To use an IFA or not?

Albermarle

Therefore those that are around can afford to cherry pick clients - guess what, if I were in that position, I'd pick clients with greater wealth and less concern over my fees!

Or pick clients who were easy to deal with and not giving you grief.

Like it or loathe it, I suspect forums like this and others are de facto the 'half-way house' you mention.   

Yes you are probably right and sites like Monevator I suppose.

BritishInvestor

LHW99 said:

Chasing up and delays cost money.   The longer the case takes, the more times you need to re-read the file to remind yourself of what you are doing.   You say "unless the IFA..."  but that is the point of hourly rate. You pay for every minute of work.  Plus, if you are like most that charge hourly rates, you do it in minimum time blocks of 15 minutes.

While I understand that, and if it is agreed that the client is happy for the IFA to manage their funds on an ongoing basis then a % charge is logical, it does rather mitigate against those that want to get a check on their overall position but carry on handling things themselves.

Solicitors will charge by the hour, and although most regular transactions can have estimated costs, even then things arise that make the final charge change.

Perhaps more advisors do have hourly charging available, but don't advertise it because of the dificulty in estimating costs and because they think it won't be of much interest? This then becomes a circular argument.

I wonder whether it would be possible to have some kind of half-way house between the very generic guidance offered by the pensions advisory service, and the full IFA work? Difficult to define the scope I suppose, which would make the insurance question difficult.

It should be possible to find an IFA that will undertake a one-off planning exercise which may be what some people are looking for (but obviously this is not advice).

Albermarle

BritishInvestor said:

LHW99 said:

Chasing up and delays cost money.   The longer the case takes, the more times you need to re-read the file to remind yourself of what you are doing.   You say "unless the IFA..."  but that is the point of hourly rate. You pay for every minute of work.  Plus, if you are like most that charge hourly rates, you do it in minimum time blocks of 15 minutes.

While I understand that, and if it is agreed that the client is happy for the IFA to manage their funds on an ongoing basis then a % charge is logical, it does rather mitigate against those that want to get a check on their overall position but carry on handling things themselves.

Solicitors will charge by the hour, and although most regular transactions can have estimated costs, even then things arise that make the final charge change.

Perhaps more advisors do have hourly charging available, but don't advertise it because of the dificulty in estimating costs and because they think it won't be of much interest? This then becomes a circular argument.

I wonder whether it would be possible to have some kind of half-way house between the very generic guidance offered by the pensions advisory service, and the full IFA work? Difficult to define the scope I suppose, which would make the insurance question difficult.

It should be possible to find an IFA that will undertake a one-off planning exercise which may be what some people are looking for (but obviously this is not advice).

Maybe the issue is that your average person would struggle to grasp the difference between advice ( in this context ) and guidance.
As soon as they were given guidance then they would ask 'what do you recommend then? ' 

fred246

My dentist is a REAL professional. 5 year degree. All sorts of extra qualifications. He is private only. He pays for his own premises and staff. He does a full check up for £40. How come an IFA charges so much more for an annual check up?

[Deleted User]

fred246 said:

My dentist is a REAL professional. 5 year degree. All sorts of extra qualifications. He is private only. He pays for his own premises and staff. He does a full check up for £40. How come an IFA charges so much more for an annual check up?

Good question. Cuts through.

coyrls

fred246 said:

My dentist is a REAL professional. 5 year degree. All sorts of extra qualifications. He is private only. He pays for his own premises and staff. He does a full check up for £40. How come an IFA charges so much more for an annual check up?

I imagine it's for the same reason that IFAs offer free initial meetings: because it leads to more business.

Albermarle

ZingPowZing said:

fred246 said:

My dentist is a REAL professional. 5 year degree. All sorts of extra qualifications. He is private only. He pays for his own premises and staff. He does a full check up for £40. How come an IFA charges so much more for an annual check up?

Good question. Cuts through.

Wait until he bills you for a couple of crowns......

LHW99

Albermarle said:

ZingPowZing said:

fred246 said:

My dentist is a REAL professional. 5 year degree. All sorts of extra qualifications. He is private only. He pays for his own premises and staff. He does a full check up for £40. How come an IFA charges so much more for an annual check up?

Good question. Cuts through.

Wait until he bills you for a couple of crowns......

Don't think crowns are still legal tender - sovereigns though ..........

BritishInvestor

ZingPowZing said:

fred246 said:

My dentist is a REAL professional. 5 year degree. All sorts of extra qualifications. He is private only. He pays for his own premises and staff. He does a full check up for £40. How come an IFA charges so much more for an annual check up?

Good question. Cuts through.

Cuts through what?

enthusiasticsaver

Nick9967 said:

Just need some opinions if there are any,
Planning my early/semi retirement at 58, now 53.
Got a pot with SW of about £205k still paying in about £220pm gross.
My pot has grown over 6% this year so not bad in the current climate.
Up until 2 years ago my pot was managed by Aspira, for various reasons it has stayed in the funds they advised but not been managed for the past 2 years.
Which in itself is not an issue to me.
Clearly I'm needing to plan my next few years and am in doubt whether to:

1. Leave alone with no management of IFA  
2. Re-contract Asvira for 0.25% pa and get some management and a once a year chat about what to do!
3. Find a good IFA, clearly pay more but bank on them being able to manage what i have for better growth? risky?

When it comes to 58 my income will come from various points, pot drawdown, cash from my 25%, cash from house downsize (about £100k) part time work , wifes salary.
Then later at mid 60's a couple of other points will kick in , SP me and wife, wife LGPS , second property sale.  
I'm in 3 minds what to do ? do i really need an IFA before 58 (may need something then to minimise tax etc)
any ideas ?

Your story resonates a bit with me.  I am 60 now, husband 61 and he retired at 58 and I retired at 57 so almost 3 years ago now. Our plans for retirement hinged on a well funded pension for my OH (part DC and part frozen DB), 1 deferred GMP for me and  a LGPS plus stocks and shares isas, a SIPP  and a substantial cash savings pot.  We saw an IFA prior to my DH retiring but was not  impressed.  He did not seem to know much more than I and I had been investing in a VGLS60 up until that point so did not consider it worth paying for an IFA.  He made a mistake on calculating my DHs pension (originally made by his employer but never spotted by the IFA) and dismissed me when I queried it.  Then had to admit I was right and a mistake had been made.  I just could not trust him after that and we never heard from him again.  The VLS60 meant  low charges, well diversified multi asset fund and I had been tracking our expenditure and projected income since our early 50s.  I knew we could afford to retire on our pensions and the investments and SIPPs were to cover the extra until state pensions kick in so I was firmly in the DIY camp.  

After I retired and our income streams increased I decided to give a different IFA a chance as our portfolio was bigger and I wanted a different perspective.  Yes, of course he charges more but we get a more rounded financial perspective and on risk profiling my DH he found him to be much more risk averse than me so moved our investments into a cautious to moderate portfolio rather than moderate which is what VLS60 is.  Some may say higher than moderate given the 60% equities. He modelled our income to show what we would need from the portfolio on top of our guaranteed income and gave suggestions re tax etc so not purely looking at return. The objective was to make us feel financially secure. The portfolio has returned around 8%  after charges over the year we have been with him so we are happy with that. I only measure it against VLS60 and it has performed better than that although I know that is like comparing apples and pears. 

I think @short_bread makes a good point in that the value of an IFA is what they can do for you.  Overseeing the investments, dealing with admin, always being on the end of a phone or someone to email with a question or problem.  I enjoy going online and seeing the value of our investments without worrying whether I am doing the right thing and my DH and I can go about our lives without having to think about it.  Same reason we get garages to service our cars, pay a window cleaner to clean our windows and a gas qualified engineer to service our boiler and gas fire. He has more  experience, access to better financial resources and it is in his interests to make our investments perform as well as they can within his remit. It helps though that for us the investments are to pay for additionals (holidays, new cars, home improvements) rather than being needed for us to live off.  You though have other property to sell and are planning to downsize so I would have thought speaking to an IFA might be worth considering. Most do free consultations to start with.  Like anything though, there are good and bad ones out there.