IFA - What Mistakes Are Acceptable, If Any?

dunstonh

GSP said:

Deleted_User said:

GSP said:

Deleted_User said:

GSP said:

Deleted_User said:

SpringermadMR said:

Our IFA of 3 years just sold out to a wealth management company, in the letter announcing this it made no mention of becoming restricted. Our new "IFA" on first contact with us, just sent a pack to sell our 32 + funds/investments to put them into two other funds and a new platform with a % increase hidden in the paperwork and also a change to restricted. So beware of IFA's selling their business, it certainly won't be in your best interests.

Its a fundamental problem for anyone considering using IFAs for ongoing portfolio management. 

I assume  that every time people are forced to switch, there are upfront costs as well as time and effort in selecting a new advisor, unnecessary investment changes, etc. 
 

That time could be better spent understanding how to get rid of advisors altogether so the risk of them selling you goes away altogether. Given simple and superbly diversified products available on the market nobody should be using a redundant management layer  between you and your money.  Not for day to day management. Suppose if you don’t know percentages  and can’t read then you don’t have much choice but in all other cases read a book and fire your advisor. 

I’d like to think I was okay with numbers, but the whole idea of investments and being responsible for them is very scary to me, and I don’t mind admitting about losing bottle.

At present I’m struggling finding a new IFA in my area (which I don’t want to disclose if okay). Whether google isn’t enough and there is a link to a site?

Just interested what you would do in the way of investments and setting up? How many would you choose and a strategy that hopes to live off drawdown to a ‘good age’ (currently c£750k joint funds).
Thanks

“ but the whole idea of investments and being responsible for them is very scary to me,”

Yes, but you are always the one living with consequences of investment decisions, good or bad.  No way around. The impact is always on your family, not the advisor’s. By passing the responsibility to an intermediary you are kidding yourself. Sorry for being the bearer of bad news. 

“ Just interested what you would do in the way of investments and setting up?”

I would invest my time in learning, understanding and developing conviction to make my own investment policy and then implement it. I don’t know enough about you and your circumstances. The advisor doesn’t either. Nobody does as well as you know yourself. 

My position is kinda similar. I have more investable assets but also a spouse so there are two of us. We have several DB income sources which will switch on at different times and ultimately plato  at around 40K GBP/yr (cpi linked but in different countries and currencies). My asset allocation is fixed at 70/30 stocks/bonds. Stocks are in passive index funds covering the world.  Fixed income is in bonds and cash. Bonds are more actively managed with a significant US allocation to benefit from strong USD during bear markets. Total cost is around 0.1% per annum (including platform, trading, and fees).  Once I hit 65 I will move a portion of investable assets into an annuity to make sure basic needs are covered until the end. The rest will be moved to a single multi-asset fund so that the spouse can manage without any difficulty if needs must. 

My portfolio was developed when some of the more modern products were not available. Something like VLS60 can answer most peoples’ needs in a single and simple product - if they are getting close to retirement. Younger people could go 100% stocks.

Each to their own, but I would still prefer to have a professional looking after my investments and don’t mind paying them £3-4k p.a. for doing so.

Reading your paragraph “My position is kinda similar….., that’s it, you have lost me right there. I think you may underestimate the knowledge you have on this.

Just do me a favour and read this book. 

DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning

And who would help you if you needed it, or are you really on your own?

That would be an IFA.

Its no different to any other job in life.   If you DIY and DIY well, you can save money.  Or you can DIY badly and face the consequences. If you don't know what you are doing and want it done correctly, you use a professional.   Or if you prefer for someone to do it because you dont want to, even if you are capable.

[Deleted User]

There are 3 scenarios for ongoing investment management:

1. You know nothing at all, can’t learn.  Use an IFA. Its worth it. 

2. You know a bit/can learn.  You use a good IFA.  Its waste of money, you are just adding an unnecessary layer. You are already paying for day to day expert fund management unless you buy individual shares.  Buying mutual funds isn’t DIY any more than assembling an IKEA bed is DIY. Once you picked asset allocation and withdrawal strategy, there should be no ongoing fees on top of fund and platform costs. You are paying for nothing. 

3. You know a bit/can learn. You use a bad IFA. Not only are you adding unnecessary costs, but you are harming your financial future on top of that. 

If you have a specific issue, by all means use a professional on a transactional basis. The costs are transparent and so is the benefit.  IFAs seem to like getting paid ongoing fees while they sleep. I don’t blame them but its not in your interest as long as you can read and count.

GSP

dunstonh said:

GSP said:

Deleted_User said:

GSP said:

Deleted_User said:

GSP said:

Deleted_User said:

SpringermadMR said:

Our IFA of 3 years just sold out to a wealth management company, in the letter announcing this it made no mention of becoming restricted. Our new "IFA" on first contact with us, just sent a pack to sell our 32 + funds/investments to put them into two other funds and a new platform with a % increase hidden in the paperwork and also a change to restricted. So beware of IFA's selling their business, it certainly won't be in your best interests.

Its a fundamental problem for anyone considering using IFAs for ongoing portfolio management. 

I assume  that every time people are forced to switch, there are upfront costs as well as time and effort in selecting a new advisor, unnecessary investment changes, etc. 
 

That time could be better spent understanding how to get rid of advisors altogether so the risk of them selling you goes away altogether. Given simple and superbly diversified products available on the market nobody should be using a redundant management layer  between you and your money.  Not for day to day management. Suppose if you don’t know percentages  and can’t read then you don’t have much choice but in all other cases read a book and fire your advisor. 

I’d like to think I was okay with numbers, but the whole idea of investments and being responsible for them is very scary to me, and I don’t mind admitting about losing bottle.

At present I’m struggling finding a new IFA in my area (which I don’t want to disclose if okay). Whether google isn’t enough and there is a link to a site?

Just interested what you would do in the way of investments and setting up? How many would you choose and a strategy that hopes to live off drawdown to a ‘good age’ (currently c£750k joint funds).
Thanks

“ but the whole idea of investments and being responsible for them is very scary to me,”

Yes, but you are always the one living with consequences of investment decisions, good or bad.  No way around. The impact is always on your family, not the advisor’s. By passing the responsibility to an intermediary you are kidding yourself. Sorry for being the bearer of bad news. 

“ Just interested what you would do in the way of investments and setting up?”

I would invest my time in learning, understanding and developing conviction to make my own investment policy and then implement it. I don’t know enough about you and your circumstances. The advisor doesn’t either. Nobody does as well as you know yourself. 

My position is kinda similar. I have more investable assets but also a spouse so there are two of us. We have several DB income sources which will switch on at different times and ultimately plato  at around 40K GBP/yr (cpi linked but in different countries and currencies). My asset allocation is fixed at 70/30 stocks/bonds. Stocks are in passive index funds covering the world.  Fixed income is in bonds and cash. Bonds are more actively managed with a significant US allocation to benefit from strong USD during bear markets. Total cost is around 0.1% per annum (including platform, trading, and fees).  Once I hit 65 I will move a portion of investable assets into an annuity to make sure basic needs are covered until the end. The rest will be moved to a single multi-asset fund so that the spouse can manage without any difficulty if needs must. 

My portfolio was developed when some of the more modern products were not available. Something like VLS60 can answer most peoples’ needs in a single and simple product - if they are getting close to retirement. Younger people could go 100% stocks.

Each to their own, but I would still prefer to have a professional looking after my investments and don’t mind paying them £3-4k p.a. for doing so.

Reading your paragraph “My position is kinda similar….., that’s it, you have lost me right there. I think you may underestimate the knowledge you have on this.

Just do me a favour and read this book. 

DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning

And who would help you if you needed it, or are you really on your own?

That would be an IFA.

Its no different to any other job in life.   If you DIY and DIY well, you can save money.  Or you can DIY badly and face the consequences. If you don't know what you are doing and want it done correctly, you use a professional.   Or if you prefer for someone to do it because you dont want to, even if you are capable.

Since transferring out of a db pension, (because the db pension wasn’t great, but the transfer figure was), and drawing down straight away, this area is completely new to me.

That’s a massive risk only knowing if you can DIY well as you go on.

I’ll read literature on the subject, but like you say I would want someone to do this for me. It’ll felt like I’ve never retired investing so much time on this. 

I’m spending a little bit of time already with the monitoring, and that’s enough.

Cus

There are a number of well run multi asset fund of funds that one could rely on if they are wary of DIY. They will cost a little more than pure DIY but they are less than an IFA I believe.

GSP

Deleted_User said:

There are 3 scenarios for ongoing investment management:

1. You know nothing at all, can’t learn.  Use an IFA. Its worth it. 

2. You know a bit/can learn.  You use a good IFA.  Its waste of money, you are just adding an unnecessary layer. You are already paying for day to day expert fund management unless you buy individual shares.  Buying mutual funds isn’t DIY any more than assembling an IKEA bed is DIY. Once you picked asset allocation and withdrawal strategy, there should be no ongoing fees on top of fund and platform costs. You are paying for nothing. 

3. You know a bit/can learn. You use a bad IFA. Not only are you adding unnecessary costs, but you are harming your financial future on top of that. 

If you have a specific issue, by all means use a professional on a transactional basis. The costs are transparent and so is the benefit.  IFAs seem to like getting paid ongoing fees while they sleep. I don’t blame them but its not in your interest as long as you can read and count.

I think it comes down to confidence too.

I was straight in on this from a db pension, transferring out and drawing down straight away. It still feels like a minefield, and I still haven’t come to grips with much of the terminology.

sandsy

GSP said:

dunstonh said:

GSP said:

Deleted_User said:

GSP said:

Deleted_User said:

GSP said:

Deleted_User said:

SpringermadMR said:

Our IFA of 3 years just sold out to a wealth management company, in the letter announcing this it made no mention of becoming restricted. Our new "IFA" on first contact with us, just sent a pack to sell our 32 + funds/investments to put them into two other funds and a new platform with a % increase hidden in the paperwork and also a change to restricted. So beware of IFA's selling their business, it certainly won't be in your best interests.

Its a fundamental problem for anyone considering using IFAs for ongoing portfolio management. 

I assume  that every time people are forced to switch, there are upfront costs as well as time and effort in selecting a new advisor, unnecessary investment changes, etc. 
 

That time could be better spent understanding how to get rid of advisors altogether so the risk of them selling you goes away altogether. Given simple and superbly diversified products available on the market nobody should be using a redundant management layer  between you and your money.  Not for day to day management. Suppose if you don’t know percentages  and can’t read then you don’t have much choice but in all other cases read a book and fire your advisor. 

I’d like to think I was okay with numbers, but the whole idea of investments and being responsible for them is very scary to me, and I don’t mind admitting about losing bottle.

At present I’m struggling finding a new IFA in my area (which I don’t want to disclose if okay). Whether google isn’t enough and there is a link to a site?

Just interested what you would do in the way of investments and setting up? How many would you choose and a strategy that hopes to live off drawdown to a ‘good age’ (currently c£750k joint funds).
Thanks

“ but the whole idea of investments and being responsible for them is very scary to me,”

Yes, but you are always the one living with consequences of investment decisions, good or bad.  No way around. The impact is always on your family, not the advisor’s. By passing the responsibility to an intermediary you are kidding yourself. Sorry for being the bearer of bad news. 

“ Just interested what you would do in the way of investments and setting up?”

I would invest my time in learning, understanding and developing conviction to make my own investment policy and then implement it. I don’t know enough about you and your circumstances. The advisor doesn’t either. Nobody does as well as you know yourself. 

My position is kinda similar. I have more investable assets but also a spouse so there are two of us. We have several DB income sources which will switch on at different times and ultimately plato  at around 40K GBP/yr (cpi linked but in different countries and currencies). My asset allocation is fixed at 70/30 stocks/bonds. Stocks are in passive index funds covering the world.  Fixed income is in bonds and cash. Bonds are more actively managed with a significant US allocation to benefit from strong USD during bear markets. Total cost is around 0.1% per annum (including platform, trading, and fees).  Once I hit 65 I will move a portion of investable assets into an annuity to make sure basic needs are covered until the end. The rest will be moved to a single multi-asset fund so that the spouse can manage without any difficulty if needs must. 

My portfolio was developed when some of the more modern products were not available. Something like VLS60 can answer most peoples’ needs in a single and simple product - if they are getting close to retirement. Younger people could go 100% stocks.

Each to their own, but I would still prefer to have a professional looking after my investments and don’t mind paying them £3-4k p.a. for doing so.

Reading your paragraph “My position is kinda similar….., that’s it, you have lost me right there. I think you may underestimate the knowledge you have on this.

Just do me a favour and read this book. 

DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning

And who would help you if you needed it, or are you really on your own?

That would be an IFA.

Its no different to any other job in life.   If you DIY and DIY well, you can save money.  Or you can DIY badly and face the consequences. If you don't know what you are doing and want it done correctly, you use a professional.   Or if you prefer for someone to do it because you dont want to, even if you are capable.

Since transferring out of a db pension, (because the db pension wasn’t great, but the transfer figure was), and drawing down straight away, this area is completely new to me.

That’s a massive risk only knowing if you can DIY well as you go on.

I’ll read literature on the subject, but like you say I would want someone to do this for me. It’ll felt like I’ve never retired investing so much time on this. 

I’m spending a little bit of time already with the monitoring, and that’s enough.

Sounds like it was questionable whether a DB transfer was right for you. If it doesn't pass the 'can you still sleep at night test.....' You should have had your knowledge and experience checked and been made aware of the risks, especially if the adviser knew you'd be DIYing. 

GSP

sandsy said:

GSP said:

dunstonh said:

GSP said:

Deleted_User said:

GSP said:

Deleted_User said:

GSP said:

Deleted_User said:

SpringermadMR said:

Our IFA of 3 years just sold out to a wealth management company, in the letter announcing this it made no mention of becoming restricted. Our new "IFA" on first contact with us, just sent a pack to sell our 32 + funds/investments to put them into two other funds and a new platform with a % increase hidden in the paperwork and also a change to restricted. So beware of IFA's selling their business, it certainly won't be in your best interests.

Its a fundamental problem for anyone considering using IFAs for ongoing portfolio management. 

I assume  that every time people are forced to switch, there are upfront costs as well as time and effort in selecting a new advisor, unnecessary investment changes, etc. 
 

That time could be better spent understanding how to get rid of advisors altogether so the risk of them selling you goes away altogether. Given simple and superbly diversified products available on the market nobody should be using a redundant management layer  between you and your money.  Not for day to day management. Suppose if you don’t know percentages  and can’t read then you don’t have much choice but in all other cases read a book and fire your advisor. 

I’d like to think I was okay with numbers, but the whole idea of investments and being responsible for them is very scary to me, and I don’t mind admitting about losing bottle.

At present I’m struggling finding a new IFA in my area (which I don’t want to disclose if okay). Whether google isn’t enough and there is a link to a site?

Just interested what you would do in the way of investments and setting up? How many would you choose and a strategy that hopes to live off drawdown to a ‘good age’ (currently c£750k joint funds).
Thanks

“ but the whole idea of investments and being responsible for them is very scary to me,”

Yes, but you are always the one living with consequences of investment decisions, good or bad.  No way around. The impact is always on your family, not the advisor’s. By passing the responsibility to an intermediary you are kidding yourself. Sorry for being the bearer of bad news. 

“ Just interested what you would do in the way of investments and setting up?”

I would invest my time in learning, understanding and developing conviction to make my own investment policy and then implement it. I don’t know enough about you and your circumstances. The advisor doesn’t either. Nobody does as well as you know yourself. 

My position is kinda similar. I have more investable assets but also a spouse so there are two of us. We have several DB income sources which will switch on at different times and ultimately plato  at around 40K GBP/yr (cpi linked but in different countries and currencies). My asset allocation is fixed at 70/30 stocks/bonds. Stocks are in passive index funds covering the world.  Fixed income is in bonds and cash. Bonds are more actively managed with a significant US allocation to benefit from strong USD during bear markets. Total cost is around 0.1% per annum (including platform, trading, and fees).  Once I hit 65 I will move a portion of investable assets into an annuity to make sure basic needs are covered until the end. The rest will be moved to a single multi-asset fund so that the spouse can manage without any difficulty if needs must. 

My portfolio was developed when some of the more modern products were not available. Something like VLS60 can answer most peoples’ needs in a single and simple product - if they are getting close to retirement. Younger people could go 100% stocks.

Each to their own, but I would still prefer to have a professional looking after my investments and don’t mind paying them £3-4k p.a. for doing so.

Reading your paragraph “My position is kinda similar….., that’s it, you have lost me right there. I think you may underestimate the knowledge you have on this.

Just do me a favour and read this book. 

DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning

And who would help you if you needed it, or are you really on your own?

That would be an IFA.

Its no different to any other job in life.   If you DIY and DIY well, you can save money.  Or you can DIY badly and face the consequences. If you don't know what you are doing and want it done correctly, you use a professional.   Or if you prefer for someone to do it because you dont want to, even if you are capable.

Since transferring out of a db pension, (because the db pension wasn’t great, but the transfer figure was), and drawing down straight away, this area is completely new to me.

That’s a massive risk only knowing if you can DIY well as you go on.

I’ll read literature on the subject, but like you say I would want someone to do this for me. It’ll felt like I’ve never retired investing so much time on this. 

I’m spending a little bit of time already with the monitoring, and that’s enough.

Sounds like it was questionable whether a DB transfer was right for you. If it doesn't pass the 'can you still sleep at night test.....' You should have had your knowledge and experience checked and been made aware of the risks, especially if the adviser knew you'd be DIYing. 

I’m still pleased I done it as there was no question doing the transfer with the low db pension v the decent transfer value.

I was made aware of the risks, but these still outweighed keeping the db pension, or what there was of it.
Going forward it’s a choice of going it alone or finding another IFA.
At this stage I would give myself 0 out of 10 for going it alone.
Whether that will change in time.

[Deleted User]

GSP said:

Deleted_User said:

There are 3 scenarios for ongoing investment management:

1. You know nothing at all, can’t learn.  Use an IFA. Its worth it. 

2. You know a bit/can learn.  You use a good IFA.  Its waste of money, you are just adding an unnecessary layer. You are already paying for day to day expert fund management unless you buy individual shares.  Buying mutual funds isn’t DIY any more than assembling an IKEA bed is DIY. Once you picked asset allocation and withdrawal strategy, there should be no ongoing fees on top of fund and platform costs. You are paying for nothing. 

3. You know a bit/can learn. You use a bad IFA. Not only are you adding unnecessary costs, but you are harming your financial future on top of that. 

If you have a specific issue, by all means use a professional on a transactional basis. The costs are transparent and so is the benefit.  IFAs seem to like getting paid ongoing fees while they sleep. I don’t blame them but its not in your interest as long as you can read and count.

I think it comes down to confidence too.

I was straight in on this from a db pension, transferring out and drawing down straight away. It still feels like a minefield, and I still haven’t come to grips with much of the terminology.

Fair enough. Understand it can be psychologically difficult to take responsibility for investment after retirement- if you never had investments until now.  

Annuities are also a good option for at least some of your funds.