IFA - first time user

felinefancy · 19 August 2018 at 1:21PM

Hello,

Thanks for your patience - I've posted several times today!

Bit stuck today with thoughts about our future. Is it worth seeing a financial adviser to help us decide what to do with any savings and investments we have and just to help guide us along the over 50s path.

Are there such things as initial, useful, free advice sessions?

Thanks again!

Effy.

dunstonh · 19 August 2018 at 1:58PM

Is it worth seeing a financial adviser to help us decide what to do with any savings and investments we have and just to help guide us along the over 50s path.

Using a professional in financial advice is no different from using a professional in any area. The choice is either use a professional or DIY. If you can DIY well, then you can save money. if you DIY badly it can be costly.

Your thread title says IFA but your question just uses FA. It is important that your choice should be DIY or IFA. An FA should not be used. FAs mean the advice is restricted in some way. Sometimes the restrictions may not be much. However, usually, it is a product and investment selection that restricts it. Sometimes down to a panel but often down to just one provider. That would make the FA effectively a sales agent of that provider. Whilst I feel sorry for those advisers with a tiny number of restrictions, for bundling you with the sales reps, you made your choice. You didnt have to restrict. You didnt do it for your client's benefit. You did it for you own. So, DIY or IFA is the choice.

IFAs are financial planners and investment class advisers. There is no point asking an IFA about savings rates. It happens and all we would do is look at the tables on MSE or similar.

Are there such things as initial, useful, free advice sessions?

The first meeting with an IFA is free. However, don't expect advice in the first meeting. It will be a getting to know you and finding out if there is common ground and a need and desire for the service.

coyrls · 19 August 2018 at 2:04PM

The answer to whether it is worth seeing an IFA is pretty much whether you would fit an IFA’s idea of a good customer. You need to have a minimum amount to make it worthwhile for an IFA and cost effective for you. I would suggest you need to be well in the six figure territory before it becomes sensible to consult an IFA.

You can always get a free session with an IFA bit it won’t be a free advice session it will be a session for the IFA to understand you circumstances so that they can make a proposal to you and so that you can make a judgement about whether you want to give your business to the IFA.

Computer_Beginner · 19 August 2018 at 9:04PM

Personally, I wouldn't use an IFA.
These days 99pc of the information they can provide is already online somewhere.

I can't fix my roof or my car myself, because I don't have the labour, skills or tools to do so. Whereas most people can look something up online and educate themselves.

Also, I've heard that IFAs can be quite restricted (due to indemnity) in what they can actually advise.
I've read they can be quite limited in their advice regarding benefits and tax etc. Understandable, given that they're not accountants or tax advisors, but in the real world all these things interact.

I should stress I've never actually spoken to anyone in real life who has used an IFA. I'd get some pretty strange looks if I did ask such a thing. It's all based on what I've read online.

jimjames · 19 August 2018 at 9:41PM

Computer_Beginner wrote: »

I can't fix my roof or my car myself, because I don't have the labour, skills or tools to do so. Whereas most people can look something up online and educate themselves.

Not really a great comparison when you can look up instructions to repair pretty much any car on YouTube and Google. Probably easier to do than trying to work out tax implications and asset allocation as well as best investment products. Fine if you have the mindset but as with repairing cars, sometimes best to let others do so

fred246 · 19 August 2018 at 9:48PM

IFAs are good for rich people who are unable to read. Problem is they won't be able to read my post.

Computer_Beginner · 19 August 2018 at 10:23PM

jimjames wrote: »

Not really a great comparison when you can look up instructions to repair pretty much any car on YouTube and Google. o

But I'd need tools, workspace and probably someone else to help me.

dunstonh · 19 August 2018 at 10:29PM

These days 99pc of the information they can provide is already online somewhere.

Problem is that 99% (as we are making up statistics) of information online can be out of date or wrong.

Also, I've heard that IFAs can be quite restricted (due to indemnity) in what they can actually advise.

An IFA cannot be restricted. You are mixing up the two types. Restricted IFAs have restrictions. IFAs cannot have restrictions otherwise they become FAs. The rules on this were tightened back in 2013 (prior to that you could have certain limited restrictions).

I've read they can be quite limited in their advice regarding benefits and tax etc. Understandable, given that they're not accountants or tax advisors, but in the real world all these things interact.

IFAs tend to know what they need to know about benefits. There can be a weakness with benefits that an IFA would not need to know about. But they are not benefits advisers. People on universal credit tend not have a need for an IFA (caveats apply)

IFAs interact with accountants where required. Each having its own remit but slight overlap.

I should stress I've never actually spoken to anyone in real life who has used an IFA. I'd get some pretty strange looks if I did ask such a thing. It's all based on what I've read online.

Which backs up the point about what you reading online is not always true, correct or up to date.

Computer_Beginner · 19 August 2018 at 11:17PM

dunstonh wrote: »

Problem is that 99% (as we are making up statistics) of information online can be out of date or wrong.

An IFA cannot be restricted. You are mixing up the two types. Restricted IFAs have restrictions. IFAs cannot have restrictions otherwise they become FAs. The rules on this were tightened back in 2013 (prior to that you could have certain limited restrictions).

IFAs tend to know what they need to know about benefits. There can be a weakness with benefits that an IFA would not need to know about. But they are not benefits advisers. People on universal credit tend not have a need for an IFA (caveats apply)

IFAs interact with accountants where required. Each having its own remit but slight overlap.

Which backs up the point about what you reading online is not always true, correct or up to date.

Yes, those are all good points.

I think an IFA may add value to some people, who have already educated themselves about the basics (eg asset classes and allocations etc).

I wouldn't see an IFA as replacing personal education, but they could be useful for discussing existing ideas / questions with etc.

I think on a more basic level, there are cultural issues regarding financial education in the UK.

For example, I read a lot of posts where people just jump into assuming that BTL is a good idea, without even considering shares and funds etc.

I received no financial education at all in school. You can leave school at 18 in the UK without even knowing that the stock market exists or what fiat currency is.

IFA - first time user

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