Financial Advisors cagey
Comments
-
Does taking 5% of the fund when there is no need add value? At the very least, it should have been discussed with the OP so that they can make their own mind up whether they want advice, even though they are not required to. It's fairly apparent that the OP isn't experienced in this area so taking advantage of this is simply not ethical.
That may well come up during the initial free meeting when the conversation is longer than a couple of minutes on the phone.
And as you say, it is apparent that the OP isn't experienced in this area and therefore advice would seem a good idea.Does taking 5% of the fund when there is no need add value?
Could well do (although 5% is a high). If an alternative is decided to be more suitable as its half the annual cost, then the initial advice charge is recovered quickly and can go on to save money. If methods of withdrawal are discussed there could be tax savings of many thousands more than the fee for advice. The whole point of the initial free meeting is to go find out if it is equally beneficial to move forward with a business relationship/transaction before any costs are incurred.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.0 -
I think this underlines that a little financial education and some personal responsibility and DIY is by far the best approach to managing finances for most people. No one will take better care of your money than you. Posts on here show that there are lots of dissatisfied customers out there......of course they are probably more likely to post here and complain than the happy customers. However, there have been independent reports about the vast amount of inappropriate advice given by financial advisors.
So before you spend money on financial advice make the effort to see if you can DIY, you'll definitely get better service and in many cases better advice too.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
I think this underlines that a little financial education and some personal responsibility and DIY is by far the best approach to managing finances for most people.
a little bit of knowledge can be a dangerous thing. Some really bad decisions are made on snippets of info.No one will take better care of your money than you.
Only if the person is willing to put time and effort into it. Most dont and some of the outcomes are dire.Posts on here show that there are lots of dissatisfied customers out there......of course they are probably more likely to post here and complain than the happy customers.
You dont measure quality by the tiny number of issues that exist.
Many of the issues we see on this site are also self inflicted and not because of anyone else.However, there have been independent reports about the vast amount of inappropriate advice given by financial advisors.
Care to link to one? (as we are not seeing those sorts of reports in the UK. Maybe you are referring to reports to where you are based in the US)
Complaint stats at the FOS showed IFAs had just 1678 complaints last year. Despite handling millions of transactions. 365 of those were against administration rather than advice.
if there were "vast" numbers of issues, surely the complaints stats would reflect that?
There are odd issues here and there but very small volume stuff.So before you spend money on financial advice make the effort to see if you can DIY, you'll definitely get better service and in many cases better advice too.
But equally, you could mess it up completely or pay or lot more in charges.
I have said it many many times. If you can DIY well then you can save money. if you DIY badly, it can be a costly mistake. you cant assume that DIY is an automatic route to success for everyone.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.0 -
Like I've said before, to know the advice was bad, you'd need to understand it was bad and that another option would have been better. Customers who have the ability to make that judgement wouldn't have needed the advice in the first place!Complaint stats at the FOS showed IFAs had just 1678 complaints last year. Despite handling millions of transactions. 365 of those were against administration rather than advice.
if there were "vast" numbers of issues, surely the complaints stats would reflect that?
We do repeat ourselves a lot of this board don't weI have said it many many times. If you can DIY well then you can save money. if you DIY badly, it can be a costly mistake. you cant assume that DIY is an automatic route to success for everyone.
On another note I don't really like "DIY" as a term for not taking financial advice. To me, DIY would be buying and manage a portfolio of shares, bonds etc. That's real DIY. People who buy funds, so paying fund managers to make share buying decisions etc, aren't really DIY'ing and people who use robo eg in a personal pension or workplace pension with default options certainly aren't!
Bit like paying someone to wallpaper your living room and calling it DIY, just because you didn't get an interior designer to advise you what wallpaper/colours would go best!0 -
I have said it many many times. If you can DIY well then you can save money. if you DIY badly, it can be a costly mistake. you cant assume that DIY is an automatic route to success for everyone.
We agree about this main point that if you DIY you can save money in fees, and that you obviously have to do it well and not mess things up. My contention is that most people can do it perfectly well themselves with a little education and self belief.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
bostonerimus wrote: »My contention is that most people can do it perfectly well themselves with a little education and self belief.
I've worked in the same field all my working life. Still the same issues arise over and over again. People always think that they know better. Based on a limited amount of knowledge or experience. That's the the cyclical nature of life.0 -
bostonerimus wrote: »We agree about this main point that if you DIY you can save money in fees, and that you obviously have to do it well and not mess things up. My contention is that most people can do it perfectly well themselves with a little education and self belief.
It's one thing DIYing with £30k, it's another thing entirely doing it with £300k/400k/500k when it's your primary source of pension income and you've got no prior experience of investing.0 -
I can't reply to each point from each contributor, but thank you for the comments. With one of the FAs, I actually spoke to, firstly, an Administrator, who took all my information, and who then passed me to the FA, who asked me the same questions. I can see both sides of the question now that people have responded.
Yes, I did ask for advice but had absolutely no idea that for what seems to be a simple transaction (ie take tax-free 25%, the rest into an annuity or drawdown scheme) that the fees would be so high. I assumed perhaps a couple of hundred pounds, but there, I am naive. Especially if I end up just putting the money back with my pension provider, as they seemed to come out on top when I did a search for the best rates for annuities.
Personally, I would have thought that they would include it the the warning they are always give on the phone (ie when they say "We are obliged to tell you that figures can go down as well as up...etc etc' that sort of thing). Nothing was said like, 'We are obliged to tell you that for pensions under 30,000 pounds you are not obliged to use an FA but it may be advisable for you to do so'. I would certainly have remembered that!
The very fact that I was not au fait with pensions does make me pretty vulnerable, and that this guy was trying to get me to sign something that he sent me really quickly so that he could deal direct with my pension company made me a bit wary, before I'd even had a chance to think about what he'd sent me. So the person who suggested that the client's best interests should be taken into consideration is something that I agree with. After all, 1400 pounds is a considerable amount of money, to me, anyway, as I get less income than that a month, even if it is 'hidden' and taken out of my income before I get it.0 -
It's one thing DIYing with £30k, it's another thing entirely doing it with £300k/400k/500k when it's your primary source of pension income and you've got no prior experience of investing.
The asset allocation might be a bit different, but the principles remain the same. The major difference is tax planning, but if we ignore that I think it's easier to invest 500k than 30k.
If you start with 30k and educate yourself along the way, by the time you have a few million you'll probably know what to do.......or more importantly what not to do.“So we beat on, boats against the current, borne back ceaselessly into the past.”0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173.1K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards