IFA Fees....

Diplodicus

Ibrahim5 said:

I think it's important for balance. The forum has resident IFAs who will always tell you how marvellous they all are. It's hilarious how they all have to thank the same posts.

Yes, I agree. 
Apart from the obvious IFAs, there are a group of posters who rush to their aid on this board. For three main reasons:

1) The poster has an ongoing relationship with an IFA and will not contemplate the idea that they may be wasting their money.

2) The poster thinks himself a cut above posters who arrive on the board with basic questions. Hence, "I'm qualified to DIY, you're not." It lets them feel superior.

3) The poster is acutely conscious of cost but does not want to pay for financial adviser advice; cravenly hoping their unqualified support may stand them in good stead if they ask for free advice. As Shakespeare said "Where thrift may follow fawning."

Linton

Diplodicus said:

Ibrahim5 said:

I think it's important for balance. The forum has resident IFAs who will always tell you how marvellous they all are. It's hilarious how they all have to thank the same posts.

Yes, I agree. 
Apart from the obvious IFAs, there are a group of posters who rush to their aid on this board. For three main reasons:

1) The poster has an ongoing relationship with an IFA and will not contemplate the idea that they may be wasting their money.

2) The poster thinks himself a cut above posters who arrive on the board with basic questions. Hence, "I'm qualified to DIY, you're not." It lets them feel superior.

3) The poster is acutely conscious of cost but does not want to pay for financial adviser advice; cravenly hoping their unqualified support may stand them in good stead if they ask for free advice. As Shakespeare said "Where thrift may follow fawning."

The problem with the anti IFA brigade is that do not seem to understand what an IFA is for.  Clue: It's not to choose future outperforming funds. 

Anyway to respond to your points:
1) I am not an IFA, married to an IFA nor do I have any other personal links to IFAs.  I have not sought advice from an IFA for perhaps 30 years.  However the one I did talk to at that time certainly changed my life.

Having excess savings building up there was the quandary of what to do with them.  No internet, no mobile phones, all investments bought through intermediaries, serious investing was not something that many people did - like the stone age.  One of the first questions the IFA asked was "When do you want to retire?".  Something that in my mid 30's I had never thought about.  I grabbed a number out of the air and said 55. That became my primary financial objective and 20 years later I retired.

The point being that a major role of an IFA is to help the client manage their finances so as to achieve their objectives.   And the first stage of that may well be to help the client identify their objectives.  That is why I would always say that an IFA would sensibly the first port of call for many of the people who post along the lines of "I have inherited £250K what do I do with it".   No, the right answer isnt to choose the "xx" in VLSxx.


2) It is not about being a cut above anyone else.  Who cares? If a poster has clear objectives and knows what investment strategy would be most likely to achieve them then they probably dont need an IFA unless they have more complex issues like tax.  What they may need is information which the wide variety of regulars on this forum can probably provide.

Once one has objectives, a strategy to achieve them and then having translated that strategy into type of investments required the choice of funds is relatively immaterial.

If they dont have clear objectives and an investment strategy then they need help that is not easy to provide on a forum.  

3) Really? What are you talking about?

Diplodicus

Linton said:

Diplodicus said:

Ibrahim5 said:

I think it's important for balance. The forum has resident IFAs who will always tell you how marvellous they all are. It's hilarious how they all have to thank the same posts.

Yes, I agree. 
Apart from the obvious IFAs, there are a group of posters who rush to their aid on this board. For three main reasons:

1) The poster has an ongoing relationship with an IFA and will not contemplate the idea that they may be wasting their money.

2) The poster thinks himself a cut above posters who arrive on the board with basic questions. Hence, "I'm qualified to DIY, you're not." It lets them feel superior.

3) The poster is acutely conscious of cost but does not want to pay for financial adviser advice; cravenly hoping their unqualified support may stand them in good stead if they ask for free advice. As Shakespeare said "Where thrift may follow fawning."

The problem with the anti IFA brigade is that do not seem to understand what an IFA is for.  Clue: It's not to choose future outperforming funds. 

There is no anti IFA brigade. There is only a strong kickback to any post challenging the IFA agenda.

Anyway to respond to your points:
1) I am not an IFA, married to an IFA nor do I have any other personal links to IFAs.  I have not sought advice from an IFA for perhaps 30 years.  However the one I did talk to at that time certainly changed my life.
(upshot: retire at 55)
That became my primary financial objective and 20 years later I retired.

And now your sense of self worth is tied up with that decision. 

Note that you are near the bottom of the Great British Bake Off table. Is it not the case that you are so invested in received wisdom of investment strategy  - bolstered by others including IFAs - that you cannot now change horses midstream but must stick to your course? I have sympathy if that is the case.

Rollinghome

ChainsawCharlie said:

Fully agree Rollinghome,

Please don't think I am trying to argue your point but more, put my reasoning across

The problem I  have as the ordinary man in the street then is what else can you base your choice on other than past performance, even if you look at allocation of funds past performance still comes into play on equities, bonds, gilts, foreign markets, looking at the markets I guess most would agree China isn't too good at moment, but again I know naff all :-)

It's not just a problem for the ordinary man in the street, it's a problem for all investors, including professionals and those who give advice to investors.

The normal trajectory of the best performers over the last 5 years isn't just a slogan, it's a fact born out by several academic studies - which is why the FCA requires the familiar statement. There are also studies showing that the five stars awarded by such as Morningstar and Trustnet tend to be a reliable indicator of under-performance to come.

But that's not a bad thing for the DIY private investor as it might sound.  There isn't any magic sauce available only to professionals. PIs can invest well for themselves especially with the advantage of not having the burden of fees from "helpers". If returns on investment after inflation are as low as most expect over the coming years, handing over 25%, 50% of returns, or more, for "help" while you take all the risk, won't be comfortable.  So you should always manage without paying any more in compounding fees than you really need.

When investors in funds and ITs do get it wrong, it's more likely to be due to flawed behaviour rather than any disadvantage in choosing the funds/ITs to invest in - buying too high or panicking and selling too low because they've misjudged their risk tolerance. The last of those, their tolerance of risk, they can judge better for themselves than anyone else no matter how much they pay. Yes, you might choose badly sometimes, just as those who trusted Hargreave Lansdown - with all their research facilities - did when they were persuaded to buy Woodford.

The easiest way for someone to start is with index-tracking funds or etfs.  The vast majority of fund managers underperform the relevant index.  You could use multi-asset funds or, as things are at the moment, keep back cash to balance the risk. You could add something else to taste to try your investment skills, just keep well away from anything too specialised or off-piste.

Linton

Diplodicus said:

Linton said:

Diplodicus said:

Ibrahim5 said:

I think it's important for balance. The forum has resident IFAs who will always tell you how marvellous they all are. It's hilarious how they all have to thank the same posts.

Yes, I agree. 
Apart from the obvious IFAs, there are a group of posters who rush to their aid on this board. For three main reasons:

1) The poster has an ongoing relationship with an IFA and will not contemplate the idea that they may be wasting their money.

2) The poster thinks himself a cut above posters who arrive on the board with basic questions. Hence, "I'm qualified to DIY, you're not." It lets them feel superior.

3) The poster is acutely conscious of cost but does not want to pay for financial adviser advice; cravenly hoping their unqualified support may stand them in good stead if they ask for free advice. As Shakespeare said "Where thrift may follow fawning."

The problem with the anti IFA brigade is that do not seem to understand what an IFA is for.  Clue: It's not to choose future outperforming funds. 

There is no anti IFA brigade. There is only a strong kickback to any post challenging the IFA agenda.

Anyway to respond to your points:
1) I am not an IFA, married to an IFA nor do I have any other personal links to IFAs.  I have not sought advice from an IFA for perhaps 30 years.  However the one I did talk to at that time certainly changed my life.
(upshot: retire at 55)
That became my primary financial objective and 20 years later I retired.

And now your sense of self worth is tied up with that decision. 

Note that you are near the bottom of the Great British Bake Off table. Is it not the case that you are so invested in received wisdom of investment strategy  - bolstered by others including IFAs - that you cannot now change horses midstream but must stick to your course? I have sympathy if that is the case.

Bizarre.   If you dont know what you want how can you make a rational choice of how to invest.  If you dont know how to get what you want then what you invest in is much more likely to fail to achieve it?  Of course you can change objectives, but if you do you need to follow through the effects on your investments.

In my particular case once retired the objectives changed completely, and so did the strategy and therefore so did the investments.

What is your alternative?

Rollinghome

csgohan4 said: Point was they dropped over 35% from their height and if you invested at their height, you would still be in the red. 

How about if you look at china funds, BG China fund have gone down significantly for example

Baillie Gifford China (Class Accumulation Performance Charts & Tables (hl.co.uk)

Yep, that's what stocks do, they go up and go down. That's why you're likely to be better with collective funds to spread the risk and give less dramatic rises and falls.  Tesla is certainly not my bag, not least because I don't know a thing about their business.  If you do buy in, expect a bumpy ride. Similarly, at my age, I'm disinclined to go overboard in riskier markets. Remember, the prices that matter are the one you buy at and the one you sell at, not the ones in between.

Diplodicus

Well, a lot of people think your approach outdated, Linton.

A lot of people have decided they are not yet fitted to the rocking chair and - given the investment climate uniquely favourable to our generation - are still firmly in the accumulation phase. You may never catch them up but, ironically, you are still evidently fully absorbed in the business of husbanding  your fortune. 

Edit: You realise, Linton, that when your IFA  pitched the idea of retirement at 55, the expectation was that your lifetime would deplete your pension pot to nothing? 
This calculation still forms a good raft of the received wisdom passed over this forum by IFAs and their wingmen.

Thrugelmir

Diplodicus said:

ChainsawCharlie said:

Diplodicus said:

My £172, 000 has made just £1500 in 12 months invested in the aviva diversified assets fund 2 s6  so not even meeting inflation. Considering the investment climate over ther last twelve months, that is a bad return. 

But what you will notice, CC, is that none of the the 3 IFAs nor the next 3 IFAs you talk to will risk anything on providing a better return.

Take control. Investing is not rocket science. All else being equal, you will end up richer without a financial adviser. But, even if you don't, you will be happier being poorer by your own than someone else's agency.

Thanks for your input  but I would really prefer to have my pension looked after by an IFA rather than go it alone :-)

You realise that your IFA would give no undertaking to do better than an investor throwing darts at a dartboard?

At least the IFA wouldn't be wearing a blindfold. 

Albermarle

Diplodicus said:

Well, a lot of people think your approach outdated, Linton.

A lot of people have decided they are not yet fitted to the rocking chair and - given the investment climate uniquely favourable to our generation - are still firmly in the accumulation phase. You may never catch them up but, ironically, you are still evidently fully absorbed in the business of husbanding  your fortune. 

Edit: You realise, Linton, that when your IFA  pitched the idea of retirement at 55, the expectation was that your lifetime would deplete your pension pot to nothing? 
This calculation still forms a good raft of the received wisdom passed over this forum by IFAs and their wingmen.

Your contributions are often interesting, and you clearly have your own point of view ( the world would be boring if everybody was the same )
 However getting too personal, only actually undermines the credibility of your arguments .

Diplodicus

Yes, I suppose so, and apologise if any subject finds it too personal.

But generally, a riposte to the charge that "IFA haters" are transparently "bitter" or whatever and the larger group on IFA cheerleaders are disinterestedly objective. 

If the impartial reader wants objectivity, ask yourself, Which group is more invested? IFAs pushing their business (normalising £2,500 for advice in this instance) or those who question their narrative?