IFA ongoing fee..Why pay?

SonOf

It is amazing how you could compare someone with all those years of study and practical experience to an IFA with minimal study who just fills a few forms in.

I would love to see how long it would take you to become qualified as an IFA. Probably around 3 years to the basic level. Then throw in some level 6 (degree level) exams with it and it would probably be another 3-5 years on top.

And like most professionals, there is ongoing professional standards that require periodic testing.

If degree-level qualifications count as minimal study then god help every profession out there, regardless of what it is.

capital0ne

ZingPowZing wrote: »

Is there any evidence that, overall, Financial Advisers have lifted the performance of stocks and funds across the industry?

Because otherwise, they are leeching from the industry.

You'll never find any evidence or league tables - its a closed shop
By all means use an IFA and check on what he/she advises and does, you'll soon see that you can do it yourself and save a bundle of money.

If you don't learn or can't be bothered that's up to you, but it's not difficult.
If you have enough funds to warrant using an IFA you're probably clever enough to DIY

Good luck

bowlhead99

capital0ne wrote: »

You'll never find any evidence or league tables - its a closed shop

You'll never find any 'league tables' for IFAs because it is hard to quantify their performance.

The objective of an IFA is to meet their customers' needs.

The customers will all have different objectives. For example some may be young risk-takers who want to be set up with a volatile and high risk portfolio while making maximum use of their tax allowances. Others may be looking to grow their wealth while keeping to a low level of volatility and not wanting to suffer drops of more than 20-25% in any given year. Others may be in the de-cumulation phase of their pension plan and looking to take a reliable income without eroding the pot too heavily.

Some may have £1m to invest while others will have £0.05m to invest, and those two groups of investors will find that the investment solution for one may be more complex (and perhaps over time, more lucrative) than the other, while the one with the bigger pot might also find that the advice costs are a lower percentage of their annual returns than the other, because it is inefficient to buy professional advice when the professional is advising on only a small amount of pounds.

Different advisors across the country will have a different mix of customers. So the success factors will be different. An advisor that provided a 5% return delivering 8/10 of what one investor wants (in terms of volatility, liquidity and tax efficiency) may be scored better by that investor in a satisfaction survey than a different advisor providing a 6% return to a person who had different expectations. Also, some investors don't know what they really want and are only able to give a 'score' with hindsight after a decade. So it can be quite fruitless to produce a 'league table' of advisor quality after watching a year of returns.

If you have enough funds to warrant using an IFA you're probably clever enough to DIY

For some this will be true, though being clever enough is not the same as having both the time and inclination to do it.

Also, I know some people with £250k of investible assets (perhaps a threshold for being able to buy worthwhile initial advice at 1-2%) who are, colloquially speaking, dumb as sh1t, and would be better off buying advice than trying to do it themselves and screwing it up.

atush

AlanP wrote: »

I took it mean: not all IFAs.


You, and Fred, seem to lump them all together as leeches on your wealth.

Some are, some aren't same as some Doctors are good and some aren't.

Why don't you both get over it and move on with your lives?

Couldnt be better said

fred246

Well that was interesting. I've never known the cost of private medicine. It looks like an annual glance at a pension portfolio from an IFA costs the same as about 10 consultations with a Harley Street doctor. I know IFAs overcharge but that really is ridiculous.

[Deleted User]

What a difference a year makes.

BananaRepublic

SonOf said:

It is amazing how you could compare someone with all those years of study and practical experience to an IFA with minimal study who just fills a few forms in.

I would love to see how long it would take you to become qualified as an IFA. Probably around 3 years to the basic level. Then throw in some level 6 (degree level) exams with it and it would probably be another 3-5 years on top.

And like most professionals, there is ongoing professional standards that require periodic testing.

If degree-level qualifications count as minimal study then god help every profession out there, regardless of what it is.

I do believe that IFA’s provide a service, and are skilled, but I don’t for one minute believe it takes 6-8 years of full time study. From what I’ve seen it’s a small fraction of that. The first IFA I met struggled with basic writing skills.

Oddly enough all the ones I’ve met were introduced to me by other professionals, presumably via backhanders. 

[Deleted User]

Ah Son Of, 
Liked to compare the IFA trade to being a doctor.
Not seen that comparison much since Covid-19. 

ChilliBob

I spoke to an ifa yesterday, they were keen to point out they were Chartered and part of some Open network. Not sure if they counts for much or not but they did highlight it.

Interestingly enough, they seemed a lot more interested in tax minimisation than actual investment in the first call. 

[Deleted User]

cloud_dog said:

ZingPowZing wrote: »

Also, can we please stop likening financial advisers to doctors?

Seriously? I can only assume you really have not had to engage with doctors for anything more serious than a sore throat. The medical profession has virtually zero oversight, what is has is toothless. I would place my trust in IFAs above doctors who are just above estate agents.

Pearl of wisdom from cloud_dog