Views on advisors

Thrugelmir

hoofy said:

Thrugelmir said:

hoofy said:

AlanP_2 said:

BrockStoker said:

hoofy said:

Two months ago I decided to start investing because of the low interest rates on offer from the banks so I read up for a couple of days and then ploughed right in.

I know I might have made some highly risky/poor choices in the funds that I chose, but tbh, I'd rather lose money than have to deal with an IFA.

Same as last time I sold a property. I possibly could have got a better price if I'd have used an estate agent instead of putting my own for sale sign up, but again, I'd rather lose money than deal with an estate agent.

I've read some strange things on the interweb, but your post has to be one of the strangest I've ever come across!

Not from someone who is chasing the highest returns by the sounds of it

I've invested money I will probably never need, just for something to make life a bit more interesting.

There are socially beneficial investing options available. 

You mean like investing in companies that support renewable energy, etc?

Why would that be something that might be more of interest to me with my circumstances? 

An example.

https://www.triplepointreit.com/

Profit isn't everything. 

hoofy

Thrugelmir said:

hoofy said:

Thrugelmir said:

hoofy said:

AlanP_2 said:

BrockStoker said:

hoofy said:

Two months ago I decided to start investing because of the low interest rates on offer from the banks so I read up for a couple of days and then ploughed right in.

I know I might have made some highly risky/poor choices in the funds that I chose, but tbh, I'd rather lose money than have to deal with an IFA.

Same as last time I sold a property. I possibly could have got a better price if I'd have used an estate agent instead of putting my own for sale sign up, but again, I'd rather lose money than deal with an estate agent.

I've read some strange things on the interweb, but your post has to be one of the strangest I've ever come across!

Not from someone who is chasing the highest returns by the sounds of it

I've invested money I will probably never need, just for something to make life a bit more interesting.

There are socially beneficial investing options available. 

You mean like investing in companies that support renewable energy, etc?

Why would that be something that might be more of interest to me with my circumstances? 

An example.

https://www.triplepointreit.com/

Profit isn't everything. 

Thanks. You're right, profit isn't everything. I'll have a look at that and give it some consideration.

coachman12

hoofy said:

I've invested money I will probably never need, just for something to make life a bit more interesting.

That's what everybody is supposed to do-----only invest money that they can afford to lose ( which is a more or less what you are saying; all I did was add some slight gravitas ). As for making life more interesting, it is said that Russian Roulette is far more exhilarating.

Prism

coachman12 said:

hoofy said:

I've invested money I will probably never need, just for something to make life a bit more interesting.

That's what everybody is supposed to do-----only invest money that they can afford to lose ( which is a more or less what you are saying; all I did was add some slight gravitas ). As for making life more interesting, it is said that Russian Roulette is far more exhilarating.

No it isn't
Pretty much everyone nowadays has a DC pension which is fully invested. Many also have ISAs which they are going to rely on later. This is not money that they can afford to lose but they must be willing to risk to some degree. Long gone are the days that investing was done with fun money. 

[Deleted User]

Linton said:

ZingPowZing said:

Linton said:

ZingPowZing said:

Linton said:

ZingPowZing said:

ChilliBob said:

I'd be interested to know of any obvious questions to weed out !!!!!! people?

"So, your initial fee is xxxx; can you show me that you can save me xxxx +1 at the outset?"

Doesnt that rather depend on what you would do without advice?  In any case the primary issue isnt maximising returns but rather achieving objectives at minimum risk.

Hopefully a good IFA would explain, in the nicest possible way, why your question is foolish.

Chillibob has already indicated that he would invest 100% in funds, that his risk profile is very cautious and that his objective would be to have a steady stream of income off which he can live (potentially forever) and the value of the shares he is selling may put him in that ballpark. He has some experience of investing in ISAs and a decent pension. His accountant will be investigating the tax angles. He has an economics degree. He is well capable of gauging the glidepath to his objectives. The funds he chooses will, in any case, have at least one set of managers who are paid on results. 
You're really suggesting that he should employ an IFA to provide a service that should be unquantifiable ?

Almost all services are unquantifiable.  Do you choose your barber/hairdresser on the cost per hairs trimmed or a private doctor on the number of days you werent ill?

Lol, I did wonder whether comparisons between financial advisers and doctors might be suspended for the duration of the covid pandemic. The main difference would be a doctor's ability, when needed, to help make a patient better. Financial Advisers are essentially unaccountable - not only do they not claim nor aim to outperform a random pinsticker; they get paid the same either way. The real function of Chillibob's adviser, if he takes one on, would be to manage his expectations. 

But I believe you have half got the situation right in saying that the objective is to manage expectations, I see that as an important part of the service.  Clearly if the customer believes that his £200/month pension contribution is going to provide for a comfortable lifestyle and early retirement,  management of expectations is vital.
We can all agree on that.

The half you miss is to align the financial strategy and hence investment approach and hence choice of funds with expectations ending up in a viable strategy that satisfies the customer and has a good chance of success.   If that requires a reduction in potential returns to improve likelihood of success, so be it.
What's wrong with that? Well, potentially quite a lot for someone of already cautious disposition about to embark on a fifty year investment journey, if the main priority is to maintain the illusion of calm throughout its course. Because the adviser is going to be incentivised to pile caution on caution to meet expectations.  And  doesn't that strategy, supporting a regular stipend,  lead inexorably but slowly to a sum of zero at the end? That may be exactly what Chillibob wants. It may be that he sees it as an opportunity to live free of financial worries entirely because he can use the time more productively engaged in other pursuits. But that kind of strategy really isn't that hard to model and, if Chillibob feels he needs an adviser to do it for him, the thing for the OP to bear in mind is that he would not be buying the services of a doctor but someone with a doctor's "bedside manner"; long on reassurance, negligible difference to outcome. 

 The introductory meetings should be interesting, anyway. 

LHW99

I don't currently use an IFA. I have in the past paid for one-off advice.

My main issue (in the past, it may have changed now) was the judgement of risk, based on a questionnaire.

I don't have a single "attitude" - for example with the question How much would you be prepared to see your investments lose? 10%, 25%, 50% I can't just tick a box. 

Something held for a long time, and that's already in significant profit I would likely watch fairly closely / put on a stop-loss and / or perhaps sell if it dropped 10-20%.

Something held over any timescale that is volatile but with an overall tendency for capital increase I might well tolerate a 50% or greater dip, depending on what that section of the market was doing.

But I have been investing a long time and am a control freak. I like doing what I do, even if I'm completely wrong in my approach. Old age may well change my mind.

I wouldn't deter anyone from using an IFA if they want to, but I would still say they'd get more out of it if they educate themselves along the way.

dunstonh

My main issue (in the past, it may have changed now) was the judgement of risk, based on a questionnaire.

Advisers are not allowed to rely on the scoring of a questionnaire.  It is a starting point.  

Something held for a long time, and that's already in significant profit I would likely watch fairly closely / put on a stop-loss and / or perhaps sell if it dropped 10-20%.

Risk profiles are not cast in stone.  Many people are wavy line when it comes to the risk. 

Something held over any timescale that is volatile but with an overall tendency for capital increase I might well tolerate a 50% or greater dip, depending on what that section of the market was doing.

It is the overall weighting that matters really. Not the individual elements within it.  Unless the individual has poor investment knowledge and understanding and doesn't really want to put any effort in to understand.

fred246

Investments are very different for people who employ an IFA. They normally have an annual meeting. The last thing an IFA wants is to tell a customer is that their investments are worth less than last year. Obviously small reductions can be explained with a load of waffle about global markets, currency fluctuations, Trump etc etc. A very large reduction could lead to the BOOT. The ultimate horror for an IFA. A customer that the IFA was hoping to live on for many years to come has got rid of you because of global factors beyond your control. Drops are higher for an IFA because they always take their fees out. What is the point of employing an IFA if they lose you money? So generally IFAs invest at lower risk levels to keep themselves in a job. There is no point investing at a higher risk level if it means you could lose a customer.

wjr4

fred246 said:

Investments are very different for people who employ an IFA. They normally have an annual meeting. The last thing an IFA wants is to tell a customer is that their investments are worth less than last year. Obviously small reductions can be explained with a load of waffle about global markets, currency fluctuations, Trump etc etc. A very large reduction could lead to the BOOT. The ultimate horror for an IFA. A customer that the IFA was hoping to live on for many years to come has got rid of you because of global factors beyond your control. Drops are higher for an IFA because they always take their fees out. What is the point of employing an IFA if they lose you money? So generally IFAs invest at lower risk levels to keep themselves in a job. There is no point investing at a higher risk level if it means you could lose a customer.

Complete nonsense as usual. 

[Deleted User]

Bit harsh

wjr4, as an IFA, if you please:
They normally have an annual meeting. Nonsense? Please explain.
 The last thing an IFA wants is to tell a customer is that their investments are worth less than last year. Nonsense? Please explain.
Obviously small reductions can be explained with a load of waffle about global markets, currency fluctuations, Trump etc etc. Nonsense? Please explain.
 A very large reduction could lead to the BOOT. Nonsense? Please explain.
The ultimate horror for an IFA. A customer that the IFA was hoping to live on for many years to come has got rid of you because of global factors beyond your control .Nonsense? Please explain.
 Drops are higher for an IFA because they always take their fees out. Nonsense? Please explain.
 What is the point of employing an IFA if they lose you money?  Nonsense? Please explain.
So generally IFAs invest at lower risk levels to keep themselves in a job. Nonsense? Please explain.
There is no point investing at a higher risk level if it means you could lose a customer. Nonsense? Please explain.

Unfair to burden wjr4 with all the questions. Open to the usual circle of respondents.