IFA fees

dunstonh

I just spotted the link below today, think its old news, they are in the press a plenty lately, 80% and from my reading on average 90% of IFAs achieve a lesser outcome than just picking a low cost platform and pick 1 or more of the standard trackers of whatever you like.

The headline doesn't appear to suggest that at all.     I suggest you try again.

eskbanker

RogerPensionGuy said:

I just spotted the link below today, think its old news, they are in the press a plenty lately, 80% and from my reading on average 90% of IFAs achieve a lesser outcome than just picking a low cost platform and pick 1 or more of the standard trackers of whatever you like.

I get that IFAs can make you feel warm and secure and help planning if a person needs it, but these last few years with nice easy low cost platforms, it looks to me like DIY will just keep growing and growing, the IFA has had a good long run in the old days, but its all different now.

Sounds like you're falling into a common trap of measuring IFAs as if their remit was to maximise returns, but if you've downloaded the SJP report in that link, perhaps it would be worth sharing some actual quotes that support your point?

Albermarle

 it looks to me like DIY will just keep growing and growing, the IFA has had a good long run in the old days, but its all different now.

Yes it is much easier DIY investing at low cost nowadays.

However away from the bubble of these forums and other investing websites, publications etc , the public remains woefully ignorant of personal finance issues, and would no more know how to DIY invest, than they would to DIY a nuclear reactor.

If you asked 100 people what a global equity index fund was, how many do you think would know? Five ? and maybe another five with a close guess. 

Or out of a 100 working adults, how many could explain how pension tax relief actually works? I would guess less than 10%.

boingy

Albermarle said:

 it looks to me like DIY will just keep growing and growing, the IFA has had a good long run in the old days, but its all different now.

Yes it is much easier DIY investing at low cost nowadays.

However away from the bubble of these forums and other investing websites, publications etc , the public remains woefully ignorant of personal finance issues, and would no more know how to DIY invest, than they would to DIY a nuclear reactor.

If you asked 100 people what a global equity index fund was, how many do you think would know? Five ? and maybe another five with a close guess. 

Or out of a 100 working adults, how many could explain how pension tax relief actually works? I would guess less than 10%.

What percentage of those 100 people have any significant money to invest?

poseidon1

boingy said:

Albermarle said:

 it looks to me like DIY will just keep growing and growing, the IFA has had a good long run in the old days, but its all different now.

Yes it is much easier DIY investing at low cost nowadays.

However away from the bubble of these forums and other investing websites, publications etc , the public remains woefully ignorant of personal finance issues, and would no more know how to DIY invest, than they would to DIY a nuclear reactor.

If you asked 100 people what a global equity index fund was, how many do you think would know? Five ? and maybe another five with a close guess. 

Or out of a 100 working adults, how many could explain how pension tax relief actually works? I would guess less than 10%.

What percentage of those 100 people have any significant money to invest?

I am entirely  with Albermarle on this although i query his 10% figure ( too high in my view!). Furthermore having 'significant' money to invest is irrelevant.

 I started my investment journey at age 18 back in the late 1970s 'investing' just £30 per month in an 
 M & G Japan fund ( albeit on a DIY basis), which was the start of my education in  investment matters, along with stumbling around the financial landscape of mortgages, credit cards, balancing a checking account etc.

The vast mass of the general public remain woefully financially illiterate despite the array of self help tools and forums readily at their disposal.

I personally do not need the services of an IFA, but for those who end up with large sums to invest (for whatever reason) , or find they have a useful excess of income over daily expenses, an IFA can be a useful guide to help identify their needs and objectives and help navigate the jungle of financial products that can assist.

eskbanker

poseidon1 said:
Furthermore having 'significant' money to invest is irrelevant.

Not really - for those who don't have significant money to invest, it's irrelevant whether or not they know what investing terms mean!

Albermarle

boingy said:

Albermarle said:

 it looks to me like DIY will just keep growing and growing, the IFA has had a good long run in the old days, but its all different now.

Yes it is much easier DIY investing at low cost nowadays.

However away from the bubble of these forums and other investing websites, publications etc , the public remains woefully ignorant of personal finance issues, and would no more know how to DIY invest, than they would to DIY a nuclear reactor.

If you asked 100 people what a global equity index fund was, how many do you think would know? Five ? and maybe another five with a close guess. 

Or out of a 100 working adults, how many could explain how pension tax relief actually works? I would guess less than 10%.

What percentage of those 100 people have any significant money to invest?

It's a fair comment, but I think you know the point I am making. Anyway the majority of working age adults will be enrolled in a pension. From posts we see on here, and what I hear personally, most do not understand hardly anything about them. 

boingy

Albermarle said:

boingy said:

Albermarle said:

 it looks to me like DIY will just keep growing and growing, the IFA has had a good long run in the old days, but its all different now.

Yes it is much easier DIY investing at low cost nowadays.

However away from the bubble of these forums and other investing websites, publications etc , the public remains woefully ignorant of personal finance issues, and would no more know how to DIY invest, than they would to DIY a nuclear reactor.

If you asked 100 people what a global equity index fund was, how many do you think would know? Five ? and maybe another five with a close guess. 

Or out of a 100 working adults, how many could explain how pension tax relief actually works? I would guess less than 10%.

What percentage of those 100 people have any significant money to invest?

It's a fair comment, but I think you know the point I am making. Anyway the majority of working age adults will be enrolled in a pension. From posts we see on here, and what I hear personally, most do not understand hardly anything about them. 

Also a fair comment but most pensions are not SIPPs. They are just whatever the company scheme is, and where there is some choice in those pensions most people just go with the default. They don't need to know anything about investing or pensions. They just contribute throughout their working life, have no idea what fees they are paying and probably end up buying an annuity from the same company. It won't be optimum, but it will be OK. They won't come to this forum and they won't consult an IFA. Anyone who makes it to this forum is very much in the minority but it's easy for us to think otherwise. 

Outside of pensions, most people will never invest in any form of shares or funds. If they have an ISA it will be a Cash ISA. They just don't need to know anything about investing.

RogerPensionGuy

My view is that a large % of IFAs or similar sell themselves on have special feeds that allow them to achieve super dooper returns. I don't think this holds water. 

I agree that some people do much better personally via the IFA, DFM & and Platform route that doing it themselves if they take little interest or able to plan and play on these low cost big choice tools. 

If talking going forwards with more and more SIPP DC pensions appearing, I think most people just need a sensible low cost system on the inputs and possibly a bit of information advice maybe every 5 or 8 years maybe and maybe more information advice from maybe 10 years from taking out value from pension. 

I know a good few people who are well able to operate a simple DIY SIPP, but choose to pay others well to do the paperwork and enjoy the yearly meeting, video or phone call, to boot these people are happy to see net performance for client chunks less than bog standard DIY SIPP in a few or single big standard cheap to run units. 

What I was showing in my last post is there's lots of press just highlighting that IFAs can be poor value for people. 

Going forward with more and more SIPPs and better, smarter low cost platforms growing, the future will have different dynamics. 

dunstonh

My view is that a large % of IFAs or similar sell themselves on have special feeds that allow them to achieve super dooper returns. I don't think this holds water. 

And how many IFAs have you had meetings with?     approx 20,000 advisers out there.    So, what is a large percentage? 75%?    So, you have met 15,000 advisers?

Lets be honest, you couldn't even tell the difference between an IFA and SJP.   So, you don't hold any credibility.

What I was showing in my last post is there's lots of press just highlighting that IFAs can be poor value for people. 

And yet the link in your last post had nothing to do with IFAs.