IFA vs DIY

GenX0212

https://forums.moneysavingexpert.com/discussion/comment/81911312#Comment_81911312

You can buy ILGilts in a SIPP with AJBell

leosayer

Sophistication and prudence are very helpful characteristics but I feel diligence and emotional intelligence are also critical.

Diligence - organisational skills are important to make sure you keep on top of actions and keep updated with rules around pensions, tax and investments. Be prepared to for ongoing reading to address known unknowns and unknown unknowns.

Emotional intelligence - the ability to manage your emotions when it dealing with stressful financial situations such as a market crash or unexpected major expense. Have ongoing discussions with your partner about your approach and align as necessary. Frequently challenge your own beliefs and plans and ask other to do the same.

Finally, I feel that have to want to DIY because it interests you. If you view it as chore to save money then it probably won't produce the right outcome.

I'm a DIYer, am retired from working in investments and have treated my managing personal finances like a second job for the past 15 years and yet I still feel like there's so much to learn.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81913446#Comment_81913446

All the attributes you mention are useful in whatever we do. It's really a matter of degree ie how dilligent do we need to be? My approach has always to try to minimize the amount diligence and emotional intelligence needed to have my portfolio meet my requirements. Ive found that a few simple rules and a simple index tracker portfolio allows me to do very little and be relatively successful. I've rarely felt that DIYing was a chore because I do so little managing of my investments and IMO there's not much to personal finances once you grasp the basics and most "new stuff" is just repackaged "old stuff" or worse a scam. The area that can become complicated is taxation.

Veloflyer

https://forums.moneysavingexpert.com/discussion/comment/81912035#Comment_81912035

Not sure about sophisticated. I have found fashion and culture don't mix too well with an engineering mind. I do enjoy a decent red and a spot of classical music now and then….Annuity is in the frame for sure - just not yet.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81914670#Comment_81914670

I meant "sophisticated" more in it's original meaning of being wise. Also applying safety margins and failsafes is second nature to a good engineer and those are good things to carry over to your personal finances.

Ibrahim5

The academic requirements to be an IFA are incredibly low and with no practical skills being required most people should be able to sort out their own finances to a much higher standard than an IFA. Just need to do a bit of study.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81914853#Comment_81914853

I agree with you about the educational standards of many IFAs given the curricula I've seen and some of the people I've met who work in financial services. But there are also intelligent people who work in personal finance and want to do a good job. I do feel that they are seldom worth the fees they charge, but if people want a hand to hold then it might be worth it to them. It's never black or white, however, I suppose I do see many financial service providers as dark grey.

dunstonh

https://forums.moneysavingexpert.com/discussion/comment/81915071#Comment_81915071

IIRC, you have been out of the country since the qualification levels were last increased. Until 1995, there were no qualifications. The industry was dominated by insurance agents. 1995 saw the first qualifications, and vast numbers dropped off at that point. 2013 saw a further increase, followed by another drop-off at the bottom end. Today, there are around 20,000 qualified individuals compared to over 300,000 at its peak in the 90s.

Many advisers sit further and higher qualifications beyond the minimum. As someone who has done that, I will say that for around 95% of clients, those extra qualifications are unnecessary. Personally, I think certain areas of advice should require an extra qualification. Trusts being one. I also think the extra qualifications in pensions should have become mandatory with the introduction of drawdown to the masses, rather than being a niche area. (previously, many firms - mainly networks - that dominated pre-RDR voluntarily refused to do drawdown unless the adviser had higher qualifications, but that fell away when it went mass market - as did the network model, which still exists but is much diminished on the IFA with most networks going FA).

Those of very high net worth with niche financial advice needs will naturally gravitate towards firms with higher-qualified, more experienced advisers.

Bostonerimus1

https://forums.moneysavingexpert.com/discussion/comment/81915283#Comment_81915283

I have looked online at the latest curricula and there's obviously a range given the "levels". My acquaintances in the UK financial industry are indeed old, but the people I've known on the US side of the industry have quite similar motivations. However, I do know a couple of good people who are US CFAs who did the qualification to help them in their small business careers, one is an insurance consultant and the other is an environmental consultant. The full CFA is a tough course, but mostly on shear volume of content, I helped the insurance guy with some of the maths.

There's definitely areas that get very complicated and professional advice becomes necessary. I'd agree with you about trusts and include estate planning, taxation for some and maybe annuities because they use a lump sum and there's no way out once purchased.