IFA Charges - Increase

Pat38493

retiringtoosoon said:

Why on earth would you pay somebody to advise on your pension investments? It’s not rocket surgery. DIY 

Could be useful for some as a sense check - I suspect that some people miss a few points like making sure that they will be ok no matter which of them dies first.

Linton

retiringtoosoon said:

Why on earth would you pay somebody to advise on your pension investments? It’s not rocket surgery. DIY 

Choosing investments is the easy part provided you know what you want the investments to do.  The real difficulties many people have lie in managing large sums of money far outside their normal day to day experience when if they get in wrong it could seriously affect the rest of their lives. That is where an IFA  can easily save far more than the fees charged.

Look at the sort of questions we get asked on this forum - eg:
 -  my pension has dropped by 10% in the past year should I stop paying into the company pension and put my money into bank savings?
 - I am now earning over £100K/year,  should I up my £3K/year pension contributions?
 - I have inherited £200K, what do I do with it?  I dont want to take any risks.
 - Can I afford to retire?
 - I have received an email advertising 10% guaranteed interest.  Should I invest?
etc etc

Beyond this there are the potentially complex problems of minimising taxation and maximisng inheritance.

These questions are from people who have the initiative to ask about things they know they dont know.  Most I suspect would never think of asking on an internet forum even if they knew such a forum existed.  But internet forums are not the answer to the problem.  For a start there is no compensation if the answers are wrong. Even if the answers are technically right they could be inappropriate for the particular circumstances of the questioner since it is not practical for those who respond to questions to dig very deeply into what those circumstances are.

The situation will only get worse as more people become dependent on  DC pension pots of £n00K to ensure they can continue to enjoy the standard of living they were previously used to for possibly the final 1/3-1/4 of their lives. 

Proper regulated advice is the right answer for many people.

Albermarle

retiringtoosoon said:

Why on earth would you pay somebody to advise on your pension investments? It’s not rocket surgery. DIY 

@Linton makes a lot of good points. I think you are seriously overestimating the abilities of the public when it comes to personal finance. Many can not even work out percentages, and if you asked then what an ETF or a Dividend or risk tolerance was, you would just be met by a blank stare.

westv

retiringtoosoon said:

Why on earth would you pay somebody to advise on your pension investments? It’s not rocket surgery. DIY 

Rocket surgery? Lol!

Qyburn

retiringtoosoon said:

Why on earth would you pay somebody to advise on your pension investments? It’s not rocket surgery. DIY 

I don't know what would be a realistic expectation. For example during 2022 when bonds and bond-heavy multi asset funds funds were tanking, did IFAs move their customers into cash or short dated bond (or whatever made sense? 

Albermarle

Qyburn said:

retiringtoosoon said:

Why on earth would you pay somebody to advise on your pension investments? It’s not rocket surgery. DIY 

I don't know what would be a realistic expectation. For example during 2022 when bonds and bond-heavy multi asset funds funds were tanking, did IFAs move their customers into cash or short dated bond (or whatever made sense? 

In fact a better question would be did they move out of bonds/gilts before they started tanking?

It was mentioned on this forum a few times a couple of years/18 months  ago, that bonds were not the place to be ( not by me but I did take note to some extent luckily) . IIRC our resident IFA said that the investment guidance they were getting was to reduce reliance on bonds/gilts.