Why is the cost of advice so high?

Albermarle

SouthCoastBoy said:

Does 5k example of the IFA quote the number of hours and also if asked a breakdown of what work will be completed in those hours? Not a justification of the hourly rate, that is entirely discretionary, but I don't think it is unreasonable for the IFA  to give a breakdown of the work being executed during the hours billed for. 

This is exactly how it should be.
A full description on what services are  offered . Length of contract , payment terms etc .
Then a price - no justification needed. 
Customer then buys or doesn't buy 

Thrugelmir

Albermarle said:

SouthCoastBoy said:

Does 5k example of the IFA quote the number of hours and also if asked a breakdown of what work will be completed in those hours? Not a justification of the hourly rate, that is entirely discretionary, but I don't think it is unreasonable for the IFA  to give a breakdown of the work being executed during the hours billed for. 

This is exactly how it should be.
A full description on what services are  offered . Length of contract , payment terms etc .
Then a price - no justification needed. 
Customer then buys or doesn't buy 

Time recording systems for professional services such as accountants, solicitors etc etc have been around for decades. Spent over a decade of my working life accounting for 5 minute time segments. Which many in the workforce would find challenging these days if asked to do so. 

LV_426

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

P933alilli

How dyou find an IFA that isnt part of  practice?

LV_426

Collyflower1 said:

How dyou find an IFA that isnt part of  practice?

Not sure generally, but I got his name through a friend.

BritishInvestor

LV_426 said:

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

A one-man band or just someone that isn't part of a national group?

LV_426

BritishInvestor said:

LV_426 said:

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

A one-man band or just someone that isn't part of a national group?

One man band. Sounds like he has enough regular clients to bring in a solid income. And of course being self employed is a huge advantage (for me anyway, in terms of fees).

dunstonh

Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

Networked IFAs typically have higher costs than direct authorised IFAs.  Plus they have less freedom of choice.  (identified by the compliance footer saying xyz is an appointed representative of abc rather than just saying the firm is authorised and regulated by the FCA).

Using certain directories can increase your cost as the directory takes a cut of the earnings.

Director/owner IFAs can be cheaper than employee IFAs. as they are not sharing a cut with the employer.   However, director/owner IFAs "tend" to be busier and/or more qualified and can charge more for their time.

Adviser firms linked to unions or affinity groups are often more expensive as they share a cut of your fee with the union/affinity group.

Albermarle

LV_426 said:

BritishInvestor said:

LV_426 said:

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

A one-man band or just someone that isn't part of a national group?

One man band. Sounds like he has enough regular clients to bring in a solid income. And of course being self employed is a huge advantage (for me anyway, in terms of fees).

I would have thought that a small group of IFA's ( 3 or 4 ) sharing an office and some admin/IT costs would actually be more cost efficient than a one man band ?
Also they can cover for each other in case of illness, holidays etc

dunstonh

Albermarle said:

LV_426 said:

BritishInvestor said:

LV_426 said:

I think I have a promising way forward here. Had a conversation this morning with an IFA recommended by a friend. I was left with a good feeling about him, and have arranged further discussion.
Maybe my mistake was going to IFAs who were part of a practice. Probably costs are higher and they need to charge bigger fees.

A one-man band or just someone that isn't part of a national group?

One man band. Sounds like he has enough regular clients to bring in a solid income. And of course being self employed is a huge advantage (for me anyway, in terms of fees).

I would have thought that a small group of IFA's ( 3 or 4 ) sharing an office and some admin/IT costs would actually be more cost efficient than a one man band ?
Also they can cover for each other in case of illness, holidays etc

I can speak from personal experience.  I used to be a single adviser but went on to add mutliple advisers. Each time I added a new adviser, the overall costs went down and became cheaper.     Certain things have a minimum cost.   i.e. two single person firms will likely pay more PI insurance than combined.   Software is often cheaper on second and subsequent licences.

However, there comes a point where adding advisers becomes more expensive as you start to need greater numbers of support staff and compliance staff and certain software moves you to enterprise level licences.   I estimate around 5 advisers but others may have different views.