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    • MSE Archna
    • By MSE Archna 20th Oct 06, 10:54 AM
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    MSE Archna
    Do You Need Financial Advice? When To Get It, When Not To Get It Discussion Area
    • #1
    • 20th Oct 06, 10:54 AM
    Do You Need Financial Advice? When To Get It, When Not To Get It Discussion Area 20th Oct 06 at 10:54 AM

    This thread is specifically to discuss the content of the

    Do You Need Financial Advice? When To Get It, When Not To Get It Article

    To discuss or ask a question about the article: click reply
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Page 12
  • Daniel Elkington
    If you consider the average hourly rate for an IFA is about 200 per hour, this means that you are getting 65 hourse out of said IFA.

    Additionally the 0.5% on-going is the most worrying as this amounts to 2,500 per annum. You best be getting some pretty good service for this.

    For contrast our Wealth Management package involves 2 annual meetings, quarterly valuations, daily fund reviews, annual tax statement, annual tax planning, rebalancing when necessary, 24 hour turnaround on enquiries and costs 100 per month.

    Unfortunately - a lot of advisers are still not quite up to speed with things and haven't realised that charging % based fees are out-dated and unfair.
    • dunstonh
    • By dunstonh 2nd Dec 13, 9:37 AM
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    dunstonh
    Unfortunately - a lot of advisers are still not quite up to speed with things and haven't realised that charging % based fees are out-dated and unfair.
    That isnt a fair comment. Whilst percentages can lead to high charges if uncapped or if there are no tiers, your fixed charge could also lead to high charges on smaller cases. For example, my percentage charge on 150k is lower than your fixed monthly charge. Yet you say the percentage charge is unfair.

    It would also depend on your business model. Whilst some IFA firms will focus on high net worth. Others will focus on the mainstream. Different models can suit different charging methods. Where you sometimes get these pricing anomalies is where you get someone who is high net worth going to a mainstream firm and not getting an appropriate reduction or someone with a smaller amount going to a high net worth firm and paying over the odds for a service not geared for them.

    The initial charge in this case is far too high. The annual ongoing is right on the benchmark of what you would expect. Yes you can get it cheaper. You could get it more expensive probably too. However, the 0.5% is typical. The initial 3% is greedy.

    It doesn't matter if the fee is portrayed as a percentage or a fixed amount. As long as it is disclosed and the amounts are reasonable, the actual method is largely irrelevant.
    Last edited by dunstonh; 02-12-2013 at 9:40 AM.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • RPK
    Good Value?
    I use an IFA to look after my 300k portfolio which I have amassed to provide me with additional retirement income. It is invested in mainstream companies such as JPM, Standard Life, Invesco and is operated via a platform. How much should I be paying in fees? At present the charges are 1 for every 3 of income I receive, which seems a lot easier money for the IFA than it took me to earn and save this nest egg.
    • bigadaj
    • By bigadaj 8th Jan 14, 9:16 PM
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    bigadaj
    I use an IFA to look after my 300k portfolio which I have amassed to provide me with additional retirement income. It is invested in mainstream companies such as JPM, Standard Life, Invesco and is operated via a platform. How much should I be paying in fees? At present the charges are 1 for every 3 of income I receive, which seems a lot easier money for the IFA than it took me to earn and save this nest egg.
    Originally posted by RPK
    That sounds an odd way to charge, what is the actual figure as this needs to be disclosed. Say you get 4% yield and this is you effective income then that gives you 12k a year and 4k for the ifa which sounds very expensive.

    He may be getting reduced charges on the funds selected but it still is potentially a lot, the actual extra work in managing a larger fund isn't a lot more than a smaller one, I'd want him to seriously justify any charges much above 1500 a year assuming you've paid for the initial set up.
    • dunstonh
    • By dunstonh 9th Jan 14, 9:11 AM
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    dunstonh
    I use an IFA to look after my 300k portfolio which I have amassed to provide me with additional retirement income. It is invested in mainstream companies such as JPM, Standard Life, Invesco and is operated via a platform. How much should I be paying in fees? At present the charges are 1 for every 3 of income I receive, which seems a lot easier money for the IFA than it took me to earn and save this nest egg.
    Originally posted by RPK
    I have never come across that charging method before. Typically, ongoing servicing is paid for as a percentage of the assets held. On 300k, a figure of 0.5% would be likely to be most typical.

    One assumes that annual events like bed & ISA are taking place (i.e. you use your annual ISA allowance) along with rebalancing?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Savvy amateur
    • By Savvy amateur 16th Jan 14, 8:41 PM
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    Savvy amateur
    My husband is coming up to retirement and has a pension pot of around 80k, we also have an investment with prudential, which has done very well in the last 5 yrs and is about to come to the end of its guarantee period. We have an option of continuing with it and its prediction is 6.2% pa with guarantee of full amount back after 10 yrs. Management fees, plus guarantee fees means we will be paying 2% to the pru. We should have enough income to live on without touching this. We have no other investments, so do we really need to pay a wealth management fund with an ongoing charge, or would a FA with a one off fee be a better option?
    • dunstonh
    • By dunstonh 16th Jan 14, 10:19 PM
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    dunstonh
    My husband is coming up to retirement and has a pension pot of around 80k, we also have an investment with prudential, which has done very well in the last 5 yrs and is about to come to the end of its guarantee period. We have an option of continuing with it and its prediction is 6.2% pa with guarantee of full amount back after 10 yrs. Management fees, plus guarantee fees means we will be paying 2% to the pru. We should have enough income to live on without touching this. We have no other investments, so do we really need to pay a wealth management fund with an ongoing charge, or would a FA with a one off fee be a better option?
    Originally posted by helcor
    Transactional i would think on that basis. Not servicing.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • grizzly1911
    • By grizzly1911 16th Jan 14, 10:52 PM
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    grizzly1911
    My husband is coming up to retirement and has a pension pot of around 80k, we also have an investment with prudential, which has done very well in the last 5 yrs and is about to come to the end of its guarantee period. We have an option of continuing with it and its prediction is 6.2% pa with guarantee of full amount back after 10 yrs. Management fees, plus guarantee fees means we will be paying 2% to the pru. We should have enough income to live on without touching this. We have no other investments, so do we really need to pay a wealth management fund with an ongoing charge, or would a FA with a one off fee be a better option?
    Originally posted by helcor
    Do you wish to to stay with the Pru? Are you happy with the return? What sort of magnitude is it? (I accept there is a guarantee element).

    When you say pension pot what do you mean? How will that pot be used?

    You may feel you have sufficient income now but what about 5 years from now?

    I am not disagreeing with dunston. Just wondering what you are looking to get out of the review?
    Last edited by grizzly1911; 16-01-2014 at 10:56 PM.
    "If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....

    "big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham
    • dunstonh
    • By dunstonh 17th Jan 14, 8:44 AM
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    dunstonh
    I am not disagreeing with dunston. Just wondering what you are looking to get out of the review?
    No, you are right. For example, the Pru policy wont be an ISA. So, annual bed & ISA could be possible as part of the servicing. So, servicing could add value. Just not perhaps to the same extent as a bespoke portfolio would need.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • bill the bus
    • By bill the bus 15th Feb 14, 9:51 AM
    • 477 Posts
    • 1,044 Thanks
    bill the bus
    full financial advice needed
    Hi. We are a transition part of our lives. We are in our mid fifties and both our girls are now living independant. We are taking a big risk but one we feel is worthwhile. We have sold our house and are leaving our jobs in a couple of months, both public sector. We intend to spend the foreseeable future touring the UK in our caravan and travelling abroad over the winter period, eventually settling when we are ready.

    We will have around 50k from the house sale to invest and both have work pensions, i have 3 different ones and my wife also has a private pension. We also have a small endowment which matures in 3 years. We are looking for an IFA to advise on all aspects of our money lives as to which way to best invest and to tie our pensions together.

    Which type of IFA would i be best using
    • Archi Bald
    • By Archi Bald 15th Feb 14, 9:59 AM
    • 9,376 Posts
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    Archi Bald

    Which type of IFA would i be best using
    Originally posted by bill the bus
    An independent one. Always choose an independent one for best advice.
    • dunstonh
    • By dunstonh 15th Feb 14, 10:12 AM
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    dunstonh
    An independent one. Always choose an independent one for best advice.
    Originally posted by Archi Bald
    There is a trend away from IFA status at the moment. Partly driven by liability cost and partly driven by the FCA having a tighter via on what IFA means compared to the FSA. There are increasing numbers of IFAs dropping advice in a small number of areas (such as unregulated collectives, VCTs etc - all the high risk niche stuff that the majority of the population never use) but remaining whole of market in all the other retail areas. So, don't rule out an adviser that is restricted but has no restrictions in the area you deal with.

    We are looking for an IFA to advise on all aspects of our money lives as to which way to best invest and to tie our pensions together.

    Which type of IFA would i be best using
    Basically any IFA or restricted adviser with no restrictions in conventional investments. You may find the amount is below what many advisers typically deal with and that could lead to some giving high charges (i.e. if you pick a firm that typically deals with 250k plus investments, you may well find pricing that is good for 250k but really high for 50k). So, cost is the main thing to look at.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Johnbax
    IFA no longer an IFA
    My IFA tells me he is no longer an IFA but has 'aligned his business' with St James's Place Wealth Management, and passed the administration of my business to some outfit in Scotland called Policy Services. PS are apparently an IFA, but they won't be offering me any advice, just presumably doing whatever my ex-IFA tells them to do with my investments. The ex-IFA, though, thinks he's still going to be my financial advisor ('the very best financial advice available').

    Are PS in fact now my IFA? Can I be transferred to a new IFA without agreeing to this? I am confused. This is not what I signed up to.

    Since being informed of this change in October ('I will be in touch shortly') I have heard nothing from either the ex-IFA or Policy Services. Obviously these are questions I should ask him, but before I do so I would be very grateful for any comments from those who may have a better grasp of the situation than I do.
    • bigadaj
    • By bigadaj 18th Feb 14, 8:31 AM
    • 10,828 Posts
    • 7,162 Thanks
    bigadaj
    My IFA tells me he is no longer an IFA but has 'aligned his business' with St James's Place Wealth Management, and passed the administration of my business to some outfit in Scotland called Policy Services. PS are apparently an IFA, but they won't be offering me any advice, just presumably doing whatever my ex-IFA tells them to do with my investments. The ex-IFA, though, thinks he's still going to be my financial advisor ('the very best financial advice available').

    Are PS in fact now my IFA? Can I be transferred to a new IFA without agreeing to this? I am confused. This is not what I signed up to.

    Since being informed of this change in October ('I will be in touch shortly') I have heard nothing from either the ex-IFA or Policy Services. Obviously these are questions I should ask him, but before I do so I would be very grateful for any comments from those who may have a better grasp of the situation than I do.
    Originally posted by Johnbax
    Their wensite says that they are aligned with st James place, so expect some lovely literature and heavy fees.

    It's your money at the end of the day, so the choices are to manage it yourself, carry on as you are or go elsewhere.

    I'd at least want a clear and detailed list of their fees as Sjp are known to charge harder Than an annoyed rhino.

    I'd also look on unbiased.com and speak to another couple of guys in your area Mking sure sponsored ads are turned off.
    • gadgetmind
    • By gadgetmind 18th Feb 14, 8:35 AM
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    gadgetmind
    Since being informed of this change in October ('I will be in touch shortly') I have heard nothing from either the ex-IFA or Policy Services. Obviously these are questions I should ask him, but before I do so I would be very grateful for any comments from those who may have a better grasp of the situation than I do.
    Originally posted by Johnbax
    It seems odd that he hasn't been in touch as I'd expect him to be trying to move you over to SJP. Their fees will be higher but they will hint at (but not put in writing) better long term returns.

    You need to take control of your investments, either by doing it yourself, or by finding a good IFA.

    Here and monevator.com are good places if you choose the former, and unbiased for the latter.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
    • dunstonh
    • By dunstonh 18th Feb 14, 8:49 AM
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    • 66,989 Thanks
    dunstonh
    My IFA tells me he is no longer an IFA but has 'aligned his business' with St James's Place Wealth Management, and passed the administration of my business to some outfit in Scotland called Policy Services. PS are apparently an IFA, but they won't be offering me any advice, just presumably doing whatever my ex-IFA tells them to do with my investments. The ex-IFA, though, thinks he's still going to be my financial advisor ('the very best financial advice available').
    You are either restricted or an IFA. He cant tell a third party what to do. Now, restricted is increasingly common. Many IFAs are dropping to restricted. Restricted can mean attached to one provider (this is the worst option) or it can mean they are fully whole of market in all areas except a handful where they choose not to transact. Such as unregulated schemes. This is becoming a popular option and is effectively similar to the pre RDR IFA classification. This type is fine to deal with as the limitations are typically in the high risk areas that most people dont want to deal in and you find most complaints are about. In between these you will have some that have a limited panel of a providers. Used to be known as multi-tie. This should ideally be avoided as usually key providers are not available.

    St James place is single tied. So, very much the type to be avoided. They are also expensive. Very slick and professional normally but you pay for that many times over.
    Last edited by dunstonh; 23-04-2014 at 10:48 AM.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • sassy165
    • By sassy165 23rd Apr 14, 10:27 AM
    • 1,143 Posts
    • 13,621 Thanks
    sassy165
    Pension Annuity
    I am 70 years of age and for the past 10 years, in addition to my State Pension, have been drawing a personal pension which amounts to a paltry 12.82 PER MONTH.

    I understand that the annuity 'pot' is something like 2500.

    Following the budget I thought that I would be able to commute my annuity (the lump sum would do me more good than the monthly sum I receive) however, when I wrote to my provider - Abbey Life - their reply was that they had not amended their scheme rules to allow 'existing' annuities to be commuted to a final lump sum payment and they go on to say that they understand that many other companies are also not offering this facility.

    Can they do this? Their reply implies that some other companies are offering this facility! I struggled to pay into my private pension while I was working and I feel that I am not being dealt a fair hand now.

    Is there any way round this please?

    Thank you


    Thanks dunstonh for your reply - if thems the rules thems the rules! Given my time over I would not opt for a private pension.
    Last edited by sassy165; 23-04-2014 at 10:58 AM. Reason: thanks
    Thanks to all OP's your efforts are much appreciated
    • dunstonh
    • By dunstonh 23rd Apr 14, 10:49 AM
    • 98,598 Posts
    • 66,989 Thanks
    dunstonh
    I am 70 years of age and for the past 10 years, in addition to my State Pension, have been drawing a personal pension which amounts to a paltry 12.82 PER MONTH.

    I understand that the annuity 'pot' is something like 2500.

    Following the budget I thought that I would be able to commute my annuity (the lump sum would do me more good than the monthly sum I receive) however, when I wrote to my provider - Abbey Life - their reply was that they had not amended their scheme rules to allow 'existing' annuities to be commuted to a final lump sum payment and they go on to say that they understand that many other companies are also not offering this facility.

    Can they do this? Their reply implies that some other companies are offering this facility! I struggled to pay into my private pension while I was working and I feel that I am not being dealt a fair hand now.

    Is there any way round this please?

    Thank you
    Originally posted by sassy165
    The budget has had no impact on existing annuities.

    Yes they can continue to provide the income under the terms you and they agreed to when you took it out.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • bowlhead99
    • By bowlhead99 18th Jul 14, 1:08 PM
    • 8,818 Posts
    • 16,145 Thanks
    bowlhead99
    I guess exercising his brain by dispensing free guidance across 70k separate posts which are all open to public scrutiny, without appearing too incompetent, over the course of a decade, probably helps him keep his wits about him when faced with a new client whose personal status and financial objectives he's likely seen before anyway.

    Working in professional services, you can't be accurately judged from afar about whether you're truly focussed on a client's best interest or just enough of their interests to not generate a complaint. You might charge 300 an hour for three hours direct work on a client that would have taken 30 hours for someone to do without the benefit of decades of experience and buying in certain services from elsewhere, and deliver a high quality product.

    If the client gets that three hours of focus and a quality product, he can't say that you can't go to sleep that night or take a weekend off or work on any other clients or post on any internet forums because it will dilute the standard of service delivered in the three hours. A personal professional service comes with a duty of care, but not an obligation to spend all your time thinking about that client's problem to the exclusion of all else.

    If you do the maths on 70k posts at 3 min per post, that's 210k mins or 3500 hours. But since mid 2004 we have had over 87000 hours. So the 3500 hours posting is 4% of his time. Then assuming he spends half as much time again reading what people wrote on this and other forums, it's 6% of every living day, an hour and a half.

    Many people would spend that fraction of their life eating and pooping. Maybe his posting is concurrent with one or both of those, or maybe he sleeps less than 8 hours a night, or commutes for 1.5 hours a day fewer than I do.

    Or maybe he's his own boss and gets to spend a lot of his working day writing on forums tangentially related to his work, drumming up business and keeping educated about what people out there in the wide world are thinking about personal finance, while having his employees handle the easier cases that come in. None of this would preclude his clients receiving a decent service.

    We are supposed to be nice to newbies here and I did see you put a 'winky face' on your question so am not going to write you off as an imbecile just yet . Still, seems a strange reason to join a forum, just to point out someone's postcount.

    Cheers, bowlhead99 [0.36 posts per day, thanked in 74% of posts...]
    Last edited by bowlhead99; 18-07-2014 at 1:59 PM. Reason: maths
    • JohnRo
    • By JohnRo 18th Jul 14, 1:12 PM
    • 2,746 Posts
    • 2,579 Thanks
    JohnRo
    Dunstonh is a very well respected contributor to this board and many here, including myself, are very thankful for all the efforts he puts in here and, as you point out, for free.
    Originally posted by jem16
    I'll second that with bells on.

    Helped me extensively, for free, over several weeks, to apply technical pressure and retrieve a five figure reimbursement from a portfolio churning, commission hungry, bone idle IFA who had exploited my ignorance and abused the trust placed in him.

    Melodrama aside, it restored my faith in humanity at the time.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
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