tracker

SonOf

newbinvestor wrote: »

I assume it's this fund
https://www.fidelity.co.uk/factsheets/?id=F00000OOBE&idCurrencyId=&idType=msid&marketCode=

It says it's a "Volatility Managed" fund but I think it's more of a tracker

Its not a tracker. It is an unfettered fund of funds in operation and is a multi-asset fund.

It has an element of active management in decision making as it is volatility managed. i.e. it aims to remain within a target volatility range and will adjust weightings if necessary to achieve that.

cloud_dog

SonOf wrote: »

Its not a tracker. It is an unfettered fund of funds in operation and is a multi-asset fund.

It has an element of active management in decision making as it is volatility managed. i.e. it aims to remain within a target volatility range and will adjust weightings if necessary to achieve that.

But, I thought identifying funds to use was easy peasy... I'm sure I just read it :lipsrseal