Financial Advice - how much does it cost?

pterri

Ibrahim5 said:

Financial advice has very little knowledge required and no practical skills. That's why it's so easy to DIY. Going to court is a performance. You might employ someone who is good at performing.

You watch too much TV

Bostonerimus1

pterri said:

Ibrahim5 said:

It's exactly the same. If you do a bit of research it's easy to do your own LPA. If you do a bit of research you do your own financial advice. Save a fortune and do a much better job yourself.

Are you the kind of guy who would defend himself in court? 

A trial lawyer, plumber etc are quite complicated jobs and sometimes there are rules that require you to use a professional. Managing your finances can be quite simple, though not necessarily easy, but the financial industry has a vested interest in making it seem complicated. Also lawyers and plumbers don't charge you on going fees after they have done work for you. The 1%ish fee every year for financial "advice" is a big drag on your portfolio's performance.

Ibrahim5

I don't really think plumbing is very complicated to be fair.

Sarahspangles

Bostonerimus1 said:

pterri said:

Ibrahim5 said:

It's exactly the same. If you do a bit of research it's easy to do your own LPA. If you do a bit of research you do your own financial advice. Save a fortune and do a much better job yourself.

Are you the kind of guy who would defend himself in court? 

A trial lawyer, plumber etc are quite complicated jobs and sometimes there are rules that require you to use a professional. Managing your finances can be quite simple, though not necessarily easy, but the financial industry has a vested interest in making it seem complicated. Also lawyers and plumbers don't charge you on going fees after they have done work for you. The 1%ish fee every year for financial "advice" is a big drag on your portfolio's performance.

Trades like plumbers, heating engineers and mechanics do provide annual services though. We treat those as running costs so we don’t necessarily consider them as ‘lifetime costs’ of having a water filter or car. I wouldn’t want to have to upskill and acquire the tools to diy those.

Most people should be able to manage their finances but it helps if they know when they would benefit from advice. Whether they’re getting value from their 1% service is a different issue. A few months ago AJ Bell adjusted the makeup of their ready-made funds and I observe they seem to be less exposed to current issues than the Vanguard funds I also hold. Received wisdom from this forum would be that VLS100 and VLS80 were not more intrinsically risky than other funds.

Ibrahim5

Car servicing is pretty easy to be fair. Tools aren't expensive.

Nebulous2

I've given the plumbing comparison before - more than once! 

We have a very competent plumber who installed our boiler and who services it and the rest of our central heating. 

We have also installed a kitchen and a bathroom ourselves in the last two years including the plumbing. 

Our plumber uses copper pipes and (brazes?) all the joints. His work is very neat. We use plastic pipes and push-fit joints and it can look a bit like spaghetti. 

It's impossible for me to give a meaningful comparison between the two. 

Equally DIYing my finances, we're happy and are getting by fine, particularly as I have a decent DB underpin. 

However I keep thinking I have a plastic pipe version, rather than a copper pipe one, and sometimes vaguely wonder if I am missing something. 

Ibrahim5

Copper pipes are soldered together. Plenty of YouTube videos showing how to do it.

LHW99

Ibrahim5 said:

Copper pipes are soldered together. Plenty of YouTube videos showing how to do it.

And there are plenty of examples of corrosion in copper pipes due to incorrect joint-work (and degradation of plastic pipes when polymer cement is used)

Hoenir

GenX0212 said:

 Knowing that there would be a level of 'selling' of other products I went in with an open mind but came out shocked that they wanted to charge £300+ for setting up an LPA when it can be done online yourself for £82 and they also wanted to charge £50 per year to store the will, you can do it yourself via the Gov.uk website for a one-off fee of just £22. God only knows what they would have wanted to charge for some actual real advice.

Do you buy tea or coffee when you are out and about. Or do you only drink it at home when you make it for yourself.  Most people could save themselves a fortune over their lives if they chose to do so. 

Bostonerimus1

Most people's finances aren't as complicated as the plumbing in their houses - not really a valid comparison I suppose. Anyway, the skills required to manage your finances are some common sense, understanding maths to the level of compound interest and some self-confidence combined with a bit of cynicism to sniff out the "wide boys". I believe most people have the necessary skills or can easily acquire them, but they might not want the bother, don't have the self belief or have swallowed the industry line that it's complicated and you need advice. There will be people with legitimately complicated finances who need help and will benefit from out of the ordinary investment and tax strategies. But for the vast majority of people with pensions, SIPPs, ISAs and some savings the fees for financial advice are just an unnecessary self imposed tax.