IFA through vouched for -free consultation boundaries?

bargainhunter888

In light of the current situation, i was looking on the forum / website and sent a request to vouchedfor to get a free consultation from an IFA
an appointment has been arranged seemingly with a director at a local wealth company, i know there is a no obligation to follow through, but i thought it would be good to get an opinion on my finances and direction, is there a line that is drawn with these free consultations mainly:
how much advice will i receive?
where is the line in terms of advice? i.e if i started with a question of what do you think i should do in regards to pension / mortgage repayment / funds & markets to invest in / future investment options etc.
or will it mainly be about the services they can offer/charges/and a very top level analysis of my financial situation
Thanks 

bowlhead99

Professional advice is regulated, and comes with consumer protection - so you don't get any advice unless you enter into an agreement, and pay for it.

The initial consultation is to find out some basics about your circumstances and give you an understanding of what solutions might be employed-  what sort of things could they do for you and what might it cost, and do you feel that's the sort of thing you want, and are they the sort of person you could work with, and are you the sort of customer they would want.

bargainhunter888

Pretty much a sales speech which I probably won’t gain much insight other than what services they offer then 

Malthusian

What were you expecting to get an insight into?

No advice would be given in an initial consultation. When a builder comes round to my house to give me a quote for a loft extension, he isn't going to get a hammer out and start building it for free, even if I think he should.

dunstonh

i was looking on the forum / website and sent a request to vouchedfor to get a free consultation from an IFA

Every IFA has a free initial consultation.   

an appointment has been arranged seemingly with a director at a local wealth company

"wealth company" is a term that is often associated with FAs rather than IFAs.   So, make sure its an IFA.

 but i thought it would be good to get an opinion on my finances and direction, is there a line that is drawn with these free consultations mainly:
how much advice will i receive?

Usually you get no advice.  Time would not make that possible.   However, there are occasions where, pointers may be given.  The first meeting is not about giving advice.  Its about seeing whether there is a benefit (to both you and the adviser) of providing you services.

where is the line in terms of advice? i.e if i started with a question of what do you think i should do in regards to pension / mortgage repayment / funds & markets to invest in / future investment options etc.

You wouldnt get an advice answer to that on a first meeting.   Its not possible to answer without knowing more about you.   So, you would expect a generic, wishy washy response that doesn't commit the adviser to anything.

or will it mainly be about the services they can offer/charges/and a very top level analysis of my financial situation

That is basically it. 

Pretty much a sales speech which I probably won’t gain much insight other than what services they offer then   

IFAs have pretty much moved away from sales.  FAs, some wealth companies are still prone to it and a few dinosaurs but you generally find with IFAs that its not about sales.   In effect, what an IFA sells is their advice.  That is what you are paying for.   So, you are not going to get it dished out for free.

bargainhunter888

https://www.vouchedfor.co.uk/financial-advisor-ifa/manchester/027341-richard-clayton

looks like a director of a company, but also an IFA? 

dunstonh

I cannot remember if its vouchedfor or the other fairly large marketing tool.  However, one of them wanted to take a large share of fee income earned through clients introduced via it.   So, what you often see is that leads through that site tended to have higher fee rates than typical.  
Indeed, vouchedfor have a fees tool on their website for advisers considering their service ( https://accounts.vouchedfor.co.uk/fees ) and I just input our fees into it and got the result that showed all the advisers on vouchedfor were more expensive.

So, this makes me think that if it was vouchedfor that had the high cost for advisers and advisers getting clients via that method are charging more because of the extra it costs to use it.

bargainhunter888

Just an update, had a quick free consultation this morning, we went through my current financial situation.
basically they need to have a minimum £100k investment and that i would need to transfer my ISAS / Pensions over
2% set up, +1.4% ongoing charges to manage / platform which they would use Aviva to manage the funds in which they tend to be passive choices.
they cannot give me much advise on my whole situation with CGT/Tax/Mortgages/Banking products - which i guess i was naive about, but they can prompt me to look out for things with those products.
So i do wonder whether there is much gained vs me investing it all into say a low cost tracker and saving about 0.8% and have to commit to less?

dunstonh

they cannot give me much advise on my whole situation with CGT/Tax/Mortgages/Banking products - which i guess i was naive about, but they can prompt me to look out for things with those products.

IFAs can advise on the CGT position of your investments and the taxation of your investments.   However, they are not accountants and cannot drift into more complex scenarios where an accountant would be the appropriate professional.

As for mortgages, most IFAs (individuals) no longer transact in mortgages.  However, most IFA firms (that are not sole traders) will employ mortgage advisers to handle the mortgage side.

Banking products are not an area within an IFA remit. If someone asked about savings, they would just look on the web at the tables you can see yourself.

o i do wonder whether there is much gained vs me investing it all into say a low cost tracker and saving about 0.8% and have to commit to less?

Who is to say that the "low cost tracker" is going to give you a better return?  (IFA portfolios frequently do better than trackers.  No guarantee they will but frequently do).   If you are charges focused, then you go with the cheapest option even if it may mean lower returns.  If you are returns focused then charges are a secondary concern.

blue_max_3

bargainhunter888 said:

Just an update, had a quick free consultation this morning, we went through my current financial situation.
basically they need to have a minimum £100k investment and that i would need to transfer my ISAS / Pensions over
2% set up, +1.4% ongoing charges to manage / platform which they would use Aviva to manage the funds in which they tend to be passive choices.
they cannot give me much advise on my whole situation with CGT/Tax/Mortgages/Banking products - which i guess i was naive about, but they can prompt me to look out for things with those products.
So i do wonder whether there is much gained vs me investing it all into say a low cost tracker and saving about 0.8% and have to commit to less?

That was my experience too. I realised they were just going to do for me what I could do just as well myself. I just needed the confidence. I actually started a pension (end of tax year rush) and realised I could just keep it as cash, which was a revelation. Saves all that stress! And possibly a good decision at this point.

dunstonh

I actually started a pension (end of tax year rush) and realised I could just keep it as cash, which was a revelation. Saves all that stress! And possibly a good decision at this point.

Also possibly a bad decision at this point.   Markets have been rising since around the 19th March.  So, you could have lost upto around 15% in gains.       Cash can actually increase the risks rather than reduce them when you consider all risks (e..g shortfall risk, inflation risk etc).    What is best will depend on your objectives.  If you want that contribution out of the pension in the short term then its probably a good move.  If you want it out in the long term then it's likely a bad move.