IFA to DIY - Thank you forumites

MallyGirl

artyboy said:

Cobbler_tone said:

I always wonder at what point using an IFA becomes viable. I am sure a lot of it is down to individual understanding of pensions, investments, options and tax etc. Let's face it, a lot of the population have little idea.
With probably 70% DB and 30% DC, plus the state pension, I have often thought about whether I will use advice. I like to think I am pretty switched on but often learn a lot on here. If you don't know you don't know! 
TBH when I end with c£150k in my DC, I understand the multiple options but have no experience in where to put it, who to use, the optimal way to use it in relation to my other income etc. So it would be at my point of retirement in a couple of years that I would go down that road. I am sure a lot of people have that dilemma and most probably just muddle through themselves, being none the wiser if they could have been better/worse off as long as they have the comfortable income they need.

I have a very affluent neighbour. Very smart, worked in director roles all his career, retired at 55, (divorced) single and rattles around a 5 bed house with almost 7 figures in the bank and other than a new car every 12-18 months spends very little. He is actually moving to a smaller house, so will generate some more money. I know he isn't messing around putting money into a SIPP each year, holds a bit of gold and scans individual items at the supermarket to get round ups. He knows the ins and outs of pensions and has several coming in, a couple phased to the state pension which he'll get a couple of extra years out of. He has now started putting his heating on before Oct because I think the penny has dropped that his tax bill is growing. There is a reason he is a millionaire!  He wouldn't touch an IFA but I am sure he could grow his wealth even further. Context is everything and we aren't all aiming to become Bill Gates. 

Reading some of the above, it sounds as though the role is getting harder and that there are less of them. Common sense alone tells you that supply and demand will lead to price increases. Try getting a decent tradesperson on the day you want them for less than £400-500 a day. 
I would imagine a good, trusted and efficient IFA is worth their weight in gold.
  

For me, the 'when' isn't primarily driven by a net worth figure, but rather by my (and Mrs Arty's) age.

Because whilst we have been happy to DIY investments, estate planning is a very different matter, and if we're not careful, Rachel from accounts (or one of her successors) will end up getting a big big chunk. 

So some targeted advice in that area is definitely on our to do list - we just have to find an IFA with enough specialization in this area, as I'm guessing it's not something that all IFAs focus on. 

Estate planning is also the area we will pay for one-off advice in - once the new rules are in place.

GunJack

Cobbler_tone said:

With probably 70% DB and 30% DC, plus the state pension, I have often thought about whether I will use advice. I like to think I am pretty switched on but often learn a lot on here. If you don't know you don't know! 
TBH when I end with c£150k in my DC, I understand the multiple options but have no experience in where to put it, who to use, the optimal way to use it in relation to my other income etc. So it would be at my point of retirement in a couple of years that I would go down that road. I am sure a lot of people have that dilemma..

Similar to me, 2x DB payable at 60 and 65, full SP when I get there, and will have around £150k in a DC by 62. 

I'm not planning on a IFA for the DC, as I'm just looking at using it to bridge between 62 and 67 to smooth out retirement income from first DB starting, finishing work at 62, second DB at 65 and SP at 67. I will take the 25% from the DC to finish the mortgage off so's I don't need to use the PCLS from either of the DBs to do so, and if my spreadsheet it correct there'll be a few k left as a residual slush fund which can sit there and grow for if/when needed.

I don't think an IFA could really help that much with the plan, and the couple of k saved stays in the slush fund 🙂

As for estate planning, property in our neck of the woods is cheap compared to the south east so there won't be any IHT issues to worry about 🙂

Hoenir

Cobbler_tone said:

I always wonder at what point using an IFA becomes viable. I am sure a lot of it is down to individual understanding of pensions, investments, options and tax etc. Let's face it, a lot of the population have little idea.

  

People these days spend their time self diagnoising their ailments. Then proceeding to tell their medical advisors what their issue is. Recall a year or so back. When my partner developed a sarcoma in her groin. The first thing the consultant ( a world leading speclialist) said. "Hope you haven't used Google and caused yourself to panic. There's over 1,200 types of sarcoma and more are being identified all the time".  

Cobbler_tone

Hoenir said:

Cobbler_tone said:

I always wonder at what point using an IFA becomes viable. I am sure a lot of it is down to individual understanding of pensions, investments, options and tax etc. Let's face it, a lot of the population have little idea.

  

People these days spend their time self diagnoising their ailments. Then proceeding to tell their medical advisors what their issue is. Recall a year or so back. When my partner developed a sarcoma in her groin. The first thing the consultant ( a world leading speclialist) said. "Hope you haven't used Google and caused yourself to panic. There's over 1,200 types of sarcoma and more are being identified all the time".  

TBF it is more efficient to self diagnose than wait for an appointment these days. I don’t think I’ve got anything wrong so far but haven’t stretched to sarcoma. 

Ok, Ok…off topic.

dunstonh

Reading some of the above, it sounds as though the role is getting harder and that there are less of them.

If you take all types of adviser (as historical data never recorded the different types), at its peak there were over 300,000.   Now its just over 20,000

I always wonder at what point using an IFA becomes viable.

Hargreaves Lansdown is the UK's largest DIY provider by a significant amount.    You regularly see their own brand funds in the top 10 sold list that they publish periodically.        Those funds are expensive.   So, those people who DIY and use those are likely not to be saving money even though they think they have cut out a cost.

DIY well and it can save you money. DIY badly and it can be a costly mistake.

DT2001

dunstonh said:

Reading some of the above, it sounds as though the role is getting harder and that there are less of them.

If you take all types of adviser (as historical data never recorded the different types), at its peak there were over 300,000.   Now its just over 20,000

I always wonder at what point using an IFA becomes viable.

Hargreaves Lansdown is the UK's largest DIY provider by a significant amount.    You regularly see their own brand funds in the top 10 sold list that they publish periodically.        Those funds are expensive.   So, those people who DIY and use those are likely not to be saving money even though they think they have cut out a cost.

DIY well and it can save you money. DIY badly and it can be a costly mistake.

Exactly, know your limitations.

cfw1994

DT2001 said:

dunstonh said:

Reading some of the above, it sounds as though the role is getting harder and that there are less of them.

If you take all types of adviser (as historical data never recorded the different types), at its peak there were over 300,000.   Now its just over 20,000

I always wonder at what point using an IFA becomes viable.

Hargreaves Lansdown is the UK's largest DIY provider by a significant amount.    You regularly see their own brand funds in the top 10 sold list that they publish periodically.        Those funds are expensive.   So, those people who DIY and use those are likely not to be saving money even though they think they have cut out a cost.

DIY well and it can save you money. DIY badly and it can be a costly mistake.

Exactly, know your limitations.

But also accept that nothing is perfect.  
There are no guarantees I can manage our funds perfectly (indeed, I am sure I can’t), but there are no guarantees a paid-for advisor would be perfect either.
Friends were telling us last week how their advisor makes their eyes glaze over when he explains things to them…but what a brilliant job he does.  How the heck would they know?!!
I always think there is value in understanding how things work (engineering background 🤪), & that would drive me crazy - I’d be a hopeless client 🤣
I do know that paying for some specific advice can of course make sense.

Good enough is good enough 👍

As the number of summers reduce, if our net worth is more than the year before, the world can keep spinning.  As someone else put it, going DIY will likely reduce the amount you “need” to make on investments by not paying an IFA/FA.

& yes, I understand I am probably in a minority (maybe not here) 🤷‍♂️

Life isn’t a dress rehearsal, but an adventure.  Today’s adventure is to hack out the blight from a small box hedge here, then beers with pals I haven’t seen much of for 10 years.  Cheers 🍻

michaels

Do you think people realise
1 the eye watering sums they are paying to groups like St James Place  5% a year on £2m for a 40 year relationship is of course a mere £4m
2 that financial advisers can not beat the markets, where they do it is because they get lucky when taking higher risks

artyboy

dunstonh said:

Reading some of the above, it sounds as though the role is getting harder and that there are less of them.

If you take all types of adviser (as historical data never recorded the different types), at its peak there were over 300,000.   Now its just over 20,000

I always wonder at what point using an IFA becomes viable.

Hargreaves Lansdown is the UK's largest DIY provider by a significant amount.    You regularly see their own brand funds in the top 10 sold list that they publish periodically.        Those funds are expensive.   So, those people who DIY and use those are likely not to be saving money even though they think they have cut out a cost.

DIY well and it can save you money. DIY badly and it can be a costly mistake.

Of course, an ETF like HMWO held with HL is cheap as chips...

ali_bear

It is pretty eye watering what I pay Aviva each year just to hold my funds.