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Vouchedfor?

sixpence.
sixpence. Posts: 295 Forumite
Sixth Anniversary 100 Posts Name Dropper Combo Breaker
edited 23 May 2020 at 12:16PM in Savings & investments
Is Vouchedfor.co.uk a valid source when trying to work out how trustworthy an IFA is? Are they able to edit their own reviews?
Cheers 


EDIT: I apologise, because I don't think my question is clear. What I wanted to know is: Are the reviews on vouchedfor trustworthy? Are they to be believed? If an IFA has 4/5 stars or 5/5 stars can one safely assume that they are decent? 
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Comments

  • dunstonh
    dunstonh Posts: 118,555 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Is Vouchedfor.co.uk a valid source when trying to work out how trustworthy an IFA is?

    No.  It does not give any indication either way.  

    Most IFAs I know do not use vouchedfor.    When they approached our firm some years back, their charges were eyewatering high.   We would have had to significantly increase our charges to clients that came via them.        I only know one director of an IFA firm that uses them but he sets up young new recruits just starting out and they need to advertise.  The rest don't use it (or any of the paid for listing services) as they are don't need to.   I just did a search on vouchedfor in our area and none of the local firms were present.  The closest 5 listed were from firms I recognise and are of the type I would expect to see there given their business model.  



    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • dunstonh said:
    Is Vouchedfor.co.uk a valid source when trying to work out how trustworthy an IFA is?

    No.  It does not give any indication either way.  

    Most IFAs I know do not use vouchedfor.    When they approached our firm some years back, their charges were eyewatering high.   We would have had to significantly increase our charges to clients that came via them.        I only know one director of an IFA firm that uses them but he sets up young new recruits just starting out and they need to advertise.  The rest don't use it (or any of the paid for listing services) as they are don't need to.   I just did a search on vouchedfor in our area and none of the local firms were present.  The closest 5 listed were from firms I recognise and are of the type I would expect to see there given their business model.  



    I had matched with a IFA from and they didnt tell me anything i didnt know through researching, min investment was £100k, he was a director of a wealth company
    is there any IFA's that now offer hourly services rather than fully managed portfolio.
  • dunstonh
    dunstonh Posts: 118,555 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    he was a director of a wealth company

    A general rule of thumb is to filter out companies that tag themselves as wealth companies.  Like all generalisations, there are exceptions, but its a good guide as "wealth management" tends to mean they use DFM portfolios rather than advisory portfolios or they are on their way to dropping IFA status to be FA.

    is there any IFA's that now offer hourly services rather than fully managed portfolio.

    Those are two unlinked things.

    The method of remuneration, i.e. percentage, fixed fee, hourly etc, has no link to whether a managed portfolio is offered or not.

    Hourly rate is available with some but consumer research has found that it is the least popular option.

    However, ALL IFAs have to offer transactional advice as an option and cannot insist on ongoing advice.  However, the advice will usually be different if ongoing servicing is not selected.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • sixpence.
    sixpence. Posts: 295 Forumite
    Sixth Anniversary 100 Posts Name Dropper Combo Breaker
    edited 23 May 2020 at 12:16PM
    I apologise, because I don't think my question is clear. What I wanted to know is: Are the reviews on vouchedfor trustworthy? Are they to be believed? If an IFA has 4/5 stars or 5/5 stars can one safely assume that they are decent? 

    @dunstonh could you kindly explain the difference between DFM portfolios and advisory portfolios? I feel like I know this but cant remember off the top of my head and I'm not sure what DFM stands for. 
  • masonic
    masonic Posts: 25,521 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    edited 23 May 2020 at 12:38PM
    sixpence. said:
    I apologise, because I don't think my question is clear. What I wanted to know is: Are the reviews on vouchedfor trustworthy? Are they to be believed? If an IFA has 4/5 stars or 5/5 stars can one safely assume that they are decent?
    You should never trust the review of anyone you do not know personally. Several of the financial scams highlighted on this forum in recent times were associated with companies with a high feedback rating, not that I'm saying anyone on that anyone appearing site is a scammer. It is easy for people to bribe others into leaving positive feedback, and customers seeking financial advice are not best placed to judge if the advice they received was good, especially if they are reviewing soon after using the adviser. Your best bet is a personal recommendation from someone you trust, and who has a long term relationship with an adviser.
  • dunstonh
    dunstonh Posts: 118,555 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Are the reviews on vouchedfor trustworthy? Are they to be believed?

    Any reviewing system can be manipulated.   However, people making reviews tend to do it right after the initial purchase.   Maybe after they have seen the adviser 2-3 times and made a decision.  Not when they have been with that adviser for 20-30 years.  So, a a limitation of the review is that its only after several hours work and not after years of work.

    If an IFA has 4/5 stars or 5/5 stars can one safely assume that they are decent?
    Most of the IFAs I would class as "decent" don't use any reviewing system as they dont need to pay to get business via leads.    That isnt to say that the advisers on various paid for websites are not decent.  It just means they either don't get enough business coming in naturally and need to pay to advertise or they are trying to accelerate growth in the business above the norm. 

    Some people feel pressured into leaving a good review.  And bad reviews can be removed.   I rarely rely on reviews for any services due to manipulation and the fact the review is made too quickly at the start.

    To be honest, quality is not normally an issue. The FCA did a sample review of advice a couple of years ago and it showed a high standard.  It did another review into DB pension transfers and found many faults there.  However, they focused on the factory line companies rather than the local companies with that one and history tells us that when there are problems it is often the factory line companies that are behind it (i.e. doing transactions on a bulk quantity using unqualified staff to do the work, using templated advice and just getting an adviser to sign the end result). 

    The main area of concern is cost.  There are some good value firms but there are some firms that are disgracefully high in cost.   Time and again on this site you see people posting about the cost not the quality.

    @dunstonh could you kindly explain the difference between DFM portfolios and advisory portfolios? I feel like I know this but cant remember off the top of my head and I'm not sure what DFM stands for. 
    An IFA providing advisory portfolios cannot make changes without telling what they want to do first and you agreeing to it.   With advisory portfolios, there is no additional cost as the adviser is making the investment selection and allocation decisions (typically by paying for that data analysis and due diligence themselves).  Discretionary (DFMs) sees the adviser pass the research and due diligence to the DFM and pass the costs of that on to you.  It makes the adviser's job easier as they literally have to do nothing with the investments after set up.   Firms that use the tag "wealth management" tend to use DFMs.  Some may question the value of an adviser that passes the investment work to a third party and gets you to pay for that whilst you are still paying for the adviser.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Albermarle
    Albermarle Posts: 25,939 Forumite
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    Some may question the value of an adviser that passes the investment work to a third party and gets you to pay for that whilst you are still paying for the adviser.

    Is this case the IFA should reduce their fees, but it seems for other posts this is not always the case .

    In any case even with reduced IFA  fees the extra charge for the DFM , has got to make it a more expensive option.

    I presume the argument is that the DFM is a more specialised investment expert , so will bring better results, maybe....

  • dunstonh
    dunstonh Posts: 118,555 Forumite
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    I presume the argument is that the DFM is a more specialised investment expert , so will bring better results, maybe....

    It is not an argument I buy.    The exception being in ethical/sustainable portfolios.   Some DFMs have paid good attention to that market.   Someone with particular ethical/SRI requirements may find them useful. 

    A DFM is effectively a fund manager.   But most use funds.  So, it is effectively a fund of funds.  Cost of a managed FoF and a DFM portfolio is broadly similar.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • sixpence.
    sixpence. Posts: 295 Forumite
    Sixth Anniversary 100 Posts Name Dropper Combo Breaker
    @masonic The problem I am facing is that I don't know anyone who can offer a personal recommendation. I have literally asked everyone within my circle and beyond. So searching online seems the thing.

    @dunstonh Am I to understand that your main caution towards wealth management companies is that they are 1) on their way to becoming less independent (potentially FAs) and 2) use a third party to manage investments, so they therefore cost more, and this may not be the most effective way of doing things?
  • dunstonh
    dunstonh Posts: 118,555 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    @dunstonh Am I to understand that your main caution towards wealth management companies is that they are 1) on their way to becoming less independent (potentially FAs) and 2) use a third party to manage investments, so they therefore cost more, and this may not be the most effective way of doing things?

    Any generalisation will have exceptions and there is no direct link.  It is just one of those things that you often see.

    i.e. firms that only use one platform and the same DFM for all their clients would have a hard problem proving their IFA status.  Many that have done this have dropped their IFA status to become FA. Either by choice or they have been told to.    Any restriction of provider or investment is enough for you not to be allowed to use the IFA status.     So, if an IFA firm has 100% on one platform and uses the same DFM for everyone, then they are not really IFAs as they are using a single solution for everyone.     Again, a generalisation warning but many firms that do this also use the wealth management title or have it in their tagline (not to be confused with wealth management as a search engine filter).  i.e. company name wealth management ltd.  Or company name ltd - wealth management consultants or variations like that.    

    Firms that are positioned where the bulk or all of their business on one platform using one DFM tend to get higher values when a consolidator company buys them out.   There is a perceived trend for positioning firms in advance of being put up for sale.

    DFMs cost more and most add absolutely no value to the consumer.   it saves the adviser time but gets the consumer to pay for it.

    And I will state again that these are generalisations and exceptions will apply and that they are my opinion and perception.

    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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