[deleted.]

[Deleted User]

"I believe the IFA uses FE analytics to analyse the portfolio. There is no exclusive link or conflict of interest." - OP

You mean this outfit?
https://www.fe-fundinfo.com/en-gb/channels/financial-advisers/

Why would you think that their advice is impartial?
Just playing devil's advocate here but: since FE have been supporting the fund industry for twenty years and IFAs are prohibited from taking commission from the funds they recommend, what is the transactional relationship between FE and an IFA?
If the service is free to an IFA, then FE can only be charging the funds they recommend to the IFA, assuming FE is not a charity.

SonOf

Why would you think that their advice is impartial?

FE do not provide advice. They provide data and analysis. The adviser is the one that uses that data and analysis and gives advice.

Just playing devil's advocate here but: since FE have been supporting the fund industry for twenty years and IFAs are prohibited from taking commission from the funds they recommend, what is the transactional relationship between FE and an IFA?

The IFA pays a fixed fee a year to FE (based on the number of users the IFA has at a firm - i.e. a licence per user). FE provides data on assets in all fund universes and anything quoted on the LSE (and potentially other markets if you pay for that data).

Not sure what you are getting at but I suspect you are a bit confused over what FE Analytics does. Many posters here will use the cut down consumer version called FE Trustnet.

[Deleted User]

FE do not provide advice. They provide data and analysis. The adviser is the one that uses that data and analysis and gives advice. Son Of .

Uh huh. Like Hargreaves Lansdown didn't provide advice to a quarter of a million investors who found they were stuck with Woodford funds?

My suspicion is that FE promote a fund like Google promote a website - according to their interest.

Is the diversion by FE not simply a "workaround" the regulation that an IFA must not profit from a recommendation?

Radiantsoul

ZingPowZing wrote: »

FE do not provide advice. They provide data and analysis. The adviser is the one that uses that data and analysis and gives advice. Son Of .

Uh huh. Like Hargreaves Lansdown didn't provide advice to a quarter of a million investors who found they were stuck with Woodford funds?

They didn't provide advice in the legal sense. They merely promoted the product, perhaps now people are more aware that this is because it benefited HL more directly than HL customers..

[Deleted User]

it benefited HL more directly than HL customers. - Radiantsoul

Understatement of the month.

bostonerimus

SonOf wrote: »

Transaction fees are nothing to do with the IFA though. And in reality, most sensible investors ignore the transactions costs as its an artificial calculation that includes some profit and loss.

From an IFA perspective the transaction fees might be irrelevant as they won't be getting them in their pocket, but they come out of the investor's pocket and if they are ~0.2% they should be considered..as the OP is doing.

You pretty much eliminate every single investment portfolio out there then.

Damn, then it looks like I haven't been investing at all for the last 30 years.

Maybe it would eliminate pretty much any portfolio from an IFA/FA, but there are is an infinite number of funds with the smallest allocation at 10%. That would give you a 10 fund portfolio and you could slice and dice pretty well with that without the need for multi-asset funds.

SonOf

Uh huh. Like Hargreaves Lansdown didn't provide advice to a quarter of a million investors who found they were stuck with Woodford funds?

HL provided marketing. Some people may claim that they thought it was advice but they are mistaken. Sure, there may be questions being asked on why certain funds were being promoted by HL on its Wealth list when they should not have been. After all, HL had Woodford Income on there right up until the end. Yet the independent FE told IFAs that they should not be using Woodford Income back in 2017.

FE provides data and analysis. Not even closely comparable to FE. FE is not a consumer platform and does not sell products to consumers. It doesnt need to promote any investment as it gets no income for doing so.

My suspicion is that FE promote a fund like Google promote a website - according to their interest.

FE do not promote funds. Your suspicion is unfounded and completely bonkers, to be honest.

Is the diversion by FE not simply a "workaround" the regulation that an IFA must not profit from a recommendation?

What do you mean by diversion?

I'm sorry but you seem to be jumping to some rather strange assumptions and comparing companies that have absolutely nothing in common.

SonOf

From an IFA perspective the transaction fees might be irrelevant as they won't be getting them in their pocket, but they come out of the investor's pocket and if they are ~0.2% they should be considered..as the OP is doing.

I suggest you read up on transaction charges and MIFID II. It's something that does not get disclosed in the US. It has some merits in principle but is highly flawed. Do you really think that profit and loss should be shown as a fee? And if you are in a fund that is going to have a high level of indirect ancillary costs, is it fair to compare those with those that do not? e.g. property funds where they have to pay cleaners, surveyors, decorators etc. The cost of those is shown in the TC.

TCs are the same whether the person is a DIY investor or an advised investor.

Damn, then it looks like I haven't been investing at all for the last 30 years.

Maybe it would eliminate pretty much any portfolio from an IFA/FA, but there are is an infinite number of funds with the smallest allocation at 10%. That would give you a 10 fund portfolio and you could slice and dice pretty well with that without the need for multi-asset funds.

If you build a portfolio of single sector funds then you will need around 10-15 funds to cover all the major sectors. So, you will have areas less than 10%.

The UK is about 4% of the global economy. So, if you follow the method of matching weightings by country, how do get around the UK being single digit?

[Deleted User]

SonOf wrote: »

FE do not provide advice. They provide data and analysis. The adviser is the one that uses that data and analysis and gives advice.



The IFA pays a fixed fee a year to FE (based on the number of users the IFA has at a firm - i.e. a licence per user). FE provides data on assets in all fund universes and anything quoted on the LSE (and potentially other markets if you pay for that data).

How much is that?
How did the OP's adviser get from there to the finely calibrated portfolio presented to his client?
Questions for the OP to his IFA, just for peace of mind.

[Deleted User]

SonOf wrote: »

I suggest you read up on transaction charges and MIFID II. It's something that does not get disclosed in the US. It has some merits in principle but is highly flawed. Do you really think that profit and loss should be shown as a fee? And if you are in a fund that is going to have a high level of indirect ancillary costs, is it fair to compare those with those that do not? e.g. property funds where they have to pay cleaners, surveyors, decorators etc. The cost of those is shown in the TC.

TCs are the same whether the person is a DIY investor or an advised investor.



If you build a portfolio of single sector funds then you will need around 10-15 funds to cover all the major sectors. So, you will have areas less than 10%.

The UK is about 4% of the global economy. So, if you follow the method of matching weightings by country, how do get around the UK being single digit?

Sector funds are for active investors taking bets.

You “get around” of UK at 4% by buying a single fund covering all developed countries or all developed countries outside N America or a single fund covering Europe, take your pick.