Basic Chat with an IFA

Simby

Lots of new users now.. might be worth a shot and some of us might benefit from your knowledge also

Brilley

6022tivo wrote: »

I don't want a proper job, I'm happy with where my things are. It was more a confirming process, especially over my pension funding and making sure I'm doing it the most efficient way.

?...might as well ask on here then...

Brilley

6022tivo wrote: »

I don't want a proper job, I'm happy with where my things are. It was more a confirming process, especially over my pension funding and making sure I'm doing it the most efficient way.

..so you do want a proper job then?....I am confused?

Albermarle

Not sure who your pension is with but some providers will offer guidance for free but will only offer advice for a fee. The guidance will be a bit vague and as soon as you start talking about details they would rather push you into paying for advice. Also I think a IFA or FA will never offer off the cuff advice and most would probably not get out of bed for £100.

6022tivo

Brilley wrote: »

..so you do want a proper job then?....I am confused?

I salary sacrifice 75% into a Aviva Fund that is pretty generic and company negotiated (Fee looks lowish) company pay their NI Saving and 10% as well.
I can log in and change funds if required.
I keep my salary to just under the Basic Tax Rate.

As far as I see it's savy and tax efficient, what else could they tell me to do?



I also have an old works pension that is final salary and I've been told to leave this alone as they don't really do them anymore. So wondering if this is the same advice? The final figure does not appear to be going up with inflation though? Not sure if it should?

6022tivo

Albermarle wrote: »

Also I think a IFA or FA will never offer off the cuff advice and most would probably not get out of bed for £100.

That is the issue, not really after advice, just a sounding board. As said, £120 was a figure I made up as for an hours lunch break, I though it was reasonable (Up north), but I did make the figure up.

Linton

6022tivo wrote: »

That is the issue, not really after advice, just a sounding board. As said, £120 was a figure I made up as for an hours lunch break, I though it was reasonable (Up north), but I did make the figure up.

An IFA, or come to that anyone else, cannot give you advice that you should put serious reliance on unless they have a good understanding of your personal circumstances, finances, objectives and attitude to risk. Even in a fairly simple situation that could well take much more than an hour especially as you may not have thought through exactly what you want to achieve nor considered what risks you are prepared to take to get there.



If you arent serious then its not worth seeing an IFA. I suggest you ask more specific questions here and see if that helps.

Brilley

Ref your old works pension, assume this is a DB scheme? It should go up each year. You could always contact the provider and ask them. You can also ask them for a "projection" as to what you could get if you took "now" (if you are 55 or over), and a projection if paid at 65. (Sometimes they will only give a projection up to the next 12 months).

You can also ask for a CETV. (NB If it is worth more than £30k and you think you want to transfer it you will need to get it "approved" by a registered FA...and they will charge you for this...possibly about 1% of the value.

bowlhead99

The problem is that professionals have to be very careful what they tell people, because a 'sounding board' or 'bit of guidance' can turn into advice or at least be seen as advice by the recipient.

Even without a contract, or a fee, a court can hold that a professional adviser had a 'duty of care' and was negligent in providing the advice (tort law rather than contract law).

Sure, you know you just went for coffee with someone and had a chat, and you're not planning on suing them if you later find out that something they said was inappropriate (or there was a much better thing you could have done better that they didn't tell you about, etc). But the adviser doesn't know that you are definitely not going to pursue a negligence claim against them, and we live in a litigious / compensation-culture society. People claim for having PPI a decade ago without even remembering they bought it, or remembering they bought it and that they were happy to pay the extra for it at the time but someone tells them they can claim it back by playing dumb. That's the sort of BS that people with professional advice businesses have to put up with, whether financial advice, legal, accounting, architecture etc etc.

So advisers can have a duty of care even without a fee, for advice on which people subsequently rely. If they are a professional and they discuss someone's financial affairs and charge a fee, they definitely did provide a professional service, otherwise why would they be invoicing. So they would have to go back to the office and document a full transcript of the conversation and identify all the salient points. If they did not give enough caveats and do enough backside-covering, they could have an exposure. And without documented paperwork it's then a he-said she-said exposure, which is not great.

This is one of the reasons why solicitors and IFAs and other providers will give you a half hour high level introductory conversation for free. They can find out about your situation in confidence, but it is clear to everyone in the scenario of that first session that nothing is advice until you agree to proceed to paid advice or transactions, so they will take some personal details but don't need to go back behind the scenes and document the hell out of everything if you don't decide to proceed. Advisers need to do these sort of sessions to introduce themselves and their services and the time-cost of them doing them is something they can give away under their marketing budget to win over a prospective client or to identify for themselves whether it's the type of client they want.

What you have discovered is that the 'free half hour' is going to have limited usefulness, because you will inevitably come up with some specific questions, to which you don't want to just hear a vague answer that there are a range of options that might be suitable - you know the person you're sitting with will have lots of experience and be familiar with the common approaches, so you want to be told 'what do people in my situation generally do about this' - and also 'what do people in my situation do about it if they take advice from you' which might be a different answer.

And a professional would need to ask probing questions in order to determine some of the background info behind the 'my situation' to work out what it really is, and other things about your goals and objectives, before offering up a solution. And regardless of fee, that possibly ends up being advice, or at least has the liability risk of being 'seen as' advice, by the recipient, and the professional has a duty of care when he uses his skills and qualifications and experience to help someone.

It can be hard to nail down the exact difference in expectation in a social setting vs office setting and some advisers will naturally find it difficult to 'switch off' in a social setting such as a coffee shop or party, because they live and breathe the business of 'advice giving' for hundreds of hours a month. If you say you will pay them for it, well , it doesn't sound like it was informal. The lines are blurred. Whereas if you say you won't pay for it, it's easier to frame it as a pre-advice discussion and avoid liability problems, but an adviser who doesn't know you and knows you don't really plan to buy proper regulated advice from them in the end, may not have much appetite for that.

The problem is that people without much money to spend on advice are not well served by the advice community because the market is highly regulated. That creates good outcomes for people trusting advisers with large amounts of money; and creates good outcomes for advisers because although it is expensive to maintain your regulated status and guard against litigation, it's a 'barrier to entry' to the advice market for fly-by-night people without qualifications and regulatory approval and the compliance processes that go with it. But it creates poor outcomes for individuals needing cheap advice.

The issue is that nobody has really created a cut down 'sounding board' service for personal financial advice. A friend is in the law profession for example: solicitors can sometimes do drop-in sessions at citizens advice bureaux or similar, and after you get basic advice or ideas there you can sometimes be referred to a firm that can help you out pro-bono or help you obtain 'legal aid' so it doesn't cost you anything. But for financial advice, for people who have some money but not lots of money, there isn't an obvious equivalent - IFAs won't work pro-bono and there is no 'IFA-aid'.

Sorry if the above sounds like a lot of words saying why you won't get what you want, rather than offering a solution

As IFAs may be reluctant to have a cut-down 'not really advice', coffee shop 'sounding board' chat on anything and everything, it seems like you could be better seeking out someone who was NOT a professional adviser, who didn't need to worry about personal liability stemming from them owing you a duty of care because they weren't qualified or regulated, you weren't paying them and it was purely a social encounter with an enthusiastic amateur.

However, while there are various people here who come across as 'enthusiastic amateurs' - and a subset of them, I would be very happy to have answer my personal questions in real life as a 'sounding board' - you should recognise that if you are meeting with someone who isn't a professional adviser, the quality of the answers may be worse. This being because their experiences lie in what they themselves have come across in their life which will not necessarily be as comprehensive as what an IFA firm has come across; if a potential solution isn't relevant for their own circumstances they will not have explored it as thoroughly.

So, meeting with a random amateur not-qualified person steps neatly around liability problems but could result in a lower quality of sounding board. But the major problem with meeting an non-professional or ex-professional anonymous stranger in a social setting to get your sounding board, is the lack of the 'I' from 'IFA'. You don't know how independent and impartial someone is, and what vested interests they may have.

For example, knowing that you want some general guidance, someone solicits a meeting via personal message on the forum. You meet with them and talk about how you have money in various schemes here and there. They suggest you consolidate a couple of your savings pots into one account with London Capital & Finance, which turns out to be a scam, or SVS bonds which turned out to be inappropriately missold. Or a vintage wine investment scheme their friend runs. Or they tell you they had a great experience with a particular financial group who reviewed their pensions and sent them a free report, with a very competitive commission for implementing changes. What you don't realise is that they were a salesman all along and the hour in the coffee shop was just them talking randomly about your finances for 57 minutes with the hope of getting three minutes to subtly pitch their friend's pet project.

Though I am not the first to suggest it, my suggestion is to crowdsource your answers here. As you say, it can be hard work and people can be competitive wanting to say that their solution is best, tell you that the end game is wrong, tell you that you need to better define your end game, express disbelief in why you would have done what you've done, etc etc. If you crowdsource the answers to your questions, anything and everything will get shouted down and it can be hard work sorting wheat from chaff.

However, if you meet just one forum user in real life for coffee you don't know whether they are bearing wheat or chaff, and you yourself have to do all the critique of their answers and ideas. If you use a forum, everyone will tell you that the bond company or wine company or pension review company suggestion is terrible or wouldn't be suggested by anyone but a shill, etc.

Good luck.

Albermarle

I also have an old works pension that is final salary and I've been told to leave this alone as they don't really do them anymore. So wondering if this is the same advice? The final figure does not appear to be going up with inflation though? Not sure if it should?

Having an old final salary scheme you have probably two options:
1) Leave it alone and enjoy the guaranteed annual income when you take it. Regarding inflation linking etc you need to find the scheme details to be sure of the rules of the scheme ( they are not all the same )
2) Ask the scheme providers if they will provide you with a CETV ( cash equivalent transfer value) . These are offered in return for you transferring out of the final salary scheme ( into a DC scheme ) and the provider is then freed from the future liability of paying you a guaranteed income until you die.
Often the CETV will be temptingly large,but there are a lot of issues to consider before giving up a guaranteed income . Also if the value is above £30K you will have to pay a specialised IFA to analyse the situation and it will cost a LOT more than £100 !