End relationship with IFA?

DadAlone

I have been pondering for a while whether to end my dealings with an IFA that I first engaged in 2016.

He currently manages a SIPP worth around £580K, an inherited SIPP now in drawdown worth around £240K and a S & S Isa worth around £55K. He charges me 0.50% and on top are Platform charges (Aegon) of 0.15% and of course fund charges for the individual funds selected.

First the positives - I learned a lot about tax efficiencies as regards pension contributions so he certainly helped me to save money there. He also does discuss with me when we meet other aspects of planning around planning for my kids etc. So, it's not all bad.

The negatives - maybe I have unrealistic expectations but I would have thought that engaging an IFA who is earning the best part of £400 every month (at peak fund values) should buy a more proactive service than I feel I get? When we meet (the last time was just over a year ago), he usually has some suggestions to switch some funds as one or two may have fallen out of his favour due to change in fund manager or performance concerns etc. Why does he wait until we meet? I would rather get an email at the point he has changed his view and I am left wondering how long I have been sitting in a fund he no longer recommends! Also, with the scale of world events that have occurred in the last period of time it would be nice if there was even an email now and again saying not to worry or contact me if you have any concern. The silence is deafening!

Do any of the IFA's on here have any view or comment on this? I would be very interested in your views!

eskbanker

DadAlone said:

When we meet (the last time was just over a year ago), he usually has some suggestions to switch some funds as one or two may have fallen out of his favour due to change in fund manager or performance concerns etc. Why does he wait until we meet? I would rather get an email at the point he has changed his view and I am left wondering how long I have been sitting in a fund he no longer recommends!

What does he say when you put that question to him?

DadAlone said:

Also, with the scale of world events that have occurred in the last period of time it would be nice if there was even an email now and again saying not to worry or contact me if you have any concern. The silence is deafening!

Have you tried contacting him when you're concerned or are you waiting for an invitation to do so?  If you feel that world events are unusual and worthy of discussion then he may be able to put your mind at rest, but I guess the underlying issues here are trust and value for money?

DadAlone

Hi.

Your last phrase hits the mark I guess.

I haven't put this to him, at least not in bald terms as yet. I guess that day is coming though.

My main point is shouldn't the substantial fees I pay provide a more proactive service than I feel I am getting? What would be considered best practise for IFA's in terms of:-

• Appropriate timescale for communicating a recommendation to change funds from the point the IFA doesn't like that fund anymore?
• Proactive comms with client at times of market turmoil?

I'm just trying to get a feel for what the 'norm' is?

dunstonh

 I would have thought that engaging an IFA who is earning the best part of £400 every month (at peak fund values) should buy a more proactive service than I feel I get?

How proactive do you want it to be and what do you mean by proactive?

 When we meet (the last time was just over a year ago), he usually has some suggestions to switch some funds as one or two may have fallen out of his favour due to change in fund manager or performance concerns etc. Why does he wait until we meet?

I can only speak for myself, but I know others follow a similar way.   Sometimes the adviser firm will decide to stop using fund A in favour of fund B.   If it's an urgent change then you will contact the client immediately and do it then.  If it's not an urgent change then you will leave it until the next review.

We have monthly governance reports and occasional ad-hoc ones that cannot wait until month end.   None of which are supplied to the client but form part of the ongoing due diligence.  It is work going on behind the scenes, but if one of those reports impacted a client and needed immediate action, you would not wait until the next review.

Also, with the scale of world events that have occurred in the last period of time it would be nice if there was even an email now and again saying not to worry or contact me if you have any concern. The silence is deafening!

Communication is a two-way thing.     If the adviser doesn't know that you are concerned, then they will not be able to answer your concerns.         Most clients do not check the values often.   If they were getting frequent calls telling them not to worry, it would probably increase their worry.   if they do happen to get concerned, then they know they can contact the adviser.

We have weekly, monthly and quarterly market summaries, which we issue to those that ask for them.   We don't issue them to those that do not.    We tailor communications to the individual.  Some people like to read one after a particular market event but not the rest of the time.  So, they may just ask when they want it.  

The bottom line is that an adviser will typically tailor their service to what they believe the client is looking for.    Discuss it with the adviser if you are not getting what you want.