IFA or DIY

JohnWinder

I’d say diy is an option for you, so as a suggestion on ‘how to get started’ you could read Tim Hales’ book Smarter Investing. It covers a narrow aspect of financial planning, omitting how to manage your debts, be a good saver, manage a household budget, choose appropriate insurance, tax and estate planning etc, but it does investing for UK readers very well. It’s not about picking this stock or that, it’s about understanding the investing landscape and how individuals of average capacity can manage their investments as well as the professionals can. And it tells you in concrete, actionable terms.

That book alone would probably give you the confidence to feel that with a bit more reading, understanding and planning, you could be your own financial planner in 6 months to a years time.

Plenty have done it and wouldn’t want to have it any other way.

Even if you choose in favour of an advisor, you owe it to yourself to understand what they’re doing if your locus of control is in any way internal, because they might be saying the can ‘prevent (your) mistakes’ but you want to be able to help them from making their mistakes (with your money). Good luck.

oversight of efficiencies and liabilities

Just out of interest, are there any liabilities you’ve failed to oversee properly in the last 40 years?

_pete_

BadgerTwin said:

We don’t have the skills or knowledge to portfolio build but will look into multi-asset funds. At this stage we are trying to ascertain the value of signing up with an IFA versus the potential upside/risks of creating and implementing a strategy ourselves. We have the appetite to learn and invest ourselves but don’t want to get paralysed/inert, do nothing, etc, because of complexity/risk of mistakes. 

It seems like the easiest course of action is to hand everything over to the expert but we are more DIY and don’t want to feel everything is out out of our reach for uncertain returns. Just trying to determine the wisest course of action and wondering if there is a way to combine expert paid-for advice/planning tailored to our situation with investing via a lower-cost platform on a more gradual basis as we get clued up.  Any tips on first steps appreciated. Thanks again for your responses. 

I had a similar dilemma about 5 years ago, albeit with simpler financial affairs. 

The best thing I did was undertake a lot of research (read a couple of books, scoured the internet) until I was clear exactly what I wanted from an IFA.  I then rang a few, explained my requirements over the phone and asked for an idea of their fees for this piece of work.

To be specific - I wanted someone to set me up with a SIPP comprising a range of index funds that I could manage myself going forward. I was explicit that I wanted a fixed fee for the work with not ongoing servicing but if I decided down the line I wanted more advice I would come back to them and request another fixed-fee service.

The initial exploratory phone calls were illuminating.  Some weren't interested.  Some wanted to convince me that they would be monitoring my investments on a weekly basis(!).  One understood what I was getting at, and did the work for £800.

It's worked out very well for me.

TLDR: Do loads of research so that when you are ready for an exploratory chat with an IFA you have a clear sense of specifically what you might want.

JohnWinder

That reads like the way of the future, or at least a way. The assets under management fee approach is imperfect enough that we need to be pushing for different models, even suggesting them. 

Albermarle

The initial exploratory phone calls were illuminating.  Some weren't interested.  Some wanted to convince me that they would be monitoring my investments on a weekly basis(!).  One understood what I was getting at, and did the work for £800

Like in any business there is a supply and demand factor in play.

Many IFA's will have a full ( ish ) book of clients, so can cherry pick the customers they want. 

For the limited kind of work you needed, a good  IFA might feel a bit wasted on that, and nowadays you would probably be looking at  just going to Vanguard etc as mentioned earlier, or some other stripped down service. Especially if you only wanted to spend £1000 or so.