Are IFA fees reasonable?

fred246

AlanP_2 said:

I haven't used one, apart from for DB pension transfer required advice, so have no personal evidence on whether they add value or not. 

When I was in my twenties an IFA invested my pension in a money market fund. I think I can safely say that didn't add any value.

Linton

fred246 said:

AlanP_2 said:

I haven't used one, apart from for DB pension transfer required advice, so have no personal evidence on whether they add value or not. 

When I was in my twenties an IFA invested my pension in a money market fund. I think I can safely say that didn't add any value.

When I was in my late 30s the advice from an IFA led to me being able to retire in my mid 50s. It was not due to any magic skill in choosing funds but rather in helping to identify an objective and showing how it could be achieved.

That is what the naysayers fail to understand.. Choosing funds is a minor part of an IFAs job which is why many contract out that work.  Really it is all about helping to identify a client’s objectives and the management of their finances required to achieve them at minimum risk.

JohnWinder

To whom do they contract it? I'd like to read up on it.

The_Green_Hornet

Linton said:

fred246 said:

AlanP_2 said:

I haven't used one, apart from for DB pension transfer required advice, so have no personal evidence on whether they add value or not. 

When I was in my twenties an IFA invested my pension in a money market fund. I think I can safely say that didn't add any value.

When I was in my late 30s the advice from an IFA led to me being able to retire in my mid 50s. It was not due to any magic skill in choosing funds but rather in helping to identify an objective and showing how it could be achieved.

That is what the naysayers fail to understand.. Choosing funds is a minor part of an IFAs job which is why many contract out that work.  Really it is all about helping to identify a client’s objectives and the management of their finances required to achieve them at minimum risk.

I've never taken advice from an IFA and I retired at 50.

Anecdotal evidence is just that, anecdotal.

AlanP_2

When I was in my twenties an IFA invested my pension in a money market fund. I think I can safely say that didn't add any value.

When I was in my late 30s the advice from an IFA led to me being able to retire in my mid 50s. It was not due to any magic skill in choosing funds but rather in helping to identify an objective and showing how it could be achieved.

So, the IFA users are 2-1 ahead on my reckoning.

Anyone else that has used an IFA have a view?

AlanP_2

Lars Kroijer is a highly respected former hedge fund manager. It's fair to assume his suggestions may be informed by useful experience, if not the definitive answer.

And these are examples of 20 succesful Hedge Fund managers, their useful experience has led to different conclusions as they all use an active strategy

https://moneyinc.com/20-richest-hedge-fund-managers-world/

cloud_dog

I have to say I have really struggled with a number of the posts here (diverting from the OPs initial question), and would go as far as saying I find some of the 'positions' quite simplistic in their restricted view <<ducks for cover>>.

The situation is really very simple, for those that see a value in using a IFA they are absolutely correct for themselves; they are as correct as those who obsess about Vanguard funds (despite cheaper options available for a number).  The question really is, where an IFA is required, for whatever reason, it is a personal consideration and if they are comfortable with the charges then that is acceptable.  The OP obviously felt unsure about the charges and so posed the question, to which information was provided to assist in that deliberation process.  Additionally, there is nothing which stops a person from stopping to use an IFA if they ever overcome the challenges that made using an IFA appropriate.

The personal psychology of investing is a significant consideration, and one people cannot overlook simply because it may be obvious, clear, straightforward to themselves.

For disclosure, we don't use an IFA because I am comfortable in undertaking this.  If I were to come in to significant amount of money then I would consider using an IFA.  If I were not around my wife should absolutely use an IFA, otherwise all the monies will be left sat in a savings account for the next 30 years.

fred246

I think when you have an IFA who lives on the forum promoting IFAs that it is important that people who have had bad experiences or just believe in investing for themselves provide some balance. Otherwise people would just ask a question and end up thinking that paying an IFA was the only solution.

Aged

I've used IFAs, paid them a bundle of money to look after my affairs for me and they've let me down badly. I really want to use an IFA because I lack the experience, knowledge and confidence to DIY but after the bad experiences I've had it's very hard to go down that route again. There's just no trust there. 

hyperhypo

I used an IFA a few years ago to help validate choice of asset allocation ,  paid for at a reasonable rate on a transactional basis. Perfectly happy with their approach and charging etc. I  wish i'd paid more attention in retrospect as i subsequently started tinkering around with the fund allocations on the basis that i could do it better, and entered a phase of fiddling.   Since then i've stopped tinkering, ploughed my own furrows,  but i'd  be happy to talk to and pay again. The problem i've found is the local availability of advice, on a transactional basis, from someone independent.  Last time i tried, i realised i was talking with someone who wanted to charge me £2000 simply to act as a gatekeeper to Prudential Prufund, which wasn't what i had in mind.