Views on advisors

ChilliBob

Hey guys, 
I'm keen to get people's views on financial advisors when it comes to creating a portfolio.. 
1. Did you bother when starting out, or just learnt as you went, carefully
2. Do you continue to use one? If so in what capacity?
3. Assuming you *dont* use someone to do it for you (since they take a % cut) presumably you just pay for advise adhock, much like you might for legal advice?

On the face of it I'm thinking it's unnecessary with enough research and care, but unsure if that's a reasonable view, or very naive. 

Thoughts most welcome, cheers guys. 

Thrugelmir

If you decide to DIY would you be be prepared to pay for research?  

cattie

I started out with an IFA, but once they had to make the fee structure much clearer, I only then realised how much I was paying the advisor & the fund platform & what a chunk I was having taken from my portfolio each year. I'd been with the advisor for a number of years but on a self select basis. Every 6 months I'd get an update on funds they dealt in indicating whether to hold or sell in their view, so my choices were guided by that.

For the most part I think the funds I went with did reasonably well, but gradually understanding just a bit more regarding investing thanks to this very board, I decided to go it alone about 18 months ago & moved from the IFA to invest via iweb. The greater part of my investment is now in Vanguard & HSBC global funds, but I do have a few others that I'm happy to invest smaller amounts in to take a bit of a punt where I might have seen some positive comments.  I'm not adventurous, but neither am I cautious, so somewhere in the middle.

csgohan4

1: Didn't bother, did alot of research, Monevator website was a good start. Much more rewarding to see the investments you choose and understand to grow
This forum is good and I read all of bowheads posts for the last 6 months and researched this forum before making the dip into investing
Always better to invest in something you understand, rather than leave it to a stranger and hope for the best
2: I use one for my pension and general financial planning
3: I paid a one off fee for my IFA and he answers queries ad hoc with no extra fee, I do give him other business via remortgages which probably help. 

I didn't bother with IFA for creating portfolio, because you have your own risk appetite which changes over time and your free to do what ever you want. My IFA would be having kittens if he knew I had invested in IAG shares, but I've made a good profit. 


however IFA have their place, people do use them for their portfolio, nothing wrong with it, especially if they don't have the time to research.

tacpot12

I started investing via my pension and initially I just picked some funds more or less at random. Luckily, I was able to then read up on the funds, and learned a little about investing. This lead me to refine my fund selection towards riskier funds - I was 25-27 years old at the time, so one of the things I learned was that you need to take more risk to stand a greater chance of outpacing inflation. 

I also worked for a company that sold financial modelling software (like Excel), so I modelled my pension and this taught me to also take charges as well as performance into account. 

Over time, and as I was able to put more money into my pension, I learned more and more, and realised that while I had chosen wisely from the pool of funds available, the choice of funds was limited to one company (Halifax/Bank of Scotland). By the time I wanted to develop a realistic plan for retirement (around the age of 50), I had accumulated two DB pensions and three DC pensions (my personal pension from age 25 plus two employer schemes where the employer was either contributing significantly or subsidising the charges.)  When choosing funds for the other DC pensions, I basically picked the riskiest fund available. I went to a IFA to ask for advice about transferring the two DB pensions, and all the DC pensions into a single pension. Their advice, which I took, as was to leave the DB pensions, and move the DC pensions to SIPP.  I didn't want them to advise me on the portfolio as I felt I had learned enough about investing to go it alone. As it happens, I found out that I didn't know enough because choosing investments for the "accumulation" stage of your pension can be different to choosing investments for the "decumulation" phase. There are additional decisions to be made and different factors to be taken into account.

I continued to use my background in Financial Modelling to model my retirement plans, and used tools such as SimFire and Firecalc to stress-test my plan. Others may not be so comfortable with this sort of task, and might want an IFA to take responsibility for their retirement planning. 

Another_Saver

ChilliBob said:

Hey guys, 
I'm keen to get people's views on financial advisors when it comes to creating a portfolio.. 
1. Did you bother when starting out, or just learnt as you went, carefully
2. Do you continue to use one? If so in what capacity?
3. Assuming you *dont* use someone to do it for you (since they take a % cut) presumably you just pay for advise adhock, much like you might for legal advice?

On the face of it I'm thinking it's unnecessary with enough research and care, but unsure if that's a reasonable view, or very naive. 

Thoughts most welcome, cheers guys. 

1. Latter - but I work in finance so have an unfair advantage in that regard.
2. No
3. No

There is no single consensus view the forum could offer. We could not even attempt to offer meaningful opinions without knowing why you are considering an IFA, what for, what you expect and want out of them, your situation, why you are considering needing research and what you expect such research could do for you. As such, talking to a few local, reputable IFAs about your situation, what you want them for, what they can do, and how much it would cost, may be a sensible first step to inform your decision.

I manage my own money on Vanguard and iWeb and I buy and hold index funds. I may use an IFA for anything inheritance related in future.

ColdIron

IFAs can be expensive but so can plumbers. If you can DIY then you can save money but if you don't know what you're doing you should see the costs involved if you make a Horlicks of it

Others don't have the time or inclination and are prepared to pay someone else for the service, just like plumbers

coachman12

I completed my own first portfolio without professional help---- very time-consuming because of need for deep research and need for obtaining proper balance between sectors ( and to a lesser extent geographical sectors).
There came a time when I was happy with the finished product ---and then I employed several shares' advisers to keep everything running smoothly and to keep me fully informed of any developments as they happened and by sending me a monthly statement with all the company and share details. 
It's worked much like that ever since. When I have a spring-clean, I still do it myself; and then leave the portfolio to be watched and reported on by advisers and surveillance teams again. Sometimes I act on warnings and recommendations but in the main I still go for personal research and my own decision.
I have other managers and advisers but they are not for this thread.

Albermarle

Also be clear that IFA's can do a lot more for you than just portfolio planning .
The more complicated your financial life eg divorce, trusts, IHT planning, blended families , own company etc , then the more you need professional help . If you just want help with a simple pension and investments , then you can mainly manage this yourself , if you are prepared to put the effort in and have a head for money, tax rules, numbers etc 

ChilliBob

Thank you guys, that's very helpful. As regards my situation.. 
1. Just been made redundant, a, condition of which is selling the equity I held in the company. I'm 37, I wasn't planning on leaving or having to do anything with this equity for a few years!

2. I'd quite like the cash I receive to provide a steady stream of income I can live off (potentially forever!)

3. I'll use what I get to clear off any debts (just a small mortgage) before any kind of investing.

4. My background is in Data Engineering within the Alternative Assets space. So I'm comfortable with Excel, SQL and other associated technologies, and have some knowledge of finance from work and some broader concepts from my Economics degree (quite a while ago!) 

5. I'm naturally a *very* cautious person which I think I will find tricky in this situation!

6. I love researching stuff tonnes, and I love data!

7. I'm not restricting investments to stocks/shares/bonds but sense that's a good starting point.

8. I will have some time to devote to this, alongside keeping up with my industry etc for when I want to jump back into work

Sorry, I thought that was going to be about 3 points!

Cheers if you've read this far!

Audaxer

ChilliBob said:

2. I'd quite like the cash I receive to provide a steady stream of income I can live off (potentially forever!)

3. I'll use what I get to clear off any debts (just a small mortgage) before any kind of investing.

7. I'm not restricting investments to stocks/shares/bonds but sense that's a good starting point.

In answer to the points above:
2. As you are only 37, you would need a very large investment portfolio if you are intending that to provide your main income forever.
3. That's a good plan to clear all debts first.
7. I would say you should stick with stocks/shares/bonds as investments not just as a starting point, but invest in funds rather than individual shares or bonds. In my view there is no need to eventually move on to any more complicated investments, especially as you are naturally cautious.