IFA and Wealth Manager

choi

I have been in touch with a new  IFA 
They also claim to be Wealth Managers

Is their advice likely to be skewed.
Apart from confirming that their advice will be truly independent what other questions should I be asking

cattie

I'd want to know what their fees were, cost of any initial advice & of ongoing advice/management of the account. Also how often they will review my account & the funds I'm holding.

thegentleway

https://www.moneysavingexpert.com/savings/best-financial-advisers/

choi

I'm also going to check if there are DFM costs

dunstonh

Is their advice likely to be skewed.

Officially no but.......

The term "wealth manager" has no actual defined meaning in regulatory terms.  However, it tends to indicate a business model that has a reputation for high charges.    Tied Wealth managers use their own brand products/funds which are usually 100% active and expensive.  IFA wealth managers tend to use a single platform and a single discretionary investment manager for everyone.    A number of wealth managers have been told by the regulator or their compliance company to stop referring to themselves as IFAs because they are not really independent if everyone is going into one solution.  You can often see those transitioning to that as they reduce the emphasis on independence and use wealth management more.  Over time,  "independent" stops appearing and their client bank doesn't notice.

As a caveat to that, just because a firm is using the wealth manager tagline doesn't mean they are doing that. Some adviser search sites use wealth management as a search term for example.   However, you can usually spot them easily as they recommend an expensive platform (in the ballpark of 0.4-0.5% p.a.).  This is because the expensive platforms carry out the MIFIDII notifications meaning the adviser doesn't need to.  The cheaper platforms do not do it for the adviser.   They use a single discretionary fund manager that you pay for (despite the fact it reduces the adviser's work) on top of the fund fees.  So, in effect, you are paying to make the adviser workload less.

Apart from confirming that their advice will be truly independent what other questions should I be asking

Advice is going to be personalised to your circumstances.  Whether it is an FA, an IFA that should be an FA or an IFA, advice should always be personalised and suitable.      It's the actual solutions put in place where the classification/type matters.  

Ask them if they use discretionary fund managers (DFM).   A true IFA will either not use them or use them where suitable but that probably means in a minority of cases because most people don't need a DFM.    So, a response along those lines would be ideal.  Some IFAs reduce their own charge if a DFM is used to reflect the use of the DFM.  That can be desirable as they are not passing the cost to you.   If they say that they place all their investments with a DFM then it is not desirable as it means they are not considering all solutions (multi-asset, single sector funds etc).   General practitioner IFAs will use multiple investment styles/options and multiple platforms/providers depending on the individual.  It doesn't go all into one solution.

JohnWinder

Apart from confirming that their advice will be truly independent what other questions should I be asking

Good question. What about the answers? Two or three in one reply; three additional questions in a link supplied; and just one from an expert in the field. Total: 7.

Here's a link relevant to USA clients, and better still with suggested 'good' answers. There are at least another 7 in this list that could be reasonable for you; maybe 10. And all could enrich your sense of what's important. https://switchpointfinancial.com/19-questions-ask-financial-advisor/

Perhaps you could compile what you think is a useful, relevant list for us to trot out when this question gets asked again; because we're not doing it justice on the fly.

dunstonh

Here's a link relevant to USA clients, and better still with suggested 'good' answers. There are at least another 7 in this list that could be reasonable for you; maybe 10. And all could enrich your sense of what's important. https://switchpointfinancial.com/19-questions-ask-financial-advisor/

As I replied on a previous thread you listed this, most of the questions are not applicable to the UK or are automatically mandatory requirements in the UK and not optional.  Main differences are that UK advisers are not investment managers.
1,2,3 - not applicable to UK
4 - mandatory for all advisers in the UK irrespective of type
5 - you can ask but the FCA does not like discounts without good reason (if you can offer discounts if requested then your fee structure is wrong to begin with - discount with justifiable reasons are ok)
6 - retainers are not allowed. 
7 - Mandatory requirement to show in their terms of business
8 -  not applicable to uk
9 - irrelevant for the UK (solicitors and accountants don't take referral fees)
10 - Not applicable to the UK
11 - not applicable to the UK
12 - not applicable to the UK (UK advisers are not investment managers)
13 - irrelevent
14 - in the US its virtually impossible to beat the market.  Not the case in the UK.   However, suitability is priority in the UK.
15 - not applicable to the UK
16 - not applicable to the UK
17 - The FCA controls requirements in the UK and doesn't have the same mismatch of types that exist in the US.
18 - Probably the only sensible one in the list.
19 - completely wrong.   Everyone has different needs.  What is right for one person would be wrong for another.  Different tax positions, risk profiles, knowledge and understanding, needs and objectives.  Advice should be personalised and not a catchall for everyone.

Jonesy1977

The world of financial advisors can be extremely murky.  I would personally use @dunstonh advice in this thread. 

P933alilli

I contacted prosper wealth management yesterday through vouchedfor. They have excellent reviews and the guy i spoke to was an IFA and said i could call them at any time to arrange an hour free no obligation appointment to discuss my pension/cash/investment options with a summary of how it works and the fees involved. He said they could set up a plan to bring back returns of 5% over five years. When i told him my circumstances he said there were many similar clients on their books and he suggested a low risk strategy in which there was a risk of having poorer years but over the timescale would bring back a return that beats cash accounts .It sounds very convincing and would be what i'm looking for for some of my savings. I wondered if anyone has heard of the company or dealt with them? Thanks!

Albermarle

He said they could set up a plan to bring back returns of 5% over five years.

Clearly they can not  guarantee that ? The fact they would say this without caveats would make me a bit wary. 

Otherwise no harm having a free meeting . Sounds like you got on with the person OK, which is also a good start.

Of course you have to watch for the charges. and worth enquiring if they manage the investments for you directly themselves, or do they delegate that to a DFM ( discretionary wealth manager ) as that tends to add another level of charges .

Depending on the size of your fund etc you should look for max 1.5% for everything , preferably less.

tebbins

Collyflower1 said:

I contacted prosper wealth management yesterday through vouchedfor. They have excellent reviews and the guy i spoke to was an IFA and said i could call them at any time to arrange an hour free no obligation appointment to discuss my pension/cash/investment options with a summary of how it works and the fees involved. He said they could set up a plan to bring back returns of 5% over five years. When i told him my circumstances he said there were many similar clients on their books and he suggested a low risk strategy in which there was a risk of having poorer years but over the timescale would bring back a return that beats cash accounts .It sounds very convincing and would be what i'm looking for for some of my savings. I wondered if anyone has heard of the company or dealt with them? Thanks!

Never heard of Vouchedfor or the firm but they appear legitimate, obviously always DYOR (https://prosper-ifa.co.uk/, https://register.fca.org.uk/s/firm?id=001b000000Mfa9lAAB).