Meeting with my IFA and Wealth Manager

username12345678
username12345678 Posts: 280 Forumite
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in Savings & investments
They have requested a joint meeting after I gave notice of my intention to cease our 'partnership' at the end of the year. They are keen to show how they 'add value'

Out of courtesy I agreed and i'll be open minded about what they have to say and if it's compelling i'm fully prepared to change my mind and continue for another 12 months.

If I go on my own i'm comfortable with understanding my own risk tolerance and i'm happy with structuring my own OEIC/IT/ETF portfolio to diversify and match that risk level.

I have a list of questions/challenges for them but I fully expect to get 'tag teamed' so I want to be as prepared as possible to stand my corner (in a non-confrontational way of course). So i'd appreciate drawing on the forums collective brain for a sensible approach to the meeting.
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Comments

  • dunstonh
    dunstonh Posts: 116,296 Forumite
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    edited 13 September 2017 at 10:33PM
    If you dont want the service then dont waste anyone's time. Cancel the meeting.
    it doesnt sound like there is much of a relationship there as you have a low opinion of them and clearly do not value the service. So, be honest and say you no longer want it.
    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.
  • username12345678
    username12345678 Posts: 280 Forumite
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    dunstonh wrote: »
    If you dont want the service then dont waste anyone's time. Cancel the meeting.
    it doesnt sound like there is much of a relationship there as you have a low opinion of them and clearly do not value the service. So, be honest and say you no longer want it.

    I didn't request the meeting - they did.

    As far as the relationship goes I don't have a low opinion of them at all, they are professionals and the WM goes back further than my family tree.

    The question is purely one of whether they can justify the 60% of my pension that I will pay them over 40 years (hopefully). Or put another way - around half of my projected required annual income each and every year.

    It isn't a breakdown in our 'relationship' to challenge them about these and other things - it's just good stewardship of mine and my families future.

    The flip side of that is whether good stewardship is actually employing somebody else to do what you can't - that's an argument I get.
  • dunstonh
    dunstonh Posts: 116,296 Forumite
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    As far as the relationship goes I don't have a low opinion of them at all, they are professionals and the WM goes back further than my family tree.

    Sorry. I interpreted the tone of your post wrongly then. The term strong-armed is one that I thought meant there was a dim view of them.
    The question is purely one of whether they can justify the 60% of my pension that I will pay them over 40 years (hopefully).

    You wont be paying them 60%. That is just taking future money terms and pretending it has todays spending power.

    The flip side of that is whether good stewardship is actually employing somebody else to do what you can't - that's an argument I get.

    If its a long relationship, they may be requesting it to see what the issue is. However, people generally use an IFA becuase it saves them time (which they can then use doing things they enjoy) or because they have complicated affairs or they really just want someone else to do it. If you want to DIY and you enjoy the work you are going to put in and you can do it well, then go with DIY. Most IFAs I know have more work than time. So, whilst they may value longer standing clients and will miss you, your place will be filled quite quickly with someone else. You owe them nothing.
    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.
  • chiang_mai
    chiang_mai Posts: 156 Forumite
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    Your IFA should be charging 0.50% per year to manage existing investments and as much as 3% on new money that's you invest, all of that is separate of course from trading and platform fees which can vary significantly. My trading fees can be as low as one Pound per trade but my platform fees as high as 1% per year, it might help you perhaps to break down that 60% to see what it contains today.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    edited 14 September 2017 at 12:33AM
    I agree with dunstonh's initial comment; politely cancel the meeting. See how you go for a couple of years DIY and you can always go back if it becomes too much effort or worry. Frankly for most people I don't think IFAs, or worse still Wealth Managers, add much value. Set your portfolio up to be easily managed and enjoy the maybe 1% or 2% that you'll save in fees. It will be easy in good times, but you'll need discipline in hard times. FYI I DIYed 25 years in the accumulation phase and averaged 8.5% and have 4 years of DIY in retirement and a simple 70/30 index tracking portfolio that I check on quarterly has produced 10% annual return.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • chiang_mai
    chiang_mai Posts: 156 Forumite
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    I disagree. One of the OP's suppliers has requested a meeting hence they are keen to keep him as a customer. The OP on the other hand is a dissatisfied customer hence it's a perfect opportunity to negotiate his costs down, but to do that he will need to understand in detail what those costs are, as of today.

    FWIW I'd happily pay reasonable fees if I could find an onshore IFA to manage my investments and financial affairs, I can't because I'm non-resident. The OP should not underestimate the amount of time, knowledge and effort required to successfully manage an investment portfolio, through changing times - and with all due respect to the OP's likely many and extensive talents, unless he's a trained IFA or broker he shouldn't over estimate his own brilliance in this area.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
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    chiang_mai wrote: »
    FWIW I'd happily pay reasonable fees if I could find an onshore IFA to manage my investments and financial affairs, I can't because I'm non-resident. The OP should not underestimate the amount of time, knowledge and effort required to successfully manage an investment portfolio, through changing times - and with all due respect to the OP's likely many and extensive talents, unless he's a trained IFA or broker he shouldn't over estimate his own brilliance in this area.

    This is not rocket science. I'd like to reverse your post ...don't overestimate the difficulty or the skills and knowledge required to manage a well constructed portfolio. Most people with a bit of education, some common sense and basic mathematics can do what an IFA would do for them. The most challenging part is to have the discipline to manage money through downturns, IFAs should have an advantage there as they are not as emotionally wedded to your money and might be able to make more rational decisions. So to DIY then you need some firm rules to help you weather the storm.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • chiang_mai
    chiang_mai Posts: 156 Forumite
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    edited 14 September 2017 at 5:07AM
    I agree it's not rocket science but it's also not easy and straight forward. It's OK of course for us to have differing views on this because our respective experience teaches us different things. The only comments I can add to my argument is: a 0.5% fee or even a one time 3% fee is very cheap insurance, because; you don't know what you don't know until it's too late, and; I live in a country where people watch how something is done a few times, copy what they see and then sell themselves as experts, the country is full of people who know how to do things well between 20% and 70%. That's OK perhaps with some things but when it comes to managing your own money it needs careful consideration. But I'm 68 years old and will, of course, take a more cautious view on these things than will a much younger person who can earn enough to replace lost funds. Whatever the OP decides to do I wish him/her well.
  • aroominyork
    aroominyork Posts: 2,821 Forumite
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    chiang_mai wrote: »
    a 0.5% fee or even a one time 3% fee is very cheap insurance
    No reason to pay 3%. The IFA I left a few months ago wanted 3% when I joined him and I negotiated him down to 1%. I am sure plenty of people, especially those with large amounts invested, pay no initial fee.
  • username12345678
    username12345678 Posts: 280 Forumite
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    dunstonh wrote: »
    You wont be paying them 60%. That is just taking future money terms and pretending it has todays spending power.

    If its a long relationship, they may be requesting it to see what the issue is. However, people generally use an IFA becuase it saves them time (which they can then use doing things they enjoy) or because they have complicated affairs or they really just want someone else to do it. If you want to DIY and you enjoy the work you are going to put in and you can do it well, then go with DIY. Most IFAs I know have more work than time. So, whilst they may value longer standing clients and will miss you, your place will be filled quite quickly with someone else. You owe them nothing.

    The 60% was a rough ballpark based on 40 years and 1.5%pa in fees.

    The meeting isn't really about me directly I suspect. I'm one of many (50+ or so) who know each other and are working with only a couple of IFA's.

    chiang_mai wrote: »
    I disagree. One of the OP's suppliers has requested a meeting hence they are keen to keep him as a customer. The OP on the other hand is a dissatisfied customer hence it's a perfect opportunity to negotiate his costs down, but to do that he will need to understand in detail what those costs are, as of today.

    The OP should not underestimate the amount of time, knowledge and effort required to successfully manage an investment portfolio, through changing times - and with all due respect to the OP's likely many and extensive talents, unless he's a trained IFA or broker he shouldn't over estimate his own brilliance in this area.

    This isn't a 'bash the IFA and WM' thread.

    They do a vital job for the vast majority who do not want the responsibility of managing their own investments.

    The question for me personally is 'Can I do the job, enjoy it, and most importantly, have a positive expectation of results versus having it managed for me over the next 4 decades?'
    aroominyork wrote: »
    No reason to pay 3%. The IFA I left a few months ago wanted 3% when I joined him and I negotiated him down to 1%. I am sure plenty of people, especially those with large amounts invested, pay no initial fee.

    I didn't pay an initial fee and the total comes in at around 1.3%pa plus fund fees.
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