A 'not fully' independent financial adviser

MeteredOut

I'd actually argue that those that have absolutely no inclination (or cerebral capacity) to manage their own retirement planning would be better off choosing a low cost SIPP and a pre-made tracker/lifestyle fund rather that going to a financial advisor.

This is on the basis that those with more interest in financial products, or those with financial savvy, are more likely to get the best out of what an IFA can offer, because they can explain their needs/goals and probably better understand or challenge any decisions.

Albermarle

MeteredOut said:

I'd actually argue that those that have absolutely no inclination (or cerebral capacity) to manage their own retirement planning would be better off choosing a low cost SIPP and a pre-made tracker/lifestyle fund rather that going to a financial advisor.

This is on the basis that those with more interest in financial products, or those with financial savvy, are more likely to get the best out of what an IFA can offer, because they can explain their needs/goals and probably better understand or challenge any decisions.

It is a good point. I get the impression that some clients are more confused after meeting an IFA than before.
Of course it depends to some extent how good the IFA is at explaining things in clear and simple terms, with minimum jargon.
Not easy though in this field.

kempiejon

dont_use_vistaprint said:

tickledpink1 said:

I'm not sure that I'm happy managing my own investment portfolio. That's why I'm looking for an independent financial adviser.

If I were you I’d just call the free pension number then Aviva , of course the latter is not independent but they have great managed  products  and platform &  have made me huge returns, 16.4% over the last 12 months alone. 

Or you can do what others are saying , it might work too 

Making a start on pension investments is the best advice. Which investment is harder.
I think we need to talk about the phrase huge returns there and value for money. How much does one you pay Aviva to make 16% in 12 months? I made 25% buying a global tracker. I made 40% buying a gold etf. No fees for management just 2 dealing fees of £1.50 each.

12 months is of course no time frame to make such judgements. Aviva need to make money to have the staff and infrastructure of website, advisors, researchers, sales force, head office, etc. I also make money from my Aviva shares as I'm getting dividends as a share holder. Customers supply that money. 
I have no particular hate against Aviva, but a cheap global tracker seems a good bench mark. Mine has doubled in 5 years.

For the OP if you're not happy going DIY hire a professional. A professional that doesn't consistently beat an easy, low cost tracker is costing you something for that happiness which is your choice. Starting a pension is the most important bit here though.

Pipthecat

They are cash ISAs not stocks and shares. Is managing a SIPP as easy as a cash ISA?

In terms of the mechanics of opening the account and setting up regular payments into a SIPP there is really nothing to it. At least no more complex than setting up a new ISA with a new company and having to go through the ID process. Here my advice would be pick a low cost provider with a name you trust.

The complexity comes from deciding what to invest in.  With a Cash ISA you can pretty much just pick whoever tops the table in terms of the best interest rate.  With the SIPP (or S&S ISA) you have an almost bewildering range of investment options.  As others have posted you can keep this really simple and just choose a balanced portfolio based on your risk appetite and there are plenty of off the shelf products specifically for this.  Vanguard and HSBC being quoted in an earlier post. 

Understanding what the right level of risk to take is unique to your personal circumstances. There are some really good UK specific YouTube videos which can help research this.  Even if you decide you need some professional help, having a basic understanding of the risks associated with various investment types and what level of returns you want to achieve will be of benefit.

dunstonh

There are some really good UK specific YouTube videos which can help research this.

There are also some really bad ones that give out misinformation or are just a front for referral links.    

tickledpink1

Thank you all so much for your advice.

The adviser at Fairstone clarified the 'not fully independent' bit by saying:

"It’s a selection of investment managers that we use. The investment managers then can select investments in any way they choose from the whole of the market."

Their total charges are just over 1%, lower than others as they operate solely remotely. (A low-cost SIPP with Vanguard looks to be just under 0.5%.)

For my peace of mind that it is being managed competently by someone else, this doesn't sound too bad. Or am I just being naïve?!

 

Albermarle

tickledpink1 said:

Thank you all so much for your advice.

The adviser at Fairstone clarified the 'not fully independent' bit by saying:

"It’s a selection of investment managers that we use. The investment managers then can select investments in any way they choose from the whole of the market."

Their total charges are just over 1%, lower than others as they operate solely remotely. (A low-cost SIPP with Vanguard looks to be just under 0.5%.)

For my peace of mind that it is being managed competently by someone else, this doesn't sound too bad. Or am I just being naïve?!

 

As a benchmark you can get a managed service from Vanguard for an additional 0.3% I think.

One thing to keep in mind is that an IFA will take a full view of your personal/family/tax situation and offer advice on inheritance, trusts etc.. The investment side is the simpler part.
These more stripped down advice services offered by Vanguard ( and others), maybe also by Fairstone ( remote only) are often less comprehensive .

cfw1994

kempiejon said:

dont_use_vistaprint said:

tickledpink1 said:

I'm not sure that I'm happy managing my own investment portfolio. That's why I'm looking for an independent financial adviser.

If I were you I’d just call the free pension number then Aviva , of course the latter is not independent but they have great managed  products  and platform &  have made me huge returns, 16.4% over the last 12 months alone. 

Or you can do what others are saying , it might work too 

Making a start on pension investments is the best advice. Which investment is harder.
I think we need to talk about the phrase huge returns there and value for money. How much does one you pay Aviva to make 16% in 12 months? I made 25% buying a global tracker. I made 40% buying a gold etf. No fees for management just 2 dealing fees of £1.50 each.

12 months is of course no time frame to make such judgements. Aviva need to make money to have the staff and infrastructure of website, advisors, researchers, sales force, head office, etc. I also make money from my Aviva shares as I'm getting dividends as a share holder. Customers supply that money. 
I have no particular hate against Aviva, but a cheap global tracker seems a good bench mark. Mine has doubled in 5 years.

For the OP if you're not happy going DIY hire a professional. A professional that doesn't consistently beat an easy, low cost tracker is costing you something for that happiness which is your choice. Starting a pension is the most important bit here though.

Interesting….my Aviva Blackrock World ex UK Equity Index Tracker costs 0.23% (total) & returned over 28% over the past 12 months.

As you say, no time to really tell, but it’s available inside Aviva at low cost (at least in my “NewGen pension”).
Only up 88% over 5 years, mind you.    Which tracker do you have that has doubled?   Always keen to learn!

I tend to lean towards the Kroijer.com approach - lowest cost global tracker will likely win out in the long term.

bjorn_toby_wilde

Albermarle said:

tickledpink1 said:

Thank you all so much for your advice.

The adviser at Fairstone clarified the 'not fully independent' bit by saying:

"It’s a selection of investment managers that we use. The investment managers then can select investments in any way they choose from the whole of the market."

Their total charges are just over 1%, lower than others as they operate solely remotely. (A low-cost SIPP with Vanguard looks to be just under 0.5%.)

For my peace of mind that it is being managed competently by someone else, this doesn't sound too bad. Or am I just being naïve?!

 

As a benchmark you can get a managed service from Vanguard for an additional 0.3% I think.

One thing to keep in mind is that an IFA will take a full view of your personal/family/tax situation and offer advice on inheritance, trusts etc.. The investment side is the simpler part.
These more stripped down advice services offered by Vanguard ( and others), maybe also by Fairstone ( remote only) are often less comprehensive .

That’s a very good point. An IFA can be helpful for much more than putting together a SIPP and are very useful for advice on tax, inheritance, etc.

The problem I found was how to find a good IFA after mine retired.  As has often been pointed out on here, Unbiased and other online sources are no longer reliable.

The advice is often to use somebody that a friend or family member recommends but we also see on here people defending SJP.  Presumably the same people are happily recommending them to their friends!

incus432

bjorn_toby_wilde said:

That’s a very good point. An IFA can be helpful for much more than putting together a SIPP and are very useful for advice on tax, inheritance, etc.

The problem I found was how to find a good IFA after mine retired.  As has often been pointed out on here, Unbiased and other online sources are no longer reliable.

The advice is often to use somebody that a friend or family member recommends but we also see on here people defending SJP.  Presumably the same people are happily recommending them to their friends!

A very good question. I had no recommendations so I used the Unbiased/ Vouchedfor lists, plus the MoneyHelper 'Find a retirement Adviser' Directory and Googling for local IFAs. I emailed about 10 asking if they could help with purchasing a specific product (Fixed Term annuity) on an Execution only basis and what their fees would be. Nine of them were unwilling to do this and insisted on a full financial review first. 

To quote a 2014 report: “To make a health sector comparison, it is as if medical advice could only be given by leading (and expensive) Harley Street specialists who were required by law to undertake a full range of head-to-toe checks on the patient (CAT scans, eye tests, auditory perception, blood analysis, lung performance, metabolic rate, liver function etc) and carefully consider all of these before, say, removing the patient’s tonsils or prescribing cream for eczema.”

I kept the details of the one who was willing (he was on holiday so replied too late to use him for the above) for future reference. He seerms to work mainly on word of mouth