Restricted advisor - benefits vs disadvantages

wjr4

Avoirdupois said:

OK - next question - how do I pick the right one?  Is there a "league table"?  How do I know I can trust them - is there a website anywhere that reviews them?  I can check out a restaurant or museum by using TripAdvisor - surely for something more important like financial advice, there's something similar?  Or is it just pot luck?  Or do I simply compare their charges and pick the cheapest?  Or do I ponder the fact that it doesn't necessarily follow that the cheapest fees result in the best fund performance??  I'm confused...   Any pointers will be gratefully received - I've been trawling the web and don't see anything very striaghtforward with respect to making this critical choice.

VouchedFor has reviews 

Albermarle

OK - next question - how do I pick the right one?

It might sound a bit daft but you need to find one that you feel personally comfortable with , as you will be sharing a lot of personal info ( not just financial ) and making some joint decisions with them . You may well want them to meet other family members as well. 

As already said you are not picking one because you think that their investment recommendations will produce stellar returns . What you want is an overall financial plan , including best use of tax breaks, incorporating your own tolerance to investment risk, potential inheritance tax issues etc 

A plan that will meet your objectives at a reasonable cost .

 

Avoirdupois

Albermarle said:

OK - next question - how do I pick the right one?

It might sound a bit daft but you need to find one that you feel personally comfortable with, as you will be sharing a lot of personal info (not just financial) and making some joint decisions with them... 

No, doesn't sound daft at all.  Part of the reason I contacted a particular trader (Pembroke Asset Management, based in Bristol) is 'cos a friend has used their services for several years and when she described her experience, it sounded like the sort of setup I'd like.  And although I met with a different individual, working for the same company, it turned out that we have quite a lot in common and I felt like he was the sort of person I could do business with, as they say.  I think that must be a good start.
I'm beginning to appreciate that there are many variables when considering investment and what one wants to get out of it.   I'm beginning (at long last!) to gain an understanding of what exactly it is that I want from my investment strategy - for example, I want someone to do all the admin. and decision-making for me - I want as little to do with the process as poss. as it's just the sort of thing I'm not good at, requiring clarity of thought, decision-making and attention-to-detail.  I understand of course that I'll have to pay for that and I'm prepared to do so.
I've spent the afternoon reading and reading and reading and now have a stiff neck!

Daliah

They make DFM sound like some sort of an investor's paradise. To me, that sounds just Marketing hyperbole. 

Happy to get edified by some more knowledgeable forumites if I am reading this incorrectly.

wjr4

Daliah said:

They make DFM sound like some sort of an investor's paradise. To me, that sounds just Marketing hyperbole. 

Happy to get edified by some more knowledgeable forumites if I am reading this incorrectly.

Looks like a very old school website, loads of IFAs offer DFM nowadays. 

BritishInvestor

wjr4 said:

Daliah said:

They make DFM sound like some sort of an investor's paradise. To me, that sounds just Marketing hyperbole. 

Happy to get edified by some more knowledgeable forumites if I am reading this incorrectly.

Looks like a very old school website, loads of IFAs offer DFM nowadays. 

Yep, they have an interesting take on financial planning.

https://www.mbfps.com/financialplanning.html

bostonerimus

Most fund houses will give you a perfectly ok range of funds that will allow you to build an appropriate portfolio. You won't be able to buy the boutique media darlings like Fundsmith or at one time Woodford funds, but you don't need them to be successful. The biggest thing you need to determine is what you'll be charged for the advice and the quality of that advice.

Avoirdupois

Have spent the Xmas hols reading as much as I can about investement - what a lot there is to it!!  I have a Q about security.  Say I go with the asset manager referred to upthread.  As I understand it, he will buy various stocks and shares, via Standard Life's Wrap platform (now branded as 'abdrn'), as he sees fit in order to get as close as poss. to our agreed goals. In return I pay him an ongoing fee of 0.5% twice yearly.  I get that.  But what I don't get is how secure my money is.  I understand that the value of shares can go up as well as down - and we've talked about my personal attitude to risk, which I assume he will take into account when deciding what to sell and buy.  But what happens if abdrn get into difficulties - and what happens if the asset management company gets into difficulties - how safe are my investments?  Would I have been wiser to spread my assets across a number of asset managers / a number of platforms?

dunstonh

 Say I go with the asset manager referred to upthread.  As I understand it, he will buy various stocks and shares, via Standard Life's Wrap platform (now branded as 'abdrn'), as he sees fit in order to get as close as poss. to our agreed goals.

The adviser selects the funds but a wealth manager would leave all the investment selections to a discretionary fund manager or third party.   The DFM/third party buys the funds (some may buy some direct holdings like shares as well).  The funds are the things that buy the shares.

From what you are saying, the adviser is passing the investment decisions to the DFM/wealth management side.

In return I pay him an ongoing fee of 0.5% twice yearly.  

That is the adviser you are paying.  Not the investment side. They have their own charges.  The adviser has nothing to do with the underlying investments. 

 But what I don't get is how secure my money is.<snip> and what happens if the asset management company gets into difficulties - how safe are my investments?

Its unusual for mainstream funds to get into difficulty.     The funds themselves have varying levels of liquidity and a liquid fund would not cause any issues as the underlying shares can be sold or transferred.    It is illiquid funds that can have difficulties and if you look at the small number of failures over the decades, it is the illiquid funds that have been the problem.    So, you avoid illiquid funds.

Would I have been wiser to spread my assets across a number of asset managers / a number of platforms?

Spreading platforms doesn't matter much as adviser platforms tend to be larger, more financially secure and profitable.    However, spreading fund houses can make a difference as you get £85k FSCS protection per fund house.   If you have put it all on one fund manager then you are getting just £85k protection at their level.

The explanation of the different levels of FSCS protection is long and complicated and depends on the assets you use.   For example, Investment Trusts and ETFs do not get FSCS protection.  Whereas OEICs and UTs do.    Life and pension funds get more protection still.   Shares get no FSCS protection.   Then you have adviser level protection and platform level protection.   

Audaxer

dunstonh said:

The explanation of the different levels of FSCS protection is long and complicated and depends on the assets you use.   For example, Investment Trusts and ETFs do not get FSCS protection.  Whereas OEICs and UTs do.    Life and pension funds get more protection still.   Shares get no FSCS protection.   Then you have adviser level protection and platform level protection.   

I was concerned at first about Investment Trusts having no FSCS protection, but I was convinced by previous posts on this site, that the risk of loss is miniscule in that there was only likely to an issue if there was a major fraud in the company. Am I still right in thinking that with the long-standing mainstream Investment Trusts that risk is minimal?