IFA Fees....

AlanP_2

IFAs are not thieves or charlatans, they are people providing an ADVICE service to the public. The final DECISION is yours.

They don't offer guaranteed returns (thankfully) nor do they offer a free service.

Using an IFA can make sense if you have no interest and no idea about investments but you will get better value for money if you have at least a basic understanding of investing and the various approaches and fund types. You can ask the IFA better questions to probe and appreciate not just "what" they are suggesting but "why" and whether that fits with your aims and objectives.

Asking about IFA use and fees on what is predominantly a DIY investing forum, where the regulars are interested in the subject, will always get a negative response so be aware of the context around some of the replies above.

You mentioned one who was a bit cheaper but not so good at communications. In my view communications is what you are buying so that would rule them out for me.

Albermarle

Hi with Aviva pension, has 200 funds i can chose from, most are based around gilts and bonds.

I find it hard to believe that some of the funds are not equity orientated .

As another poster says you are invested in a very low risk fund , hence why it has not grown very much .

That is not to say you should not move away from these older Aviva funds , but you can not just blame them for the weak performance. In other words if you go to an IFA , and say you only want to invest in low risk defensive funds then you will get a similar result .

MEM62

poppy10_2 said:

Most IFAs are charlatans. Will charge you huge fees for putting your money in underperforming assets. Just stick your pension in a global index tracker and forget about it till you retire. It will grow much more than the average spiv IFA will achieve

There was a time when that may have been the case.  However we now live in a very different world and that opinion is out-dated by at least a couple of decades.  It does not serve you (or anyone foolish enough to believe you) well.    

Ibrahim5

So the charlatans have been regulated into not being charlatans? In some areas yes they have been, but in the area of fees sadly not. They can still charge whatever they like. So if you use an IFA dictate the fees yourself. Tell them what you are willing to pay. If they don't agree take your business away. The IFAs won't suddenly start charging reasonable amounts. The customers need to take the initiative. The IFAs just put a suit on to pretend to be a real professional. It's not a professional job. They are overcharging.

Diplodicus

Do you envisage a lifelong dependency on your IFA, ChainsawCharlie?

OldMusicGuy

ChainsawCharlie said:

Yes I do realise that funds are all different and risk attitude of course plays a big part.
My point is just that, I have no knowledge of how to invest, so thats why I need an IFA.  Having said that with the funds I have available, after checking allocations, most available to me tend to be around 50-60%gilts/bonds.

I understand an IFA will have access to much higher quality funds  so once I have an IFA I will be far more confident with their choice of fund  rather than mine, so will feel better about a higher risk.

You could read this simple book which will tell you how to set up a straightforward, low cost portfolio: DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning by John Edwards.

You are wrong that an IFA will have access to "much higher quality" funds. If you move your pension to a SIPP you have access to pretty much all the same funds that an IFA does. Quality doesn't come into it, you are falling for the myth that IFAs are somehow investment wizards. They aren't. 

Reading that book will help. Even if you decide you can't make the choices yourself, it will help you ask better questions of potential IFAs. 

JohnWinder

ChainsawCharlie said:

I understand an IFA will have access to much higher quality funds 

I'd say that's highly unlikely. And when you've finished Edwards' book on pensions, recall that costs count and read this one for free! https://ia803405.us.archive.org/23/items/the-bogleheads-guide-to-investing/The Bogleheads' Guide to Investing.pdf

If it doesn't convince you you don't need an advisor to not only get but find the best investments, nothing will.

csgohan4

poppy10_2 said:

Most IFAs are charlatans. Will charge you huge fees for putting your money in underperforming assets. Just stick your pension in a global index tracker and forget about it till you retire. It will grow much more than the average spiv IFA will achieve

Bit of a sweeping statement and ridiculous to make. Not every one can fully understand P/E ratio, can read KIIDs' nor formulate a balanced investment strategy. look at the countless I have 100k threads where to invest?

If you invest DIY wrongly, you only have yourself to blame. Go all in on crypto and Tesla YOLO?.

It takes a long time to understand about investing, much more and riskier if in individual shares.

What would you do if your funds tanked 30+% as they did in March 2020, stick or twist, who you going to ask?

I don't use an IFA as I have done some research and prefer DIY and understand the risks, I am still learning all the time. If you think you have an edge, your wrong, unless your Warren Buffet.  I have and will lose money as that is part of investing, My experience with certain shares and funds have taught me that

IFAs' have their place for people who truly want to invest and forget. They will usually get an idea of your level of risk and preferences and go from there. Much like mortgage brokers they have their place and they can hand hold you.

You want advice, generally have to pay for it. 

Should I invest in China now? Active or passive funds? ETF's, IT's Funds, Which tracker? tracking what? EM exposure??? which ones. All questions you need to do your research and goes beyond just picking the top rated ones on morning star.

Poppy your generalized view of just a global index tracker to a new investor is daunting, Do you know how many there and what they track, do you know which has more EM and which doesn't have ? OCF and implications??

Your oversimplification is and can be harmful to those new to DIY investing. You need research and due diligence, do you have the time to do and if your not doing it, your putting your money at risk for today's winners who could be tomorrows losers. 

Langtang

I am new to this investing game, but find some of the posts on this thread quite insulting. It’s the kind of thing you’d find on Facebook. 

“Brain Surgery is quite simple, but you need to do your own research. Sticking the knife in the wrong place can kill the patient - but don’t let that put you off”

You either use an IFA, or you don’t. There’s no need to be so insulting. I’d like it if some on here were to tell us what they do for a living….

csgohan4

Langtang said:

I am new to this investing game, but find some of the posts on this thread quite insulting. It’s the kind of thing you’d find on Facebook. 

“Brain Surgery is quite simple, but you need to do your own research. Sticking the knife in the wrong place can kill the patient - but don’t let that put you off”

You either use an IFA, or you don’t. There’s no need to be so insulting. I’d like it if some on here were to tell us what they do for a living….

I think people just don't like paying for services they aren't using and enforce that view on everyone else as the bible. Everyone is different, every one has their own risk appetites and financial goals and life expectancy. 

All in for a global tracker when your retirement is the wrong thing to do imo, but some are 100% in equities, again one man's meat is another man's posion.

The sweeping statement by Poppy of I am right your wrong is quite damaging to new investors wanting a more balanced view. Just because you have done some research, doesn't mean it's always the right thing for your neighbor, after all they are not you. 

 I don't use an IFA myself  for investing as mentioned, but neither do I see them a useless entity according to Poppy, they have their use.


You could technically service your car, I've known people to do this, replace brakes e.t.c. But You could look up all the youtube vids on this, could you genuinely expect public joe to do it? Just because it's free advice doesn't always means it's the right thing. Your local dealer/garage may have to fix more because your own blunders and ultimately cost you more