choosing a new IFA
Comments
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if the SL SIPP is over £85k in value, is it at risk because of that limit?
would it be better to split it up?The £85K compensation limit is important for bank deposits as there is a real risk of a bank going bust .
The chance of a mainstream pension company going bust is almost zero, so I would not worry about it. Many contributors on this forum have several hundred thousand pounds with one provider
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Other half insists on IFA, loses money. For my Sipp I numbered a range of well known funds 1-20, threw darts at a board (I really did) and chose ten. Up 25%.Next year could be other way round but at the moment Im happy. My view has always been that if IFA's were really that good at second guessing the market why on earth wouldn't they just invest their money instead of traipsing around on cold January nights to client's houses. They are ok for certain functions and processes but for straightforward SIPP investments I have never seen the point.1
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My view has always been that if IFA's were really that good at second guessing the market why on earth wouldn't they just invest their money instead of traipsing around on cold January nights to client's houses.
IFAs are not there to second guess the market. They are there to ensure suitability and structure.
Whilst new advisers may traipse around on cold January nights, you generally find the experienced and established advisers do not do that. However, if they do, they will do it for good reason. Its called income. You earn more from working than you do investing.
They are ok for certain functions and processes but for straightforward SIPP investments I have never seen the point.It all depends on how you structure your investments. Throwing darts at a board and picking ten would likely see you underperform both an IFA and a decent multi-asset fund.
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.0 -
balbs said:Other half insists on IFA, loses money. For my Sipp I numbered a range of well known funds 1-20, threw darts at a board (I really did) and chose ten. Up 25%.Next year could be other way round but at the moment Im happy. My view has always been that if IFA's were really that good at second guessing the market why on earth wouldn't they just invest their money instead of traipsing around on cold January nights to client's houses. They are ok for certain functions and processes but for straightforward SIPP investments I have never seen the point.1
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balbs said:Other half insists on IFA, loses money. For my Sipp I numbered a range of well known funds 1-20, threw darts at a board (I really did) and chose ten. Up 25%.Next year could be other way round but at the moment Im happy. My view has always been that if IFA's were really that good at second guessing the market why on earth wouldn't they just invest their money instead of traipsing around on cold January nights to client's houses. They are ok for certain functions and processes but for straightforward SIPP investments I have never seen the point.
It was one of the best decision of my life, I only wish I had done it earlier. I have now saved myself thousands in fees and my (amateur) selection is doing significantly better than the old funds I had been in (it even did much better than my old funds during the coronavirus blip this year ... apart from Castlefield Buffetology and LT UK, but I still have hopes they will soar like eagles once more)Past caring about first world problems.1 -
IvanOpinion said:balbs said:Other half insists on IFA, loses money. For my Sipp I numbered a range of well known funds 1-20, threw darts at a board (I really did) and chose ten. Up 25%.Next year could be other way round but at the moment Im happy. My view has always been that if IFA's were really that good at second guessing the market why on earth wouldn't they just invest their money instead of traipsing around on cold January nights to client's houses. They are ok for certain functions and processes but for straightforward SIPP investments I have never seen the point.
It was one of the best decision of my life, I only wish I had done it earlier. I have now saved myself thousands in fees and my (amateur) selection is doing significantly better than the old funds I had been in (it even did much better than my old funds during the coronavirus blip this year ... apart from Castlefield Buffetology and LT UK, but I still have hopes they will soar like eagles once more)2 -
BritishInvestor said:This belief that IFAs exist to sell funds is surely a decade out of date?
When I started investing I was told/advised that I needed an IFA. I picked the same company my parents used (reasonably large with many IFAs) got assigned to a lovely person and chatted to them for an hour or so ... they then picked me some funds. For several years after that I was called in for a cup of tea and some custard creams for a half hour chat to tell me my investments were fine and no action was needed. They also gave me a fancy little booklet with one of those plastic finger spines showing how my investment was doing. I was very naive then but I now know that was basically a print out from the morning star x-ray tool (or similar) with a two page templated letter at the front (fully prepared and typed up by the IFAs secretary) - the IFA and I got to enjoy its wonderous beauty for the first time together. I felt the £1000+/year was a bit excessive but believed I had no choice.
Then the cups of tea and custard creams stopped and no more fancy print-outs. I was distraught for I knew not what I had done to deserve this snub ... in reality it was my own fault, I took my eye off the ball and before I knew it, it had been 4 years since I had talked to my IFA. However her company still took over £1000+/year for all the advice (those must have been some expensive custard creams).
During a chance conversation with Fidelity (issues on my account) it was explained that I could pick a new IFA or, in fact, I did not need an IFA ... all I had to do was fill in a couple of forms - an absolute revelation to me. I strategised for a while and then I sent a courtesy letter to the IFA company and took over the funds myself. I didn't quite save all of the £1000+/year because the cost to Fidelity went up a little bit (and I had to buy my own teabag and biscuits). Coincidentally, at about the same time the IFA company got in touch, they had assigned me a new IFA (the old one had left) and the fancy pamphlet arrived in the post (it was not accompanied by a custard cream or even a tea bag but did have a lovely blue plastic spine thingy). I rejected their request to come in for a conversation - because I preferred the biscuits I had bought myself (chocolate covered oaties)
So, if all you want to do is pick a few funds then an IFA is an unnecessary expense. If you are concerned just pick a good quality mixed asset fund until you gain enough knowledge and confidence - some people may still however feel more comfortable using an IFA. I am currently trying to find an IFA to discuss retirement options but every single one so far has wanted to take control of my SIPP and keeps talking about percentages ... no matter how many times I tell them I will manage it myself .... I just want to pay a flat fee for a couple of hours of discussion to talk through drawdown and tax implications - sadly no takers, so I guess it is back to doing my own research (I am also thinking of upgrading to kit kats).
Past caring about first world problems.3 -
PS: And I know you will find this hilarious, one of the IFAs I contacted seemed to want to charge me a 5% transfer charge and a mere 2.5% per year for management fees. After thinking hard about it for at least 1 nanosecond I turned down his offer.Past caring about first world problems.1
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IvanOpinion said:BritishInvestor said:This belief that IFAs exist to sell funds is surely a decade out of date?
When I started investing I was told/advised that I needed an IFA. I picked the same company my parents used (reasonably large with many IFAs) got assigned to a lovely person and chatted to them for an hour or so ... they then picked me some funds. For several years after that I was called in for a cup of tea and some custard creams for a half hour chat to tell me my investments were fine and no action was needed. They also gave me a fancy little booklet with one of those plastic finger spines showing how my investment was doing. I was very naive then but I now know that was basically a print out from the morning star x-ray tool (or similar) with a two page templated letter at the front (fully prepared and typed up by the IFAs secretary) - the IFA and I got to enjoy its wonderous beauty for the first time together. I felt the £1000+/year was a bit excessive but believed I had no choice.
Then the cups of tea and custard creams stopped and no more fancy print-outs. I was distraught for I knew not what I had done to deserve this snub ... in reality it was my own fault, I took my eye off the ball and before I knew it, it had been 4 years since I had talked to my IFA. However her company still took over £1000+/year for all the advice (those must have been some expensive custard creams).
During a chance conversation with Fidelity (issues on my account) it was explained that I could pick a new IFA or, in fact, I did not need an IFA ... all I had to do was fill in a couple of forms - an absolute revelation to me. I strategised for a while and then I sent a courtesy letter to the IFA company and took over the funds myself. I didn't quite save all of the £1000+/year because the cost to Fidelity went up a little bit (and I had to buy my own teabag and biscuits). Coincidentally, at about the same time the IFA company got in touch, they had assigned me a new IFA (the old one had left) and the fancy pamphlet arrived in the post (it was not accompanied by a custard cream or even a tea bag but did have a lovely blue plastic spine thingy). I rejected their request to come in for a conversation - because I preferred the biscuits I had bought myself (chocolate covered oaties)
So, if all you want to do is pick a few funds then an IFA is an unnecessary expense. If you are concerned just pick a good quality mixed asset fund until you gain enough knowledge and confidence - some people may still however feel more comfortable using an IFA. I am currently trying to find an IFA to discuss retirement options but every single one so far has wanted to take control of my SIPP and keeps talking about percentages ... no matter how many times I tell them I will manage it myself .... I just want to pay a flat fee for a couple of hours of discussion to talk through drawdown and tax implications - sadly no takers, so I guess it is back to doing my own research (I am also thinking of upgrading to kit kats).
Out of interest what is it that you feel you need a hand with re drawdown and tax implications?1
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