Finding an IFA you can trust...

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Matt002
Matt002 Posts: 82 Forumite
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in Savings & investments
Over the last 6 months or so I have met two IFAs from unbiased / vouched for. Sadly they both reminded me of shiny suited second hand car sales men that are purely driven by their own profit rather than whats right for me. Or at least thats the impression I get, I certainly don't trust them with the 150k I have to invest. An opening gambit where you say how massive your house is and expensive your car is doesn't work for me.

They both said they were whole of market and independent but then start talking about things from some other company that their advice comes from. One of which was called 2plan which had various funds based on different risk levels. What is the IFA doing in this situation apart from taking 3pc of my investment up front and 1pc a year to talk to 2plan?

I get the feeling I'm missing something so don't flame me, I really would just like to know what they do as the explanation I got from them was more than vague.
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  • eskbanker
    eskbanker Posts: 31,076 Forumite
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    The way I read the http://2plan.com/ website is that they are a firm of IFAs rather than product providers, was the IFA you spoke to one of their employees/representatives rather than an arms-length freelancer?

    And although IFAs are bound to offer advice in the customer's interests, they are ultimately earning a living from the fees you pay, so they do have something of a vested interest and personally I think you should expect a salesperson/customer relationship rather than hoping for them to act out of pure altruism. Obviously they should abide by codes of conduct and so on though....

    I'd suggest that you speak to some more until you find one that you can strike up some rapport with and where you feel comfortable with what you'd get for your money.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    I'd limit interaction with an IFA to one time bits of advice and planning. I would never employ one on an ongoing basis as I feel that a sensibly constructed portfolio of low cost trackers can be easily managed by anyone.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • Matt002
    Matt002 Posts: 82 Forumite
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    Thanks chaps.

    It would appear he is a representitive of 2plan! I think I was thinking these guys would be more like consultants you use on a fee basis in a similar way you would engage a structural engineer etc.

    I do have another one lined up for next week but after some reading he seems to be a rep for intrinsic so I assume will be similar.

    Boston, how do you find one willing to do that?
  • dunstonh
    dunstonh Posts: 116,385 Forumite
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    It would appear he is a representitive of 2plan!

    so. a sales rep and not an IFA. Maybe that is why you got the sales approach.

    You mention of whole of market. That is a phrase also used often by FAs rather than IFAs. i.e. they say whole of market to hide their restrictions.
    I do have another one lined up for next week but after some reading he seems to be a rep for intrinsic so I assume will be similar.
    Intrinsic is a restricted network. not IFAs.

    If you want an IFA, you are best contacting an IFA and not FAs.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Matt002
    Matt002 Posts: 82 Forumite
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    Dunstonh, thats what I was trying to do. How was I supposed to know they are FAs if their website, vouched for and unbiased all say they are IFAs?

    They all say they cover the whole of market.

    Do I just trawl their websites and ensure it doesnt mention representitive in the small print?
  • Sue58
    Sue58 Posts: 288 Forumite
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    It's the same as any trade there are always going to be good and bad! But I do know people that are perfectly happy with their IFA's.
  • DiggerUK
    DiggerUK Posts: 4,992 Forumite
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    zzr-matt wrote: »
    ......I get the feeling I'm missing something so don't flame me.....
    Doubting the abilities of advisors who act like sexed up sales reps, usually gets a very high and mighty response from 'the usual suspects' here......don't worry, many here will accept that your reservations are more than justified.
    You don't sound like an idiot, so what is the problem in accepting you can manage your own financial affairs. I was once told....."seek advice wherever you can, but at the end of the day, hold your own counsel" Words that have served me well.
    Here is as good a place as any to seek advice, and it's free! 150k is a goodly amount, but not so massive as to be impossible to manage yourself.
    If you could let posters know what you have done with it to date, and were you want to end up eventually, you'll find many ideas coming your way. Best of fortune..._
  • aroominyork
    aroominyork Posts: 2,827 Forumite
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    I have been through similar. I have had three IFAs over the years and all have turned out dire for one reason or another, which is why I have just started self-managing my investments.

    The term IFA is a misnomer. Independent? They are often restricted to one form of investment or another. My last IFA would assess your risk and put you in one of the six portfolios they constructed. In pub terms they are tied houses not free houses. Financial? Only to a degree! I asked for advice about investing in property and was told they could not advise me on that – they only do stocks. Adviser? As already said … salesman!

    I also think their way of assessing risk appetite is inherently flawed. You fill in a load of questions but they do not give you any context by informing you of how markets move over long or short periods of time. So you answer whether you would mind losing capital for the chance of earning higher returns, but without them priming you to understand the difference between a 10 year and 30 year investment period that is meaningless.

    If an IFA has a limited number of funds for you to choose from, get clear graphs/data about how they have performed over a long period of time after accounting for fees, and then compare to Vanguard LifeStrategy that bostonerimus favours. You might find that a low cost tracker will do for you.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    zzr-matt wrote: »

    Boston, how do you find one willing to do that?

    Bear in mind I'm in the USA so the landscape is a bit different. I DIY my investments and I think most people with a little common sense can do that. I do not use financial advisers at all.

    If you actually find an IFA rather than someone trying to sell you an investment scheme they should be happy to work with you however you want. If they are not then move on.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • HappyHarry
    HappyHarry Posts: 1,588 Forumite
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    zzr-matt wrote: »
    Dunstonh, thats what I was trying to do. How was I supposed to know they are FAs if their website, vouched for and unbiased all say they are IFAs?

    They all say they cover the whole of market.

    Do I just trawl their websites and ensure it doesnt mention representitive in the small print?

    If they say they are IFAs on their website, and they turn out not to be, report them.

    All the good IFAs out there really want the charlatans kicked out of the business for good.

    Good IFAs are worth every penny. Assuming, of course, that you want to employ them for their planning skills.

    If you are just looking for a fund picker, then you are unlikely to get full value for your money.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
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