Pensions. Is an IFA really worth it?

Thrugelmir

ZingPowZing said:

.....Yes.....
So, for me, the boiler analogy doesn't really stand up. Because the financial services industry "fitter" offers no warranty and takes no responsibility for his workmanship, more to the contrary:- if the boiler should break down or explode, it would be the fault of the customer whose specifications were followed. 

Take any industry there's always cowboys or fraudulent individuals.  Onus is on the individual to perform due diligence and take time before employing anyone. 

Pension Bee is certainly targeting a forgotten part of the market. Grown from nothing very quickly. Great ethics as an organisation as well. 

Albermarle

ZingPowZing said:

.....Yes.....
So, for me, the boiler analogy doesn't really stand up. Because the financial services industry "fitter" offers no warranty and takes no responsibility for his workmanship, more to the contrary:- if the boiler should break down or explode, it would be the fault of the customer whose specifications were followed. 

Have you ever watched that tv programme - Rogue trader? If you had a boiler fitted by some of these people and it went wrong, you would never see them again. 
The risk of being done over by dodgy 'professionals' in many spheres is a fact of life, and you just have to be on the lookout for them.

[Deleted User]

Albermarle said:

ZingPowZing said:

.....Yes.....
So, for me, the boiler analogy doesn't really stand up. Because the financial services industry "fitter" offers no warranty and takes no responsibility for his workmanship, more to the contrary:- if the boiler should break down or explode, it would be the fault of the customer whose specifications were followed. 

Have you ever watched that tv programme - Rogue trader? If you had a boiler fitted by some of these people and it went wrong, you would never see them again. 
The risk of being done over by dodgy 'professionals' in many spheres is a fact of life, and you just have to be on the lookout for them.

That's not the difference. The difference is, in the event of a boiler breaking down or a managed investment losing money, a boiler fitter has obligations to make good to his customer, a financial adviser doesn't.

dunstonh

ZingPowZing said:

Albermarle said:

ZingPowZing said:

.....Yes.....
So, for me, the boiler analogy doesn't really stand up. Because the financial services industry "fitter" offers no warranty and takes no responsibility for his workmanship, more to the contrary:- if the boiler should break down or explode, it would be the fault of the customer whose specifications were followed. 

Have you ever watched that tv programme - Rogue trader? If you had a boiler fitted by some of these people and it went wrong, you would never see them again. 
The risk of being done over by dodgy 'professionals' in many spheres is a fact of life, and you just have to be on the lookout for them.

That's not the difference. The difference is, in the event of a boiler breaking down or a managed investment losing money, a boiler fitter has obligations to make good to his customer, a financial adviser doesn't.

You are wrong.    Advice gets consumer protection and redress would be paid on unsuitable advice.  

semiplural

Prism said:

Why do you want funds of high, med and low risk? Just pick a single fund at the risk level you want.

I would definitely not recommend a single fund their apparent risk level and their performance is in the past, which as the saying goes is no guarantee for the future. 

I am sure that most people are aware of the name Neil Woodford, but a lesser known fact is that Warren Buffet (the sage of Omaha) has underperformed the market for quite a few years now.

 

BritishInvestor

semiplural said:

Prism said:

Why do you want funds of high, med and low risk? Just pick a single fund at the risk level you want.

I would definitely not recommend a single fund their apparent risk level and their performance is in the past, which as the saying goes is no guarantee for the future. 

I am sure that most people are aware of the name Neil Woodford, but a lesser known fact is that Warren Buffet (the sage of Omaha) has underperformed the market for quite a few years now.

 

I'm assuming he is talking about a passive, multi-asset fund rather than an active fund.

Prism

BritishInvestor said:

semiplural said:

Prism said:

Why do you want funds of high, med and low risk? Just pick a single fund at the risk level you want.

I would definitely not recommend a single fund their apparent risk level and their performance is in the past, which as the saying goes is no guarantee for the future. 

I am sure that most people are aware of the name Neil Woodford, but a lesser known fact is that Warren Buffet (the sage of Omaha) has underperformed the market for quite a few years now.

 

I'm assuming he is talking about a passive, multi-asset fund rather than an active fund.

I was, should have made that a bit clearer.

mark13

I agree witb others who say research and then DIY. You could get the IFA to help out on  pay as you go basis. 

IvanOpinion

t8769 said:

I have a simple savings requirement, not a huge amount of money to invest.
Just need a pension, and to invest other finds in a mix of high, med and low risk.
Could I do this myself  or is it worth paying an IFA?
Would they get higher returns to make their fees worthwhile?
Nothing complicated about my requriements.

Thanks

The honest and simple answer is ... yes you can do this yourself.  Very easily.
If you don't have a lot of confidence then you could simply go with something like Vanguard lifestrategy (20, 40, 60, 80., 100 depending on your attitude to risk, your age etc.) or the HSBC Global strategy equivalents.  You say it isn't a huge amount so you could set up a SIPP on the Vanguard web site - that should keep costs low.  Others have mentioned other alternatives.

As far as risk is concerned go to various sites and go through their risk calculators and see how you fair.  They ask pretty much the same questions an IFA would so you will get the same answer.  You just need to interpret it correctly (I am sure some on this board would help).

Finally, you ask, will an IFA get higher returns.  The answer is that there is absolutely no guarantee of that.  If you pick a multi-asset or balanced fund that suits your risk assessment you should be able to sleep fine at night, knowing that the fund managers are doing the work - you do not need to pay the costs of an intervening salesman.

I am not dissing IFAs, they offer many services that those that require complex and detailed advice will benefit from.  But to make the analogies used earlier a bit more realistic

Can you change the timeclock on your boiler or would you pay an electrician?

Can you reconcile your credit card statement or would you pay an accountant?

Can you set up a few plant pots or would you pay a builder?

In all the above cases there is nothing wrong with paying someone to do it, but you don't have to and there is no guarantee that they will do a better job.

Albermarle

If you don't have a lot of confidence then you could simply go with something like Vanguard lifestrategy (20, 40, 60, 80., 100 depending on your attitude to risk, your age etc.) or the HSBC Global strategy equivalents

It is not just about confidence . Having multi asset funds is easier and they are available on many platforms , including the simpler ones like Pension Bee and also with the traditional personal pension providers. You pay a bit extra for someone else to do the work of course but compared to historical charging levels they are still pretty cheap.