IFA initial report v unsatisfactory do I have to pay

Jacobite132

Very dissatisfied with our IFA's initial report.  After months of work digging up paperwork and filling in forms she:
- Misstated value of our assets by 65k.
- Included wrong information about proposed new pension arrangements.
- Proposed investments that have underperformed our existing ISAs by 35% over last 5 years including one fund that has had negative growth.
- Half the proposed funds are trackers.  
- Misunderstood my attitude to ESG.
We signed agreement to pay 7k (assets around £1m) for first report.  But it's shoddy work imho.  Do you think we have to pay and any suggestions for lawyers to turn to?
Reputable IFA company based in T Wells

Phossy

I have no idea on whether you have to pay or not, but how about addressing this with the IFA as a first port of call and/ or escalating it as appropriate within the IFA's company. Give them a chance to fix it.

eskbanker

Jacobite132 said:

Very dissatisfied with our IFA's initial report.  After months of work digging up paperwork and filling in forms she:
- Misstated value of our assets by 65k.
- Included wrong information about proposed new pension arrangements.
- Proposed investments that have underperformed our existing ISAs by 35% over last 5 years including one fund that has had negative growth.
- Half the proposed funds are trackers.  
- Misunderstood my attitude to ESG.
We signed agreement to pay 7k (assets around £1m) for first report.  But it's shoddy work imho.  Do you think we have to pay and any suggestions for lawyers to turn to?
Reputable IFA company based in T Wells

What makes you feel that the bolded points are flaws/errors?

dunstonh

- Proposed investments that have underperformed our existing ISAs by 35% over last 5 years including one fund that has had negative growth.

And why do you think that is a problem?

- Half the proposed funds are trackers.  

And why do you think that is a problem?

- Misunderstood my attitude to ESG.

ESG doesn't have an attitude to consider.   Are you mixing up ESG with ethical?  ESG is ESG. There are no opinions to apply. Ethical, on the other hand, is personal.

 But it's shoddy work imho.  Do you think we have to pay and any suggestions for lawyers to turn to?

Why on earth would you want to employ a lawyer?

LHW99

Take the complaint to the IFA. They have done work, even if you are not happy with the results, but may well offer to reduce the fee a smidge due to your first two points.

Jacobite132

I have written twice to the IFA and she has insisted on the bill being paid.    

eskbanker

Jacobite132 said:

I have written twice to the IFA and she has insisted on the bill being paid.    

How did she respond to the individual points raised?  If you've put them to her and she's refused to address the valid ones, then the firm should have a defined complaints process....

Jacobite132

Thanks for your replies.  I suppose I had expected an IFA to be able to recommend investments with a better track record than the ones I already had not worse.  Including one that as only three years pedigree and negative growth for that period.  Was that naive?

SouthCoastBoy

I think the first question when employing an IFA is what were you expecting from the IFA? Were the parameters clearly defined and understood by both parties and have they met those objectives?

Marcon

Jacobite132 said:

Thanks for your replies.  I suppose I had expected an IFA to be able to recommend investments with a better track record than the ones I already had not worse.  Including one that as only three years pedigree and negative growth for that period.  Was that naive?

It's certainly a common attitude, so 'naive' could be a bit harsh.

Much depends on the instructions you gave her and her view of how these funds are likely to perform in future, so possibly 'crossed wires' or a simple misunderstanding of the IFA's role might be closer to the mark.

Your original post sets out things you regard as shoddy/unsatisfactory, when they might actually fit with what you've said your objectives are. 

eskbanker said:

Jacobite132 said:

I have written twice to the IFA and she has insisted on the bill being paid.    

How did she respond to the individual points raised?  If you've put them to her and she's refused to address the valid ones, then the firm should have a defined complaints process....

^^^^^This is your next step.

eskbanker

Jacobite132 said:

Thanks for your replies.  I suppose I had expected an IFA to be able to recommend investments with a better track record than the ones I already had not worse.  Including one that as only three years pedigree and negative growth for that period.  Was that naive?

It sounds like a misunderstanding of the role of the IFA, which is to establish your requirements in a structured manner, in terms of objectives, timescales, risk tolerance, etc, and then to propose a strategy to meeting this with minimal risk of failure, rather than aiming to find investments that have most growth potential (which will typically have most loss potential too) as such.