Financial adviser retiring - Would like to manage money directly now

fred246

She is happy because every time she sees the financial adviser she has a little bit more money than last year.

NeilCr

fred246 said:

She is happy because every time she sees the financial adviser she has a little bit more money than last year.

And there you have it

She is happy with what the IFA is doing for her. As am I with my IFA. I see capital growth after taking out regular withdrawals. And I have to do nothing and I accept the fees that I pay

That is the underlying point. There are some (many) of us who are content with the service our IFAs provide. These constant drip drip attacks on them do not take  that into account

fred246

The whole point I am making is that if YOU understand the investments you can take on more risk, avoid the fees and make much more money. If an IFA is not allowed to have years where they lose money (and my sister is probably in that category) then they have to invest in incredibly cautious investments. In the last few years I will have made many multiples more than she has got from her IFA. The IFA has to manage a customer AND their investments. The middle man is very detrimental.

NeilCr

fred246 said:

The whole point I am making is that if YOU understand the investments you can take on more risk, avoid the fees and make much more money. If an IFA is not allowed to have years where they lose money (and my sister is probably in that category) then they have to invest in incredibly cautious investments. In the last few years I will have made many multiples more than she has got from her IFA. The IFA has to manage a customer AND their investments. The middle man is very detrimental.

But, the middle man isn't detrimental to your sister. S/he is, as you say, providing the service your sister wants and a support service too. Something, I know, I appreciate. 

fred246

I think an IFA can give you small returns for no effort. If that's what you want and accept that you are missing out on potentially much more then you can use an IFA.

AlanP_2

fred246 said:

I think an IFA can give you small returns for no effort. If that's what you want and accept that you are missing out on potentially much more then you can use an IFA.

A work colleague of my wife's left the forces about 18 years ago with a healthy lump sum and small pension. His current job pays a good salary and so he decided to invest the lump sum.

He has used an IFA from Day 1 and is very happy with a ~15% annual return over that period, that's after paying the IFA 1% annual fee.
 
Not all the recommendations were for investments under the IFAs control. For example they included helping him to get in to BTL, and 18 years ago that was nowhere near as popular or mainstream as it is now. He now has 3 properties, a large portfolio and looking forwards to a great, well funded retirement. He admits himself left to his own devices it would have been in a cash savings account for 18 years as he din't have a clue and no interest in learning. OK, so with the amount of information at your fingertips on the Web nowadays someone in a similar situation could use MSE etc. to find out options, get feedback on ideas etc. but they have still got to be "brave enough" to press that BUY button based on their own research and self-confidence, and to many that is psychologically not going to happen

Not all IFAs are bad in every situation.

jacksmith93

I’m an IFA and we charge a fee based on expected hours per year at a rate of £120 i.e. 5 hours a year £600 or 10 hours £1200 etc. But we charge it as a retainer fee so a client taking 10 hours would pay £100 per month. We do exist but we are very rare! I’ve worked at several companies and this is unusual in the industry typical it is a flat percentage but that doesn’t have any baring to the work involved. Re the new company it is likely your adviser has sold the business to the firm (I’m guessing this is standard practice these days) and he will be incentivised for you to move. I.e. if you pay £1000 per year to him you’d have been bought as a client for a multiple of this typical 3 times. If you move over to the new firm he keeps the payment if you don’t he wont get anything. It would be interesting to know the name of the new firm I expect it is a ‘consolidator’ which generally means !!!!!! service and management for a hefty cost.