Pensions. Is an IFA really worth it?

BritishInvestor

Joey_Soap said:

BritishInvestor said:

Joey_Soap said:

The answer the OP seeks is "no". ZPZ is on the money here. And a solution from Vanguard or one of the robo-advisors is likely to be at least as good as an IFA will manage. Meantime, read as much as you can about building and maintaining a portfolio yourself. Then decide whether a robo/Vanguard style of portfolio is what you want. You can then decide for yourself whether managing your own money is for you. Or even if you want to use an IFA after all. My own opinion is that using an advisor should really be a last resort. But if you actively choose to do so from an informed point of view, then fine. HTH.

You'd have to provide evidence on the robo-adviser performance as most I've seen have very average outcomes (upon cursory inspection). 
A number of advisers I know used Vanguard in one form or another as part of the portfolio building blocks - investment management is commoditised so they don't tend to put it front and centre of their offering.

BritishInvestor said:

Joey_Soap said:

The answer the OP seeks is "no". ZPZ is on the money here. And a solution from Vanguard or one of the robo-advisors is likely to be at least as good as an IFA will manage. Meantime, read as much as you can about building and maintaining a portfolio yourself. Then decide whether a robo/Vanguard style of portfolio is what you want. You can then decide for yourself whether managing your own money is for you. Or even if you want to use an IFA after all. My own opinion is that using an advisor should really be a last resort. But if you actively choose to do so from an informed point of view, then fine. HTH.

You'd have to provide evidence on the robo-adviser performance as most I've seen have very average outcomes (upon cursory inspection). 
A number of advisers I know used Vanguard in one form or another as part of the portfolio building blocks - investment management is commoditised so they don't tend to put it front and centre of their offering.

I suspect it's because the robo-advisor industry is rather immature. I have never met anyone yet who has used the services of an FA/IFA and doesn't feel ripped off. There must be someone though, I admit. Between a robo-adviser and a Vanguard solution, I would choose the latter. But I do advocate self education very strongly since only then can any individual truly make the best decision. My own feeling is that the more self education one gets, the less likely anyone will choose an advisor of any description. But if they do, fine. Though I absolutely never would.

Re roboadvisers - given that investment management is commoditised I'm assuming they have to be seen to be doing something different from just "buying the market" to justify their fees and this trying to be clever hasn't ended well, as tends to be the way. 

 I'd hope a good adviser would be all about providing an education. The good ones I know have an abundance mentality where they give an enormous amount of information away for free not - not everyone is going to become a client and nor do they need to in order to run a successful business.

Would be good to know more about how people feel ripped off. Were the fees not clearly stated upfront or was it the level of fees?

Albermarle

BritishInvestor said:

Joey_Soap said:

BritishInvestor said:

Joey_Soap said:

The answer the OP seeks is "no". ZPZ is on the money here. And a solution from Vanguard or one of the robo-advisors is likely to be at least as good as an IFA will manage. Meantime, read as much as you can about building and maintaining a portfolio yourself. Then decide whether a robo/Vanguard style of portfolio is what you want. You can then decide for yourself whether managing your own money is for you. Or even if you want to use an IFA after all. My own opinion is that using an advisor should really be a last resort. But if you actively choose to do so from an informed point of view, then fine. HTH.

You'd have to provide evidence on the robo-adviser performance as most I've seen have very average outcomes (upon cursory inspection). 
A number of advisers I know used Vanguard in one form or another as part of the portfolio building blocks - investment management is commoditised so they don't tend to put it front and centre of their offering.

BritishInvestor said:

Joey_Soap said:

The answer the OP seeks is "no". ZPZ is on the money here. And a solution from Vanguard or one of the robo-advisors is likely to be at least as good as an IFA will manage. Meantime, read as much as you can about building and maintaining a portfolio yourself. Then decide whether a robo/Vanguard style of portfolio is what you want. You can then decide for yourself whether managing your own money is for you. Or even if you want to use an IFA after all. My own opinion is that using an advisor should really be a last resort. But if you actively choose to do so from an informed point of view, then fine. HTH.

You'd have to provide evidence on the robo-adviser performance as most I've seen have very average outcomes (upon cursory inspection). 
A number of advisers I know used Vanguard in one form or another as part of the portfolio building blocks - investment management is commoditised so they don't tend to put it front and centre of their offering.

I suspect it's because the robo-advisor industry is rather immature. I have never met anyone yet who has used the services of an FA/IFA and doesn't feel ripped off. There must be someone though, I admit. Between a robo-adviser and a Vanguard solution, I would choose the latter. But I do advocate self education very strongly since only then can any individual truly make the best decision. My own feeling is that the more self education one gets, the less likely anyone will choose an advisor of any description. But if they do, fine. Though I absolutely never would.

Re roboadvisers - given that investment management is commoditised I'm assuming they have to be seen to be doing something different from just "buying the market" to justify their fees and this trying to be clever hasn't ended well, as tends to be the way. 

 I'd hope a good adviser would be all about providing an education. The good ones I know have an abundance mentality where they give an enormous amount of information away for free not - not everyone is going to become a client and nor do they need to in order to run a successful business.

Would be good to know more about how people feel ripped off. Were the fees not clearly stated upfront or was it the level of fees?

I think some people have the idea that everybody is trying to rip them off, whether they are or not. 

IvanOpinion

Linton said:

IvanOpinion said:

BritishInvestor said:

IvanOpinion said:

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.

"They ask pretty much the same questions an IFA would so you will get the same answer."
A discussion around risk, is, or should be, far more than just a questionnaire
"you do not need to pay the costs of an intervening salesman."
I'd hope a typical adviser does a tad more than "sell funds"

Assuming I am responding based on the context of the OP then my answers would be....

And yet in any dealings I have had with all IFAs the questions were pretty much the same as online questionnaires

and

In the same way as a used car salesman does a tad more than 'sell cars'.

A used car salesman gets a commission from selling cars, an IFA does not get a commission from selling funds. So hardly a relevent comparison.

How dare you, a used car sales man gets paid an amount for offering you advice on what car to buy and ensuring it is the right one for you.  The only difference is that they don't ask you for an ongoing percentage every month after you have bought (for an annual review to tell you that the car is still right for you) ... we may not call it commission any more, but hey if it looks like a duck, walks like a duck and quacks like a duck, then it must be 'advice'.

IvanOpinion

Thrugelmir said:

IvanOpinion said:

BritishInvestor said:

IvanOpinion said:

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.

"They ask pretty much the same questions an IFA would so you will get the same answer."
A discussion around risk, is, or should be, far more than just a questionnaire
"you do not need to pay the costs of an intervening salesman."
I'd hope a typical adviser does a tad more than "sell funds"

And yet in any dealings I have had with all IFAs the questions were pretty much the same as online questionnaires

In a far wider context with person to person one has a far more informed discussion. An hour or two of time can be invaluable in the longer term. As peoples comprehension levels differ. Depending upon on their understanding of the topic. Online questionnaires are too easy to skim through. People rarely read pages and pages on screen. 

Too easy to be dismissive too quickly of what is on offer if one looks hard enough. 

I used the analogy a while back that IFAs are were IT was 25-30 years ago.  In those days we deliberately used obfuscation and misdirection telling our customers that they did not understand what was going on and that is why they had to come to a specialist and pay me big bucks to do it for them.  It made me a lot of money.  Nowadays I have met 10 years olds that have selected the parts and built their own computers and you can buy ready to go systems off the shelves in supermarkets.  The information to so this is out there and most people now have the confidence to do this by themselves.  Some still look for advice from specialists though and some old die-hard IT people still insist that Joe Average cannot do it for themselves.  But, overall the IT market has evolved, the specialists have moved to meet much more complex needs.

The personal financial services market is about 25 years behind.  The information is out there and 'supermarkets' sell pretty much anything an investor needs allowing people to select the 'parts' and built their own portfolios.  However some old diehard advisors still try to use obfuscation insisting that Joe Average cannot do the job just as well for themselves using 'off the shelf parts.  Those that have the confidence can use advice freely available to assemble the end product (a portfolio) just as well, and sometimes better, than any IFA.  However the real specialists will evolve and move to meet the more complex financial needs.

Years ago I would have charged someone to look and sort out their computer, nowadays I mostly just do it for friends but occasionally would look at a friend of a friends computer for nothing more than a few beers.  In another few years personal financial services will have caught up and the high fees currently being charged for setting up and "managing" portfolios will be a thing of the past.  Most of the 'supermarkets' already offer pre-made portfolios to suit many risk profiles (not unlike many IFAs who also have their preferred pre-made up portfolios).

dunstonh

And a solution from Vanguard or one of the robo-advisors is likely to be at least as good as an IFA will manage. 

What happens when they are not?

I would've hoped/expected a bit more  

Don't worry, it is more than that.  The questions asked are a starting point.   whilst robo-advice relies on the score, IFAs are not allowed to.  It is an initial audit trail which it then questioned further with inconsistencies looked at along with understanding and capacity for loss.    

Thrugelmir

IvanOpinion said:

Thrugelmir said:

IvanOpinion said:

BritishInvestor said:

IvanOpinion said:

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.

"They ask pretty much the same questions an IFA would so you will get the same answer."
A discussion around risk, is, or should be, far more than just a questionnaire
"you do not need to pay the costs of an intervening salesman."
I'd hope a typical adviser does a tad more than "sell funds"

And yet in any dealings I have had with all IFAs the questions were pretty much the same as online questionnaires

In a far wider context with person to person one has a far more informed discussion. An hour or two of time can be invaluable in the longer term. As peoples comprehension levels differ. Depending upon on their understanding of the topic. Online questionnaires are too easy to skim through. People rarely read pages and pages on screen. 

Too easy to be dismissive too quickly of what is on offer if one looks hard enough. 

I used the analogy a while back that IFAs are were IT was 25-30 years ago.  In those days we deliberately used obfuscation and misdirection telling our customers that they did not understand what was going on and that is why they had to come to a specialist and pay me big bucks to do it for them.  It made me a lot of money.  Nowadays I have met 10 years olds that have selected the parts and built their own computers and you can buy ready to go systems off the shelves in supermarkets.  The information to so this is out there and most people now have the confidence to do this by themselves.  Some still look for advice from specialists though and some old die-hard IT people still insist that Joe Average cannot do it for themselves.  But, overall the IT market has evolved, the specialists have moved to meet much more complex needs.

The personal financial services market is about 25 years behind.  The information is out there and 'supermarkets' sell pretty much anything an investor needs allowing people to select the 'parts' and built their own portfolios.  However some old diehard advisors still try to use obfuscation insisting that Joe Average cannot do the job just as well for themselves using 'off the shelf parts.  Those that have the confidence can use advice freely available to assemble the end product (a portfolio) just as well, and sometimes better, than any IFA.  However the real specialists will evolve and move to meet the more complex financial needs.

Years ago I would have charged someone to look and sort out their computer, nowadays I mostly just do it for friends but occasionally would look at a friend of a friends computer for nothing more than a few beers.  In another few years personal financial services will have caught up and the high fees currently being charged for setting up and "managing" portfolios will be a thing of the past.  Most of the 'supermarkets' already offer pre-made portfolios to suit many risk profiles (not unlike many IFAs who also have their preferred pre-made up portfolios).

What's applicable for you may not be suitable for others. Broad brush painting offers no value.  

IvanOpinion

Thrugelmir said:

IvanOpinion said:

Thrugelmir said:

IvanOpinion said:

BritishInvestor said:

IvanOpinion said:

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.

"They ask pretty much the same questions an IFA would so you will get the same answer."
A discussion around risk, is, or should be, far more than just a questionnaire
"you do not need to pay the costs of an intervening salesman."
I'd hope a typical adviser does a tad more than "sell funds"

And yet in any dealings I have had with all IFAs the questions were pretty much the same as online questionnaires

In a far wider context with person to person one has a far more informed discussion. An hour or two of time can be invaluable in the longer term. As peoples comprehension levels differ. Depending upon on their understanding of the topic. Online questionnaires are too easy to skim through. People rarely read pages and pages on screen. 

Too easy to be dismissive too quickly of what is on offer if one looks hard enough. 

I used the analogy a while back that IFAs are were IT was 25-30 years ago.  In those days we deliberately used obfuscation and misdirection telling our customers that they did not understand what was going on and that is why they had to come to a specialist and pay me big bucks to do it for them.  It made me a lot of money.  Nowadays I have met 10 years olds that have selected the parts and built their own computers and you can buy ready to go systems off the shelves in supermarkets.  The information to so this is out there and most people now have the confidence to do this by themselves.  Some still look for advice from specialists though and some old die-hard IT people still insist that Joe Average cannot do it for themselves.  But, overall the IT market has evolved, the specialists have moved to meet much more complex needs.

The personal financial services market is about 25 years behind.  The information is out there and 'supermarkets' sell pretty much anything an investor needs allowing people to select the 'parts' and built their own portfolios.  However some old diehard advisors still try to use obfuscation insisting that Joe Average cannot do the job just as well for themselves using 'off the shelf parts.  Those that have the confidence can use advice freely available to assemble the end product (a portfolio) just as well, and sometimes better, than any IFA.  However the real specialists will evolve and move to meet the more complex financial needs.

Years ago I would have charged someone to look and sort out their computer, nowadays I mostly just do it for friends but occasionally would look at a friend of a friends computer for nothing more than a few beers.  In another few years personal financial services will have caught up and the high fees currently being charged for setting up and "managing" portfolios will be a thing of the past.  Most of the 'supermarkets' already offer pre-made portfolios to suit many risk profiles (not unlike many IFAs who also have their preferred pre-made up portfolios).

What's applicable for you may not be suitable for others. Broad brush painting offers no value.  

We used to say that in IT, we will build something specific to your needs.  It was mostly BS, we had a very limited choice of 4-5 systems and you can guarantee that one of those was the perfect system no matter who turned up.  The buyer could even tinker with them with a small number of additional parts (or upsells as we called them - often through obfuscation). Those broad brush strokes provided great solutions in 90% of cases.

Similarly with investments, the supermarkets offer pre-built portfolios. fund managers offer ready made balanced funds and IFAs offer their own pre-built portfolios.  You can guarantee that one of those pre-built portfolios will suit whatever buyer turns up at the door ... maybe an odd tinker here or there (again based on obfuscation).  The broad brush strokes will provide great solutions in 90% of cases.

There is no guarantee, no matter how customised you make it, that it will be better than any other sensible off-the-shelf solution.  In fact over customisation can actually make things worse - but hey, the more complicated you made it the more I could charge to maintain it.  

BritishInvestor

IvanOpinion said:

Thrugelmir said:

IvanOpinion said:

Thrugelmir said:

IvanOpinion said:

BritishInvestor said:

IvanOpinion said:

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.

"They ask pretty much the same questions an IFA would so you will get the same answer."
A discussion around risk, is, or should be, far more than just a questionnaire
"you do not need to pay the costs of an intervening salesman."
I'd hope a typical adviser does a tad more than "sell funds"

And yet in any dealings I have had with all IFAs the questions were pretty much the same as online questionnaires

In a far wider context with person to person one has a far more informed discussion. An hour or two of time can be invaluable in the longer term. As peoples comprehension levels differ. Depending upon on their understanding of the topic. Online questionnaires are too easy to skim through. People rarely read pages and pages on screen. 

Too easy to be dismissive too quickly of what is on offer if one looks hard enough. 

I used the analogy a while back that IFAs are were IT was 25-30 years ago.  In those days we deliberately used obfuscation and misdirection telling our customers that they did not understand what was going on and that is why they had to come to a specialist and pay me big bucks to do it for them.  It made me a lot of money.  Nowadays I have met 10 years olds that have selected the parts and built their own computers and you can buy ready to go systems off the shelves in supermarkets.  The information to so this is out there and most people now have the confidence to do this by themselves.  Some still look for advice from specialists though and some old die-hard IT people still insist that Joe Average cannot do it for themselves.  But, overall the IT market has evolved, the specialists have moved to meet much more complex needs.

The personal financial services market is about 25 years behind.  The information is out there and 'supermarkets' sell pretty much anything an investor needs allowing people to select the 'parts' and built their own portfolios.  However some old diehard advisors still try to use obfuscation insisting that Joe Average cannot do the job just as well for themselves using 'off the shelf parts.  Those that have the confidence can use advice freely available to assemble the end product (a portfolio) just as well, and sometimes better, than any IFA.  However the real specialists will evolve and move to meet the more complex financial needs.

Years ago I would have charged someone to look and sort out their computer, nowadays I mostly just do it for friends but occasionally would look at a friend of a friends computer for nothing more than a few beers.  In another few years personal financial services will have caught up and the high fees currently being charged for setting up and "managing" portfolios will be a thing of the past.  Most of the 'supermarkets' already offer pre-made portfolios to suit many risk profiles (not unlike many IFAs who also have their preferred pre-made up portfolios).

What's applicable for you may not be suitable for others. Broad brush painting offers no value.  

We used to say that in IT, we will build something specific to your needs.  It was mostly BS, we had a very limited choice of 4-5 systems and you can guarantee that one of those was the perfect system no matter who turned up.  The buyer could even tinker with them with a small number of additional parts (or upsells as we called them - often through obfuscation). Those broad brush strokes provided great solutions in 90% of cases.

Similarly with investments, the supermarkets offer pre-built portfolios. fund managers offer ready made balanced funds and IFAs offer their own pre-built portfolios.  You can guarantee that one of those pre-built portfolios will suit whatever buyer turns up at the door ... maybe an odd tinker here or there (again based on obfuscation).  The broad brush strokes will provide great solutions in 90% of cases.

There is no guarantee, no matter how customised you make it, that it will be better than any other sensible off-the-shelf solution.  In fact over customisation can actually make things worse - but hey, the more complicated you made it the more I could charge to maintain it.  

I can only comment on the retirement planning space, but >90% of the value add an adviser should bring is unrelated to investments and portfolio creation so I'm not sure why you are focusing on that - that problem was "solved" at least a decade ago.

That said, left to their own devices I would estimate that 99% of the general population make sub optimal investment choices. If you showed someone one fund manager that had generated 20% annual returns and one fund manager that had generated 10%, the vast, vast majority would flock to fund manager 1 without understanding why his returns were so much better. You only have to look at the bestselling fund lists to see evidence of this.

Albermarle

It is an interesting analogy with the IT world but there is a flaw in the argument . In the world of investments, pensions etc the level of knowledge of the general public remains  woeful , even amongst educated people . The large majority would not have a clue what a fund supermarket was or have the faintest  idea how to start constructing a portfolio. Many do not even realise their pensions are invested .

cfw1994

This is an interesting discussion. 

I feel that IvanO makes some very good points.  The likes of Vanguard have made it easy invest fairly safely.  I watched the Lars Kroijer videos many moons ago, and I tend to agree with his perspective: you don’t need to aim to beat the market, just match it.  Time in the market beats timing the market!

It is very easy to suggest “what if your Vanguard doesn’t manage to do as well as an IFA could?” with a knowing wink, suggesting IFAs will always “beat the market”,whereas the majority probably won’t.

I get the IT industry analogy - it is very accurate and in many ways, very similar: in years gone past, organisations paid very large sums for “solutions” that they might now ramp up directly with AWS or Azure at much lower cost. 

Financially, 2020 gives the average investor a HUGE amount of information compared with 1990 or 2000.

Use an IFA, by all means, if your circumstances are complex, your tax position complicated or you really are scared to take any responsibility for your finances.  If you earn enough to not have time to invest in understanding things, go ahead, find an IFA you can trust.....
....but please do it with the knowledge that the % they take from the value of the money they manage for you means your investments need to make that up....oh, & remember that their % will come off even if there is a bad year.  

As I write this I feel it will read as IFA-bashing, and really, I am not: I know a number of well-paid pals who are clueless on their finances and use IFAs: that is fine, but be sure to get more from the IFA than just investing advice: they should be helping you plan for your future.  

Mind you....back in 2015, none of them got the answer right to the question “where will you be in 5 years time?”