How do you find a trustworthy IFA?

[Deleted User]

lisyloo said:

we have good jobs and are intelligent people but i don’t think we could replace our accountants, ifa etc. they’ve given us good advice.

We have an accountant.  You can’t compare:

- An accountant I use (as opposed to bookkeeper) is a highly qualified specialist with a university degree who has to graduate from a competitive program.   He then requires further experience and and an exam to get his letters.  

- An IFA requires to pass tests following a part time 7 months course, a large chunk of which is focused on selling skills. https://www.simplyacademy.com/our-courses/dipfa/#:~:text=The%20DipFA%20is%20a%20level,offer%20advice%20on%20retail%20investments.
- I have an accountant because my tax affairs are complex with a few registered businesses and different issues come up all the time. 

- An average person’s pension investment selection is a boring, routine affair.  Once initial investment is made and up until its time to withdraw, the less you mess with investments the better for your returns.  

- I pay my accountant per hour up to a quoted limit.  I would never agree to a deal whereas he would be paid while he sleeps.  Nor would I even talk to an accountant who would try this trick. 

- What I pay my accountant is 5 times less than 0.5% of my portfolio would have cost annually.  Not to mention loss of future return on that charge.

One off advice from a specialist on a specific issue is one thing.  Getting hooked into paying a 7-months part-time course graduate while he sleeps for something that is best if its simple… Thats different. 

You need free state pension advice?  Delay as much as you can.  There. Done. I expect your money to start dripping into my account monthly in perpetuity from now on. Thats your definition of “free advice”, apparently. 

lisyloo

“You need free state pension advice?  Delay as much as you can.  There. Done. I expect your money to start dripping into my account monthly in perpetuity from now on. Thats your definition of “free advice”, apparently. ”

you didnt ask me about my circs and I don’t expect to live long so delaying is bad advice.
you just proven why free advice is bad.
you didn’t do a fact find first.

you keep comparing the advice of an entire company of professionals (I get input from multiple depts) with someone who’s read a few books.
its not comparing like with like at all.

[Deleted User]

lisyloo said:

“You need free state pension advice?  Delay as much as you can.  There. Done. I expect your money to start dripping into my account monthly in perpetuity from now on. Thats your definition of “free advice”, apparently. ”

you didnt ask me about my circs and I don’t expect to live long so delaying is bad advice.
you just proven why free advice is bad.
you didn’t do a fact find first.

you keep comparing the advice of an entire company of professionals (I get input from multiple depts) with someone who’s read a few books.
its not comparing like with like at all.

Just so that I understand… You have a terminal illness (sorry; will happen to all of us eventually…) and you needed advice that taking state pension early makes financial sense?  

You can buy books which are effectively manuals written by the best experts in the world. If multiple departments make you feel better so be it. 

boomboomboom

Bit of an update from me, which is quite boring and long-winded but I wanted to thank everyone that replied and on the off chance there is someone that finds this thread provide something half useful so they can sort their money out like I did.

I ended up speaking to a fourth and final IFA that was referred from a friend.

Remember, I was driven by the fact that IFAs up until this point appeared to over-complicate things. Which sent me into a mode of "right, this can't be that difficult, I am going to bloody sort it out myself!!"

They reviewed what I had done and essentially came to the conclusion that I didn't need any help.

Obviously in this instance not receiving (or not needing) any advice was ironically great advice

They concluded that everything I was doing was the ideal thing for me in my situation. My research had paid off. They even asked me "how did you choose these funds and this plan" - It felt pretty good tbh. Smug as ;-)

Here is a summary of what I ended up doing...

• All I had done is gone through my outgoings and trimmed off what I could - MSE style (calling insurers, etc, etc)
• Then after generating more spare cash (just by cutting bills and being smarter with money) I turned saving into my new hobby.
• I've now trippled my pension contributions.
• I save into ISAs for me and all my family members.
• I learned about ETFs and Indexes.
• I learned what Morningstar was.
• I started to understand risk vs. volitility.
• I loved the idea of compounding.
• I figured out that it's never too late to fix things.
• I wished I'd been taught as a kid what investing and pensions were.
• I still think IFAs have a way to go to fix their industry (I went through three and the experience was not ideal, luckily I didn't commit to anything and technically they did nothing illegal, but the law often doesn't lesgilate against companies making a profit at the detriment of someone's savings - it can always be justified)
• So I am now doing the best with the money we earn that I can.
• And I feel great knowing my kids understand what investing is, what pensions are, and what financial freedom needs.
• Knowing I am ensuring they start of on the right foot is a big comfort.
• I am pleased my kids school teach finance, and my eldest was even able to answer his teachers question about finances being the only kid in the class with a pension!
• It's amazing what happens when you start to be smart about money, it even caused my parents to want to put money towards their grandchildrens future.

To anyone reading this that is considering reviewing their finances, my advice would be to educate yourself first. Create a plan. And then go to an IFA with this plan. So at least any advice you get has your plan as a blueprint. And where you have gone wrong you will learn. And where you got it right, you can feel pretty great about it. What this means in real terms, for me was...

• Fix your finances (as above)
• Figure out who you'd want to invest in (do some reading about different platforms and brokers)
• What YouTube about investing.
• Read stuff, as Google questions, make notes about what you find out.
• Use the free online calculators, call the government help lines.
• You'll have days where you hate it and want to throw the towel in.
• But keep going, eventually it'll start to make sense.
• And you'll soon have an opinion.
• Keep educating yourself.
• This whole process has taken me 6 months. 3 months to begin to invest and 6 months to finally be able to sit back and understand where my money is now and in the future.

To any IFAs reading this wanting to know what my impression of the three IFAs I met was, the disapointment I found was that the IFA's love is first for money and second for people.

I was left with the opinion that as much as money is the topic, IFAs must be to have a disire to help people.

Martin Lewis is a great example of this.

I am sure they are out there, but I got unlucky and found three that weren't ideal.

Part of their behaviour I felt was that perhaps because I didn't have millions for them to earn off they were less inclined to help or in one case suggested I pay them what I had saved as a lump some catch all to make it worth their while. Which I get. We are all working to earn money.

And of course this is all down to just my experience. Like any profession, you'll find good and bad.

cfw1994

Great to read that update - thanks for returning!

I do think if you have an interest in almost any topic (finance, caligraphy, bike maintenance, furniture restoration - whatever!), the tools are all available these days to become very competent at that topic. 
Nothing is ever a 100% perfect solution, particular with investing, but having a plan, actively following it, and even tweaking it from time to time as needed should be decent - never let perfect get in the way of good enough 👍

Being in a position to help educate offspring (or indeed friends - I ran an hour-long zoom on work pension stuff to a bunch of colleagues before I stepped away!) is also a GoodThing™ - education helps in so many areas of life!   My parents rarely, if ever, talked about finances - we have always been very open with our offspring, and one consequence is that they understand LISA/ISA/pension/GIA, and will now ask for our views & help on things.

Well done!

Ibrahim5

IFAs are all about putting their own needs first. If they can make money out of you (normally by the ongoing fees scam) then they are interested. That's how their industry works. They are there to get rich quick with the minimum of effort. It would take a long time to turn it into a profession.

Ibrahim5

Well done boomboomboom. You have shown how with a bit of nouse, confidence and dedication you can sort out your own finances. It's much better and more successful than leaving it to someone else who is only interested in keeping you as a customer and taking their cut every year.

Albermarle

To anyone reading this that is considering reviewing their finances, my advice would be to educate yourself first. Create a plan. And then go to an IFA with this plan. So at least any advice you get has your plan as a blueprint. And where you have gone wrong you will learn. And where you got it right, you can feel pretty great about it. What this means in real terms, for me was...

Well done for sorting it out yourself. Maybe you can become a regular contributor to the forum and help others take their first steps to financial knowledge?

Of course not everybody has the intelligence/numeracy/ interest in the subject. Just the same as I have pretty much zero interest in learning how to service my own car, so I pay someone to do it.

Martin Lewis is a great example of this.

He is not so good in this field. The main part of this site generally shies away from any investment advice, due to presumably fear of being accused of making recommendations that go wrong.

He has done some pension TV programmes recently. It definitely raised awareness. but a lot of the more detailed stuff was quite badly flawed/inaccurate.

BritishInvestor

boomboomboom said:

To any IFAs reading this wanting to know what my impression of the three IFAs I met was, the disapointment I found was that the IFA's love is first for money and second for people.

For anyone trying to find an IFA going forward, and looking for a genuine financial planner rather than an old school adviser that picks funds and "manages your money", I would consider finding out if they:

1. Hold the CFP?
https://www.cisi.org/cisiweb2/cisi-website/study-with-us/financial-planning/why-study-financial-planning

2. Belong to NextGen?

https://www.nextgenplanners.co.uk/

3. Belong to IFW?

https://initiativeforfinancialwellbeing.org.uk/who-are-we/

BritishInvestor

Ibrahim5 said:

 It would take a long time to turn it into a profession.

In what way?