ifa moving to True Potential

NottinghamKnight

grinch53 said:

Thanks all; the ifa stated that the amount of compliance was too much for him so spent more time and costs on this than servicing clients. That citywire article certainly makes my decision justified .As pointed out it is the drawdown process which concerned with as I would need a bit of hand holding or choose provider/platform which is easier to navigate  and initiate/execute drawdown which will be soon.

You could always be cheeky and ask him how much he's getting for his business, though he's unlikely to disclose. 

Albermarle

NottinghamKnight said:

grinch53 said:

Thanks all; the ifa stated that the amount of compliance was too much for him so spent more time and costs on this than servicing clients. That citywire article certainly makes my decision justified .As pointed out it is the drawdown process which concerned with as I would need a bit of hand holding or choose provider/platform which is easier to navigate  and initiate/execute drawdown which will be soon.

You could always be cheeky and ask him how much he's getting for his business, though he's unlikely to disclose. 

I think from other threads it seems that they only get paid significant amounts by TP if they bring enough customers over with them. Hence making the conflict of interest even worse.

fred246

Unfortunately IFAs are not very professional. Lacking in the ethics and morals department. It normally takes action by regulators to end their scams.

zagfles

NottinghamKnight said:

grinch53 said:

Thanks all; the ifa stated that the amount of compliance was too much for him so spent more time and costs on this than servicing clients. That citywire article certainly makes my decision justified .As pointed out it is the drawdown process which concerned with as I would need a bit of hand holding or choose provider/platform which is easier to navigate  and initiate/execute drawdown which will be soon.

You could always be cheeky and ask him how much he's getting for his business, though he's unlikely to disclose. 

According to the citywire article 8% AUM. So TP paying 8% of your pot to get your business. They'll obviously be looking to get that and more back from you in charges over the years.

[Deleted User]

fred246 said:

Unfortunately IFAs are not very professional. Lacking in the ethics and morals department. It normally takes action by regulators to end their scams.

This is unfair. They are the same humans as everyone else and respond to incentives.   What their clients need to realize is that advisers are meant to advise and that they can be good and bad, same as with other professions.  People need to take responsibility for decisions.  In general, for routine pension investments  cutting out the intermediaries is financially smart but sometimes advice is needed. In all cases clients need to have enough understanding to make an informed decision. 

barnstar2077

Deleted_User said:

fred246 said:

Unfortunately IFAs are not very professional. Lacking in the ethics and morals department. It normally takes action by regulators to end their scams.

This is unfair. They are the same humans as everyone else and respond to incentives.   What their clients need to realize is that advisers are meant to advise and that they can be good and bad, same as with other professions.  People need to take responsibility for decisions.  In general, for routine pension investments  cutting out the intermediaries is financially smart but sometimes advice is needed. In all cases clients need to have enough understanding to make an informed decision. 

For some reason I have a feeling that you won't change his mind Mordko! :  )

fred246

Sorry for telling the truth. This scam needs stopping. Only a regulator can stop it.

[Deleted User]

zagfles said:

NottinghamKnight said:

grinch53 said:

Thanks all; the ifa stated that the amount of compliance was too much for him so spent more time and costs on this than servicing clients. That citywire article certainly makes my decision justified .As pointed out it is the drawdown process which concerned with as I would need a bit of hand holding or choose provider/platform which is easier to navigate  and initiate/execute drawdown which will be soon.

You could always be cheeky and ask him how much he's getting for his business, though he's unlikely to disclose. 

According to the citywire article 8% AUM. So TP paying 8% of your pot to get your business. They'll obviously be looking to get that and more back from you in charges over the years.

TP have five basic portfolios: Defensive, Cautious, Balance , Growth, Aggressive. Clients are assigned according to "risk profile".
However, the performance of these portfolios is very regular: ranging from 2.5% to 3.1% growth in the year up to the end of November. Enough to pay platform and adviser charges and still register a tiny +.

TP have been among the most aggressive, fastest growing financial services companies, with a steady influx of converted DB pensions. It remains to be seen whether they manage to recapture the attractive growth rates their portfolios managed to realise in the formative years, before the bulk of clients came on board.

[Deleted User]

Deleted_User said:

fred246 said:

Unfortunately IFAs are not very professional. Lacking in the ethics and morals department. It normally takes action by regulators to end their scams.

This is unfair. They are the same humans as everyone else and respond to incentives.   What their clients need to realize is that advisers are meant to advise and that they can be good and bad, same as with other professions.  People need to take responsibility for decisions.  In general, for routine pension investments  cutting out the intermediaries is financially smart but sometimes advice is needed. In all cases clients need to have enough understanding to make an informed decision. 

But it's not as simple as advisers advise/ clients decide because, what is the point of retaining an adviser unless you defer to him?
You're right, Mordko, to say that the buck stops with the individual: it does. But most advisers know very well that their clients expect them to do a better job than the client would do for himself. That is the basis of their relationship. The adviser generally has no problem with this because he gets paid regardless. 
Secondly, most advisers are quite engaging people. I can't speak for grinch53 but those I have known on a short term basis have been very personable. Their clients trust them. They come to their clients' houses. They build a rapport that sustains a long term relationship. So when an adviser says  "Moving to True Potential would be a good move for you" that advice may well be coming from someone the client considers almost to be a trusted friend of the family.

[Deleted User]

ZingPowZing said:

Deleted_User said:

fred246 said:

Unfortunately IFAs are not very professional. Lacking in the ethics and morals department. It normally takes action by regulators to end their scams.

This is unfair. They are the same humans as everyone else and respond to incentives.   What their clients need to realize is that advisers are meant to advise and that they can be good and bad, same as with other professions.  People need to take responsibility for decisions.  In general, for routine pension investments  cutting out the intermediaries is financially smart but sometimes advice is needed. In all cases clients need to have enough understanding to make an informed decision. 

But it's not as simple as advisers advise/ clients decide because, what is the point of retaining an adviser unless you defer to him?
You're right, Mordko, to say that the buck stops with the individual: it does. But most advisers know very well that their clients expect them to do a better job than the client would do for himself. That is the basis of their relationship. The adviser generally has no problem with this because he gets paid regardless. 
Secondly, most advisers are quite engaging people. I can't speak for grinch53 but those I have known on a short term basis have been very personable. Their clients trust them. They come to their clients' houses. They build a rapport that sustains a long term relationship. So when an adviser says  "Moving to True Potential would be a good move for you" that advice may well be coming from someone the client considers almost to be a trusted friend of the family.

There are special situations when missing a key piece of information can cost a lot. Usually its when you are planning a major change.  Converting a DB pension to a market-based investment is one example when the advice is totally warranted. Do I really know all the benefits I am giving up? Have I considered all the risks?  You still need to be the one making the call but paying for a good adviser would be worth it, even if it wasn’t required. Moving pensions between countries - ditto. Sometimes, when you are moving from contributing to the withdrawal mode, a one off advice might be helpful.  Also, if you are completely ignorant and the adviser is good, his ongoing fees will be money well spend.  Neither condition is a given. 

What you are describing about advisers being engaging people is called marketing. They have to be good at it. Thats how they are rewarded. Its the number of clients they have rather than the clients’ returns that reward the advisers and keep them in the business. Frankly, engineers are also rewarded for being good at selling.  Most professions are like this. They did a study in the US when doctors were rewarded for doing a particular type of operation. The number of operations of this type skyrocketed. Then it went down again when the incentive was removed. 

Its just something to be aware of, whether the vender is engaging or not.