Does a dream financial adviser like this exist?

RadicalBrew

My parents are mid-70s and paying huge amounts to Chase de Vere for advice. I suspect CdV are 2nd only to SJP in the extent to which they charm elderly people and push boundaries on what they charge.

I do not want to advise my parents directly or manage their investments. I'm a financial professional so I could do this no problem. As they have capacity and I'm not looking to inherit anything, I'd like to stay arms length.

Instead I'm trying to find an investment adviser like this:

1. Charges fixed fee or by the hour (as opposed to %age assets p.a.)

2. Creates a plan / instructions but doesn't manage the investments directly (e.g. the plan might say: Open Vanguard SIPP, invest 80% in LifeStrategy 60 etc)

3. Will take calls/emails if my parents have questions/get stuck executing the plan (fine to charge these calls at an hourly rate), although I would have no problem helping here.

4. Focuses on low-cost index-based solutions

5. Can model/explain various drawdown/end-of-life/care scenarios

6. Is a well-rounded rigorous intelligent caring individual. Not just a charming salesperson who has happened to jump through the IFA hoops.

If something like this doesn't exist I'm tempted to try to become a financial adviser myself!

dunstonh

1. Creates a plan / instructions but doesn't manage the investments directly (e.g. the plan might say: Open Vanguard SIPP, invest 80% in LifeStrategy 60 etc)

a) Vanguard do not make its platform product available to IFAs and does not have the disclosures required to satisfy regulatory requirements.  
b) The Vanguard MPS is better than their OEIC but then several other MPS are better still - Bizarrely, Vanguard does not use institutional share classes in their OEIC or MPS but makes their institutional share classes available to other MPS.  So, trying to save money by using VLS OEICs actually increases the costs.
c) An OEIC based multi-asset fund or MPS would be more expensive than advisory.  The gap is closer than it used to be if the MPS uses institutional share classes, but it is still more expensive.   
d) if you mean just use the adviser for advice and then DIY on the investments, then that would introduce VAT to the advice charge.    Intermediation is free of VAT if there is an intention to buy a financial product via the intermediary.   If there is not, then it becomes VATable.

1. Will take calls/emails if my parents have questions/get stuck executing the plan (fine to charge these calls at an hourly rate), although I would have no problem helping here.

Vatable and would need to be paid outside of the tax wrapper if a non-IFA provider is used.  So, if you were talking pensions, that increases the charge as advice charges collected via the pension have had tax relief but advice charges collected externally have not.

When you add on the higher costs and tax of the items you are considering, there is probably not much left.

Eyeful

1. How long have they been a client of  Chase de Vere?
2. Are they happy with the service they are getting? 
3. Are they happy about the charges they are paying them?
4. What are the areas of advice they consult on?
5. How many other IFA's have they seen besides this one?
6. What leads you to think another IFA would be any different?
7. You state " I'm a financial professional". Doing what?
8. Do they or you know about this? :  https://societyoflaterlifeadvisers.co.uk/
      

Albermarle

AFAIK, most advisor/client relationships are on an ongoing % age fund basis, because that is what both sides seem to prefer. It is probably worth noting that the % ongoing charge for an IFA would normally be less than someone like CDV. Although there will be an initial charge as well.
Charging by the hour seems unpopular.
The alternative is a one off charge for advice and instructions about how and what to invest in, or how to drawdown the funds, known as transactional advice. This can be repeated at a later stage, and I guess second time around would be cheaper.

IFA's on this forum ( like the one who answered above) say that many clients have transactional advice arrangements. However there are often posts from people saying they can not find anybody who is willing to do it, and they are only interested in ongoing charging. So not sure about the true situation.

Be aware that the investment portfolio side is only one aspect of financial advice. The other aspects like tax efficiency. drawdown strategies, issues with trusts, inheritance planning, keeping up to date with changing and complex legislation etc is probably more important.

1. Will take calls/emails if my parents have questions/get stuck executing the plan (fine to charge these calls at an hourly rate), although I would have no problem helping here.

Probably would be simpler just to have an ongoing charge if they are likely to need this kind of service.

 I'm tempted to try to become a financial adviser myself!

You would not be short of work ! Joking apart many of the best IFA's will have a full book of clients, so if you get too demanding with them, you might find they won't take you on. Like all business, it is a two way street.

gm0

It will be difficult to reconcile "charging by the hour".  With the required FCA conduct of business deliverables, which a PI insurer of lifetime liability of suitability of advice will insist on. 

Customer will have to endure the regulated advice journeys including the bits they don't feel they need/want. No deciding I want this but not that. And no time and materials on *only* what you want done. 

For sure the charging mechanism could be "a fee" rather than % assets under management (capped) initial charge and/or ongoing support via 0.5%.

It's not clear customers or advisers would enjoy debating the "fixed" bits of conduct of business to generate agreed timesheets and bills. 

dunstonh

Paying by the hour is also a pain in the neck for the consumer that can end up costing much more.     percentage basis does inevitably lead to some cross subsidy but the risk of an hourly rate means you can end up with a very high bill due to issues outside of the control of the adviser or client.

e.g. a transaction that is expected to take 9 hours work ends up taking 3 days (had one of those recently).  Or where you end up on the phone to a provider on hold for 2 hours only for them to cut you off and have to wait again.     

Or where there are many micro-transactions that cannot be done all at once but don't take long individually, but time blocks mean the billing is greater (time blocks in many professions or 15 or 30 minutes).

Linton

I would find it difficult to see anyone who has had to deal with a solicitor  for a significant piece of work such as executing a will being in favour of paying an hourly rate. One hears nothing for weeks but one knows that each phone call to find out what is happening merely adds to the bill. There appears to be no incentive  for them to get a job done quickly nor to work in an efficient way, rather the reverse.

Furthermore, an hourly rate is a hindrance when negotiating a sensible charge. You as a customer can discuss a charge.  It is rather more difficult to talk about hours spent at a published hourly rate without suggesting they are lying or expanding the work to fill the time they have available. An hourly rate basis limits the flexibility of both sides to come to an agreement that satisfies everybody.

Aegis

RadicalBrew said:

My parents are mid-70s and paying huge amounts to Chase de Vere for advice. I suspect CdV are 2nd only to SJP in the extent to which they charm elderly people and push boundaries on what they charge.

I do not want to advise my parents directly or manage their investments. I'm a financial professional so I could do this no problem. As they have capacity and I'm not looking to inherit anything, I'd like to stay arms length.

Instead I'm trying to find an investment adviser like this:

1. Charges fixed fee or by the hour (as opposed to %age assets p.a.)

2. Creates a plan / instructions but doesn't manage the investments directly (e.g. the plan might say: Open Vanguard SIPP, invest 80% in LifeStrategy 60 etc)

3. Will take calls/emails if my parents have questions/get stuck executing the plan (fine to charge these calls at an hourly rate), although I would have no problem helping here.

4. Focuses on low-cost index-based solutions

5. Can model/explain various drawdown/end-of-life/care scenarios

6. Is a well-rounded rigorous intelligent caring individual. Not just a charming salesperson who has happened to jump through the IFA hoops.

If something like this doesn't exist I'm tempted to try to become a financial adviser myself!

Sounds almost exactly like the model I'm building.  The only slight difference is with point 2, because you could be thinking that an adviser should only ever pick a single fund or investment strategy and then leave it alone.  To me it's slightly different as someone moves away from wanting to accrue capital and generate growth into the realm of wanting to provide an income, purely because there are some options that exist for income provision that wouldn't be included in a purely passive based growth-oriented investment portfolio.  But that's a pretty minor point and a client who really didn't like the idea of the income-producing assets being in their portfolio wouldn't be forced to do so, I just think it's a sensible inclusion based on my research. 

Importantly, though, there are advisers like that out there.  We might be smaller outfits struggling to compete - we don't have the marketing budget of someone like Chase de Vere for example, but we're definitely there.