iFA qualifications for retirement advice

BritishInvestor

bostonerimus said:

BritishInvestor said:

bostonerimus said:

My feeling is that an IFA can provide a plan for the unknowledgeable and useful validation for people who have done a bit of their own research, but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts. I have a friend back in the UK who has a USS pension an ISA and a mortgage. She is in her early 40s and has a good emergency cash account and the rest she puts into global equity funds and extra mortgage payments. She plans to move into the USS default target retirement fund in her 50s. She has a simple plan and is sticking to it.

What sample set of people did you use to determine this?

"but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts"

The "entirely off the top of my head" sampling method with a bit of my personal experience and that of my friends, family and colleagues. Their financial lives are just not that complicated. I've also managed to keep my finances simple: understood my budget, spend less that I earn, bought a house, saved for retirement and in general accounts using simple index funds. I never felt the need for advice and I think most working people will be in a similar situation most of the time. However, I am going to take advice from a lawyer about my will and estate planning. Getting advice is sometimes very prudent and necessary, paying an annual retainer to an IFA isn't necessary IMO.

I think everyone would benefit from a financial planner (myself included) to act as a sounding board and avoid making suboptimal decisions.

Whether it makes sense for them to do so given the costs involved is another matter.

The vast majority of the population lack the time, knowledge or interest to make the correct financial decisions, unfortunately (IMO). Not sure how to fix that one.

zagfles

BritishInvestor said:

bostonerimus said:

BritishInvestor said:

bostonerimus said:

My feeling is that an IFA can provide a plan for the unknowledgeable and useful validation for people who have done a bit of their own research, but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts. I have a friend back in the UK who has a USS pension an ISA and a mortgage. She is in her early 40s and has a good emergency cash account and the rest she puts into global equity funds and extra mortgage payments. She plans to move into the USS default target retirement fund in her 50s. She has a simple plan and is sticking to it.

What sample set of people did you use to determine this?

"but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts"

The "entirely off the top of my head" sampling method with a bit of my personal experience and that of my friends, family and colleagues. Their financial lives are just not that complicated. I've also managed to keep my finances simple: understood my budget, spend less that I earn, bought a house, saved for retirement and in general accounts using simple index funds. I never felt the need for advice and I think most working people will be in a similar situation most of the time. However, I am going to take advice from a lawyer about my will and estate planning. Getting advice is sometimes very prudent and necessary, paying an annual retainer to an IFA isn't necessary IMO.

I think everyone would benefit from a financial planner (myself included) to act as a sounding board and avoid making suboptimal decisions.

Whether it makes sense for them to do so given the costs involved is another matter.

The vast majority of the population lack the time, knowledge or interest to make the correct financial decisions, unfortunately (IMO). Not sure how to fix that one.

Most probably don't need individually tailored advice any more than they need individually tailored clothes. Stuff like workplace pension defaults/range of defaults for difference attitide to risk, retirement age and retirement intention are likely to be fine for most. Those with more complex affairs can use boards like this as a "sounding board" and get opinions from a wide range of experienced investors for free, rather than rely on a single IFA or "financial planner" who will take a significant cut of their pension.

DT2001

Ibrahim5 said:

Ongoing fees is the new scam that has taken over from commission. It's a bit like income tax. If the government paid you £120k and then asked for a £30k income tax cheque you would be furious about the cost of income tax. IFAs take their fees out of the investments so people don't really notice the cost. People should be made to write a cheque out for IFA fees.

With every (?) platform you are advised at least annually about fees.

If you pay your fees from your pension they are paid from gross income but you are suggesting they should be paid from net - not a good MSE trait

Ibrahim5

My dentist knows me and my teeth. Every year I see him for a check up which is £50. If you see an IFA for an annual check on your investments it shouldn't cost any more. The government should remove any tax incentives.

QrizB

I'ver just made my first use of the "ignore" function.

Ibrahim5

So I can write anything about you and you won't know.

BritishInvestor

zagfles said:

BritishInvestor said:

bostonerimus said:

BritishInvestor said:

bostonerimus said:

My feeling is that an IFA can provide a plan for the unknowledgeable and useful validation for people who have done a bit of their own research, but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts. I have a friend back in the UK who has a USS pension an ISA and a mortgage. She is in her early 40s and has a good emergency cash account and the rest she puts into global equity funds and extra mortgage payments. She plans to move into the USS default target retirement fund in her 50s. She has a simple plan and is sticking to it.

What sample set of people did you use to determine this?

"but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts"

The "entirely off the top of my head" sampling method with a bit of my personal experience and that of my friends, family and colleagues. Their financial lives are just not that complicated. I've also managed to keep my finances simple: understood my budget, spend less that I earn, bought a house, saved for retirement and in general accounts using simple index funds. I never felt the need for advice and I think most working people will be in a similar situation most of the time. However, I am going to take advice from a lawyer about my will and estate planning. Getting advice is sometimes very prudent and necessary, paying an annual retainer to an IFA isn't necessary IMO.

I think everyone would benefit from a financial planner (myself included) to act as a sounding board and avoid making suboptimal decisions.

Whether it makes sense for them to do so given the costs involved is another matter.

The vast majority of the population lack the time, knowledge or interest to make the correct financial decisions, unfortunately (IMO). Not sure how to fix that one.

Most probably don't need individually tailored advice any more than they need individually tailored clothes. Stuff like workplace pension defaults/range of defaults for difference attitide to risk, retirement age and retirement intention are likely to be fine for most. Those with more complex affairs can use boards like this as a "sounding board" and get opinions from a wide range of experienced investors for free, rather than rely on a single IFA or "financial planner" who will take a significant cut of their pension.

I was discussing planning, not advice. 

Your post seems to be referring to advice and financial products. 

DT2001

Ibrahim5 said:

My dentist knows me and my teeth. Every year I see him for a check up which is £50. If you see an IFA for an annual check on your investments it shouldn't cost any more. The government should remove any tax incentives.

The point you were making is that people don’t know about the charges. I’m saying it is clear as you are advised each and every year by a third party (the platform).

Are you advocating increasing their fees by removing the ability to ability to pay from your pension fund? If so all fund fees will be treated likewise to the detriment of all irrespective of whether having an IFA or not?

Ibrahim5

I don't get tax relief when I pay my dentist. Why should I to pay an IFA? The fees should be paid direct from customer to IFA. Some would have to get a bank loan to pay the fees of course.

zagfles

BritishInvestor said:

zagfles said:

BritishInvestor said:

bostonerimus said:

BritishInvestor said:

bostonerimus said:

My feeling is that an IFA can provide a plan for the unknowledgeable and useful validation for people who have done a bit of their own research, but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts. I have a friend back in the UK who has a USS pension an ISA and a mortgage. She is in her early 40s and has a good emergency cash account and the rest she puts into global equity funds and extra mortgage payments. She plans to move into the USS default target retirement fund in her 50s. She has a simple plan and is sticking to it.

What sample set of people did you use to determine this?

"but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts"

The "entirely off the top of my head" sampling method with a bit of my personal experience and that of my friends, family and colleagues. Their financial lives are just not that complicated. I've also managed to keep my finances simple: understood my budget, spend less that I earn, bought a house, saved for retirement and in general accounts using simple index funds. I never felt the need for advice and I think most working people will be in a similar situation most of the time. However, I am going to take advice from a lawyer about my will and estate planning. Getting advice is sometimes very prudent and necessary, paying an annual retainer to an IFA isn't necessary IMO.

I think everyone would benefit from a financial planner (myself included) to act as a sounding board and avoid making suboptimal decisions.

Whether it makes sense for them to do so given the costs involved is another matter.

The vast majority of the population lack the time, knowledge or interest to make the correct financial decisions, unfortunately (IMO). Not sure how to fix that one.

Most probably don't need individually tailored advice any more than they need individually tailored clothes. Stuff like workplace pension defaults/range of defaults for difference attitide to risk, retirement age and retirement intention are likely to be fine for most. Those with more complex affairs can use boards like this as a "sounding board" and get opinions from a wide range of experienced investors for free, rather than rely on a single IFA or "financial planner" who will take a significant cut of their pension.

I was discussing planning, not advice. 

Your post seems to be referring to advice and financial products. 

No, more about planning, not products or advice. Workplace pension scheme options, investment pathways in drawdown etc, fall more into planning, since they tend to select from a very small range of products, certainly not from the whole of the market, something an IFA would do. And no advice is provided, except for a free session around the time of retirement. My workplace pension only has about 20 funds even for those who want to choose their funds rather than use the default options. But the products are good, low charge products with a sensible range of "plans" based on stuff like intended retirement age, attitude to risk, and intention in retirement (eg drawdown/annuity).