Questions re IFAs

Linton

Rollinghome said:

Linton said:

I have no outright opposition to simple global low cost index funds or multi-asset funds based on index trackers as the most suitable option for people in the accumulation phase with an ongoing income who make ongoing pension contributions  and have no wish or need to get involved in the details of investing.   This must surely be the majority of all investors. The simplicity and inherent avoidance of major investment errors outweighs other considerations.

I'm sure you aren't suggesting that index trackers such as ETFs are just for beginners when they are favoured by many professional investors including pension fund managers. Anyone without at least one in their pf is probably missing something.

I invest in individual stocks, ITs, managed funds, and trackers, both as funds and ETFs.  Each tool has a place, and it would be a mistake to dismiss any one of them.

Precisely. What ever investment is appropriate for enabling you to meet your objectives is fine.  We agree.  I , not sure how we got here from IFAs.

Diplodicus

Anyway, have a good week-end all, however you choose to spend it!

ozzy_man

Ok so a couple of people have commented that for the amount involved an IFA may be less worthwhile, and I have to admit I am reluctant to shell out £1600 up front without really knowing if I will get that value back in terms of higher returns than I would likely get as a total DIY novice.

So if I decided to go down the DIY route what's the best thing to do with the money in the meantime while I try and work out what I'm doing? Cash ISA for a few months before branching out with some of it into some sort of fairly low risk fund? 

dunstonh

Ok so a couple of people have commented that for the amount involved an IFA may be less worthwhile, and I have to admit I am reluctant to shell out £1600 up front without really knowing if I will get that value back in terms of higher returns than I would likely get as a total DIY novice.

An IFA is not an investment manager.   The primary objective of an IFA is to put in place solutions that are most suitable for you.  i.e. they match your objectives, risk profile, capacity for loss, behaviour etc.   Where necessary, the IFA will aim to improve your understanding.       The IFA will be more knowledgeable on investments and portfolio building and will buy in data, research and analysis that you will not have access to. 

If you DIY well, you can save money. If you DIY badly, it can cost you far more than the adviser fees.

bostonerimus

ozzy_man said:

I see from other posts in the forum that the prevailing opinion is IFAs aren't necessary/are charlatans etc, but all of the above is in light of the fact I have absolutely no clue about investments nor really enough time to learn how to do it well DIY. I'm thinking maybe I'll give an IFA a go for a year and try and use what he does as a basis to possibly learn how to do it myself after that.

Whether you employ an IFA or not I strongly suggest that you take the time to learn about investing. You might find that it can be quite simple to DIY and even if you decide to use an IFA you need to understand what you are paying for. Frankly I just don't understand not spending a little time to learn how to invest and manage your own money. So buy a few books, read a few websites: a few days, a week or a month taken now to increase your knowledge will be the best investment you ever make.

Langtang

bostonerimus said:

ozzy_man said:

I see from other posts in the forum that the prevailing opinion is IFAs aren't necessary/are charlatans etc, but all of the above is in light of the fact I have absolutely no clue about investments nor really enough time to learn how to do it well DIY. I'm thinking maybe I'll give an IFA a go for a year and try and use what he does as a basis to possibly learn how to do it myself after that.

Whether you employ an IFA or not I strongly suggest that you take the time to learn about investing. You might find that it can be quite simple to DIY and even if you decide to use an IFA you need to understand what you are paying for. Frankly I just don't understand not spending a little time to learn how to invest and manage your own money. So buy a few books, read a few websites: a few days, a week or a month taken now to increase your knowledge will be the best investment you ever make.

I agree. I’m fairly new to investing and a total novice at dealing with IFAs, but the help I’ve had on these boards, from various people has been invaluable. Invaluable. 

 I bought a book called smarter investing by Tim Hale through the advice given on here. It’s been a really tough read for me, I’ve had to go through every part of the book multiple time in the hope that things stick with me. Some have, some haven’t but I’m a better person for it overall.  

If an IFA is right for you, do it (it is for me). If you have an inkling about what’s going on with your investments whilst dealing with your IFA, it’s kind of empowering. If you feel like you want to learn and do it yourself, then do it.. 

Everyone has an opinion on the IFA/DIY saga, and some share there opinions on here quite vociferously.  Remember, these are just random people on the internet. Some are right, some are wrong. 

zagfles

Linton said:

In the old days you as a customer did not suffer financially from the IFA taking a commision.  If you went to the fund provider directly they kept the commision for themselves.

Nobody with any sense did that. They'd use an "execution only" broker who would refund the initial commission and sometimes all or part of the trail commission.