What will a financial adviser do for me?
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Don't. Banks are the worst distribution channel. Both on reputation and quality.
Don't worry - I will take everything he/she says with a grain of salt. I am literally just going to use it as a mining exercise to see how to go about even buying into funds, etc.
Many of you very kind folk have mentioned paralysis by analysis. This is true. The reading I'm doing seems to provide 3 questions for every point I understand (Investing For Dummies is no better, it goes into history but not much use about the present. I digress).
As a starting point is this a useful mix (cash will also be held in addition to these funds):
1. 80% of investment money in a global index tracker
2. 20% in a bonds fund specialising in high quality low duration bonds (to protect against inflation)?
3. IF I keep it this simple I can dispense with an advisor...Right?
If so I will find out how to go about it! :rotfl:0 -
Don't worry - I will take everything he/she says with a grain of salt. I am literally just going to use it as a mining exercise to see how to go about even buying into funds, etc.
Many of you very kind folk have mentioned paralysis by analysis. This is true. The reading I'm doing seems to provide 3 questions for every point I understand (Investing For Dummies is no better, it goes into history but not much use about the present. I digress).
As a starting point is this a useful mix (cash will also be held in addition to these funds):
1. 80% of investment money in a global index tracker
2. 20% in a bonds fund specialising in high quality low duration bonds (to protect against inflation)?
3. IF I keep it this simple I can dispense with an advisor...Right?
If so I will find out how to go about it! :rotfl:
You don't even need 1 & 2, you can choose a multi-asset fund that will do that for you. You can choose a fund that maintains a strict equity to bond ratio or one where the ratio is manged to a risk rating and will vary over time.0 -
1. 80% of investment money in a global index tracker
2. 20% in a bonds fund specialising in high quality low duration bonds (to protect against inflation)?
3. IF I keep it this simple I can dispense with an advisor...Right?
If so I will find out how to go about it! :rotfl:
You might be surprised to learn I thoroughly disagree with you. My view is that 95% of the potential value of independent financial advice lies outside the selection of funds. My beef with the FA industry is that they instead portray themselves, or allow Joe Public to imagine, that most of their value lies in selecting funds. It doesn't help that a convenient pricing model is to charge consumers based on the value of their funds under management rather than some other traceable measure of the work they need to perform and make margin on.
So, if you were to jettison 1&2 from their purview, then you'd get to understand the real value they might provide in your personal circumstances versus the fees they'd charge you for help.0 -
TheTracker wrote: »You might be surprised to learn I thoroughly disagree with you. My view is that 95% of the potential value of independent financial advice lies outside the selection of funds. My beef with the FA industry is that they instead portray themselves, or allow Joe Public to imagine, that most of their value lies in selecting funds. It doesn't help that a convenient pricing model is to charge consumers based on the value of their funds under management rather than some other traceable measure of the work they need to perform and make margin on.
So, if you were to jettison 1&2 from their purview, then you'd get to understand the real value they might provide in your personal circumstances versus the fees they'd charge you for help.
To be fair this is true. A good adviser will freely admit they don't have a crystal ball. I see an ifa as a sounding board for when I have higher levels of assets and need more complex advice0 -
Fatbritabroad wrote: »To be fair this is true. A good adviser will freely admit they don't have a crystal ball. I see an ifa as a sounding board for when I have higher levels of assets and need more complex advice
It is correct. IFAs do study and are tested to show they have a level of knowledge on investments which does include various models etc. However, most IFAs will buy in the research, data, analysis that is used in their recommendation. So, there is still structure and detail in the recommendation that a made up/random allocation will not have.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 -
TheTracker wrote: »You might be surprised to learn I thoroughly disagree with you. My view is that 95% of the potential value of independent financial advice lies outside the selection of funds. My beef with the FA industry is that they instead portray themselves, or allow Joe Public to imagine, that most of their value lies in selecting funds. It doesn't help that a convenient pricing model is to charge consumers based on the value of their funds under management rather than some other traceable measure of the work they need to perform and make margin on.
So, if you were to jettison 1&2 from their purview, then you'd get to understand the real value they might provide in your personal circumstances versus the fees they'd charge you for help.
This does make sense. Because if I am invested in passive funds and very happy to be passive and not switch between funds ever (as I'll never have the knowledge to have edge on which funds will perform better in the shorter term) then these will (hopefully) be self-executing in that managers will reinvest proceeds. Which then begs the question as to why a FA would also be getting a cut of my assets when he's not really adding anything additional to the process.
I can see that their expertise in overall financial planning - including allocating my mix to my objectives - could well be very valuable indeed. And they'd also tell me about SIPPS which, at this juncture, I know nothing about other than that they are pensions.
But DO they work on a consultant basis, like solicitors, since their remuneration methods have changed? As in, "Hello Mr FA do you do hourly appointments and what is your charge-out rate?"
Because if an FA is truly independent I would benefit greatly from this including the very basics of how to go about getting started. I'm finding this terrifying but I can't keep letting my inheritance dwindle away.0 -
This does make sense. Because if I am invested in passive funds and very happy to be passive and not switch between funds ever (as I'll never have the knowledge to have edge on which funds will perform better in the shorter term) then these will (hopefully) be self-executing in that managers will reinvest proceeds. Which then begs the question as to why a FA would also be getting a cut of my assets when he's not really adding anything additional to the process.
You say they are not adding to the process. However, that is an incorrect assumption. For example, after charges, our portfolio that matches closest to VLS60 in risk has outperformed VLS60. You should not assume that cheaper is better (or that more expensive will be either)ut DO they work on a consultant basis, like solicitors, since their remuneration methods have changed? As in, "Hello Mr FA do you do hourly appointments and what is your charge-out rate?"
Some will. Some wont. The term IFA covers many different business models.Because if an FA is truly independent I would benefit greatly from this including the very basics of how to go about getting started.
IFAs have to be independent. FAs do not.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 -
If an IFA is advising a client with a steer towards his firm's own funds management, how does he avoid the appearance of bias?
This isn't directed at your practice dunstonh but to my husband's choice of IFA who brushed off my question about the past performance of his firm. No portfolio materials published on his website since 2015 either.0 -
patricia1066 wrote: »If an IFA is advising a client with a steer towards his firm's own funds management, how does he avoid the appearance of bias?
This isn't directed at your practice dunstonh but to my husband's choice of IFA who brushed off my question about the past performance of his firm. No portfolio materials published on his website since 2015 either.
If a firm has its own funds then he's not an ifa, you were dealing with a fa. Most ifas are small firms with a few employees.
Who were you dealing with?0 -
What about something like St James place.? Aren't they Ifa s who have their own branded funds but can they offer others? Genuine question I don't know much about them I just see a lot of negative press about them on here0
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