Which Platform? .... and which BOOK for beginner? PLEASE

datadezign

dunstonh said:

 should the IFA be compiling the portfolio for us, and select which funds are most suitable, such as a combination of equities and bonds to sit within that portfolio? 

Both is the simple answer but not a helpful one.

IFAs that work on an advisory basis will build a portfolio based on the research, due diligence and actuarial data that they buy in.  The IFA picks the platforms and funds to fit the recommended strategy.
IFAs that work with a discretionary fund manager (DFM) outsource investment selection to the DFM.   The DFM picks the funds, and the IFA picks the platform.  The IFA would select the DFM portfolio on the platform and any changes made by the DFM automatically get applied to the portfolio without the IFA doing a thing.

DFMs add a layer of cost.   Firms that work this way often add "wealth management" to their name or tagline, but that is not a 100% rule.  You also generally find that FAs most commonly use this model but there are IFAs that work this way and it is dubious to whether they should still be referring to themselves as IFAs and not FAs.     The reason is that most that work this way only use one investment platform and put everyone on the same DFM.  So, it is questionable whether they are really IFAs.  Indeed, many firms that have had FCA visits were told to drop their IFA status to FA and compliance companies also generally issue warning to firms to do that if they operate that model.

DFMs have their place but I consider it is a niche option.  That said, some IFAs reduce their charges if a DFM is used to reflect the lower level of work required by the IFA.  That is reasonable as the use of a DFM reduces the workload of an IFA.   So, why should you the cost of the DFM.     However, most advisers that use a DFM do not discount the adviser charge and the consumer ends up paying for that extra cost.

Would the IFA then split the funds from that portfolio to invest using two or more platforms, or does the IFA deal direct with a fund management team and not a platform?

There is rarely any reason to use multiple platforms nowadays.  Most platforms lower their charges, the more you have on them.  Most platforms are whole of market.    And when you are using multiple wrappers, you really want the functionality to move funds between them without needing to pay the money back to the investor and then get the investor to pay it back to the other platform.

IFAs deal with platforms directly and have contact points with the fund houses.

Sorry a little confused, you mentioned in one of your previous replies:

QUOTE IFAs shouldn't be using a specific platform. They should choose from the marketplace.  FAs use specific platforms (or products in the case of some of the ones you listed).

and 

QUOTE There is rarely any reason to use multiple platforms nowadays.

So understand that, however if then the issue is:-

1: As you have said the IFA shouldn’t be using a specific platform …. otherwise they may not be using whole of market and therefore the FCA could Insist they need to change to an FA.

2: and as said … There are rarely any reason to use multiple platforms 

3: and with issue with Tax wrappers.

So based on the above, should I assume then that a TRUE IFA, should show us a personalised portfolio of funds that they have either hand selected or combined using a DFM, and not on a pre printed glossy platform document?

Once this has been done they will then use this ‘tailored portfolio’ on a specific platform, and not on several, for ease of managing the various tax wrappers? 

Of course by only using one platform it would be very difficult to know if their have any know affiliation with that Platform and therefore a grey area that the FCA would find had to police?

How should I expect to see their proposal and how detailed can I expect this to be? I have received one other so far from an FA, but is a very glossy looking document, which doesn’t look personalised to me, and as such doubt this is personalised to us?

Albermarle

Of course by only using one platform it would be very difficult to know if their have any know affiliation with that Platform and therefore a grey area that the FCA would find had to police?

As mentioned in previous posts, the platform itself is the least important part of the process. Whether an IFA prefers to put their clients on platform A or B , is not really of major concern for the client, as long as platform cost is competitive.

Some of the platforms have more up to date software/website/functionality and the IFA maybe be familiar with any quirks/advantages/reporting functions with some platforms more than others.

How should I expect to see their proposal and how detailed can I expect this to be? I have received one other so far from an FA, but is a very glossy looking document, which doesn’t look personalised to me, and as such doubt this is personalised to us?

Not sure about how a proposal should look, but I would guess that a limited number of investment portfolios would probably cover 95% of client needs. Remember suggesting an investment portfolio is only one reason to engage an IFA. The personalised part will be more around explaining how it all works, discussing your risk tolerance and objectives, tax planning, inheritance, whole family finances etc 

datadezign

How should I expect to see their proposal and how detailed can I expect this to be? I have received one other so far from an FA, but is a very glossy looking document, which doesn’t look personalised to me, and as such doubt this is personalised to us?

Not sure about how a proposal should look, but I would guess that a limited number of investment portfolios would probably cover 95% of client needs. Remember suggesting an investment portfolio is only one reason to engage an IFA. The personalised part will be more around explaining how it all works, discussing your risk tolerance and objectives, tax planning, inheritance, whole family finances etc 

Sorry didn't explain correctly: How should it actually look on paper, how detailed should the information be?

Linton

datadezign said:

How should I expect to see their proposal and how detailed can I expect this to be? I have received one other so far from an FA, but is a very glossy looking document, which doesn’t look personalised to me, and as such doubt this is personalised to us?

Not sure about how a proposal should look, but I would guess that a limited number of investment portfolios would probably cover 95% of client needs. Remember suggesting an investment portfolio is only one reason to engage an IFA. The personalised part will be more around explaining how it all works, discussing your risk tolerance and objectives, tax planning, inheritance, whole family finances etc 

Sorry didn't explain correctly: How should it actually look on paper, how detailed should the information be?

The IFA report I received (actually regarding a Lifetime mortgage but would be much the same for investments) was printed on a normal office printer. It is about 12 pages long.  In it my circumstances and what I wanted to achieve are described in detail.  It then lists what options were considered and the product the advisor was proposing with the reasons why referencing my circumstances and objectives.  It finishes with appendices describing the role of the regulatory bodies involved and the company from whom the product would be purchased

No glossies, no sales blurb, just lots of facts and specific recommendations.

dunstonh

Sorry a little confused, you mentioned in one of your previous replies:


QUOTE IFAs shouldn't be using a specific platform. They should choose from the marketplace.  FAs use specific platforms (or products in the case of some of the ones you listed).

and 

QUOTE There is rarely any reason to use multiple platforms nowadays.

So understand that, however if then the issue is:-

1: As you have said the IFA shouldn’t be using a specific platform …. otherwise they may not be using whole of market and therefore the FCA could Insist they need to change to an FA.

2: and as said … There are rarely any reason to use multiple platforms 

3: and with issue with Tax wrappers.

So based on the above, should I assume then that a TRUE IFA, should show us a personalised portfolio of funds that they have either hand selected or combined using a DFM, and not on a pre printed glossy platform document?

By specific platform, I mean a single platform used by the advice firm for every single person.
There is no reason for an individual to use multiple platforms.
i.e. client A may go on platform 1 and client B may go on platform 2.   However, there is no need for an individual to split their money between 1 & 2.

All advisers, regardless of status, should provide you with details of the investments and the charges.   However, you typically get this further in the advice process and not during initial enquiries.      I would be on guard if you get a pre-printed glossy document from the platform because most IFAs work out of small localised offices where virtually all of their documentation is printed on the office laser printer.    You would expect any printed material to be laser printer quality, not professional print quality.   

Whereas FAs, wealth managers and salesforces get their material printed professionally as they have so few products and funds available and everyone that uses them goes into the same option.

So, if you are getting professional printed glossy material then are you really seeing an IFA or a sales rep, FA/Wealth manager?

Once this has been done they will then use this ‘tailored portfolio’ on a specific platform, and not on several, for ease of managing the various tax wrappers? 

For an IFA, it should be that they will use their recommended portfolio on a platform that suits you.  

Of course by only using one platform it would be very difficult to know if their have any know affiliation with that Platform and therefore a grey area that the FCA would find had to police?

IFAs have no affiliation with any platform.   FAs will nearly always have an affiliation with a platform/provider.    The whole point of an IFA is that they are independent. 

How should I expect to see their proposal and how detailed can I expect this to be? I have received one other so far from an FA, but is a very glossy looking document, which doesn’t look personalised to me, and as such doubt this is personalised to us?

You will not get a personalised report until you agree to proceed with an adviser or pay them for the work carried out.    In the early days, you may get a series of generic documents that do not give too much away.

The key report is issued when you agree to engage that adviser.  You won't get it for free.  The level of detail will depend on what objectives and tax wrappers are involved.   I just finished one in the last hour that was 28 pages that was about income drawdown.  The bulk of it is about the plan and modelling and progress with only a handful of pages on the investments.  It is highly personalised.       A simple case with relatively small values could be on about 7 pages but would be personalised.

I suspect so far, you are not getting anywhere near that stage and are you getting basic generic material.

datadezign

Thank you Linton, that’s exactly what I wish to see. A glossy pre brochure in my opinion doesn’t really demonstrate any input by the advisor. Although there’s probably no proof of that if on normal printed paper, except with one big difference, it is more likely that the information has been tailored to our needs.

eskbanker

datadezign said:

So far we have had several meetings with both FA's and IFA's, and direct with Barclays, and the JV between Lloyds and Schroders. Various platforms have been suggested, such as Vanguard, Aviva, SJP amongst others

SJP are renowned for glossy brochures, but, as above, if you're shopping around various companies without committing to them then you'll only be getting generic information rather than something tailored to your own circumstances, which will only emerge after you've crossed your chosen provider's palms with silver....

Linton

datadezign said:

Thank you Linton, that’s exactly what I wish to see. A glossy pre brochure in my opinion doesn’t really demonstrate any input by the advisor. Although there’s probably no proof of that if on normal printed paper, except with one big difference, it is more likely that the information has been tailored to our needs.

AS Dunstonh points out the report I described is what you pay the IFA to do.  No-one is going to undertake for free the significant amount of work involved to produce such a report for which they are legally liable.  Actually setting up the investments is very much an admin job.

datadezign

Thank you everyone again for your very kind advice. 

‘Glossy brochures I dislike and is corporate and typical of what I have seen so far as said from an FA tied to one specific platform.

I realise the the proposal report asked for will be slightly limited due to the admin time taken to do this, without any guarantee of engagement,
and of course payment. 

I have already asked some IFA’s for a report / proposal, that shows a reasonably comprehensive report and produced on printed paper, not a glossy brochure, which so far has been agreed.

I do not intend to waste anyones time, but it is very important for us to have sufficient information, including most importantly a transparent fee structure to make an informed decision as to who we use.

I hope that makes sense, and my understanding of the kind advice given by everyone so far is reasonably correct?

datadezign

I appreciate that experience can often count for more than qualifications, although qualifications I suppose should be part of my IFA selection process and recommendation.

What should their minimum qualifications be, and ideally be?