IFA. Worth the fee and what am I getting into?
Discussion
Pretty much as the title really. Recent downsize of JS Towers has liberated a six figure sum that's been transferred and left in our current account as we have no idea what to do with it.
There's nothing we need to spend it on and we'd like to use the capital to somehow generate a income. We'd also like to invest some for our grandson. Obviously we need some advice on how best to do that and one option is to pay for it. Question is - do the fees charged by an IFA actually justify the cost in improved returns and if we do go down the IFA route how can I ensure I'm not getting into any long term commitment that'll end up costing more in ongoing fees and charges than the sum would earn if I just let the bank invest it?
Completely clueless when it comes to making money go to work for you rather than you going to work for it and don't want to look back and realise we've been screwed.
Any thoughts appreciated.
There's nothing we need to spend it on and we'd like to use the capital to somehow generate a income. We'd also like to invest some for our grandson. Obviously we need some advice on how best to do that and one option is to pay for it. Question is - do the fees charged by an IFA actually justify the cost in improved returns and if we do go down the IFA route how can I ensure I'm not getting into any long term commitment that'll end up costing more in ongoing fees and charges than the sum would earn if I just let the bank invest it?
Completely clueless when it comes to making money go to work for you rather than you going to work for it and don't want to look back and realise we've been screwed.
Any thoughts appreciated.
Whether or not the gains will be worth the fees really depends on the charging structure of the IFA, the term and the growth rates. What's can tell you is that most IFA's will have lower initial and ongoing charges than a banks investments. Banks don't offer free advice and even now while you money is held on deposit the bank will probably be making 2-3% PA off you.
I think it really depends on your own investing knowledge and your confidence in your investment knowledge. From your post it doesn't appear like you have much of either, so I'd say speaking to an IFA (or at least someone with good investment knowledge) is very important.
Lots of good, independent, information and help finding an IFA on this site: https://www.unbiased.co.uk/
Lots of good, independent, information and help finding an IFA on this site: https://www.unbiased.co.uk/
Yep if you have no clue and need to invest ASAP then probably worth paying a one off fee. Then DYOR, lots a reading, books etc and you will be sorted.
Otherwise avoid, its just another tax on your savings. If you can read you can sort yourself out easily.
This is a good place to start http://monevator.com/
Otherwise avoid, its just another tax on your savings. If you can read you can sort yourself out easily.
This is a good place to start http://monevator.com/
FastEddie83 said:
the bank will probably be making 2-3% PA off you.
Utter b
ks. Try in the region of less than 0.2%, see Basel III for details.Back on topic,
A decent IFA, or investment manager if just needing investment advice, as opposed to tax planning, can make a world of difference to the outcome in terms of understanding your risk, research capability and not getting violated on the actual ongoing annual fees etc,, as opposed to the fees for adivice which many get confused over.
Edited by ellroy on Sunday 21st December 09:38
Edited by ellroy on Sunday 21st December 19:08
FastEddie83 said:
the bank will probably be making 2-3% PA off you.
Utter bks. Try in the region of less than 0.2%, see Basel III for details.Back on topic,
A decent IFA, or investment manager if just needing investment advice, as opposed to tax planning, can make a world of difference to the outcome in terms of understanding your risk, research capability and not getting violated on the actual ongoing annual fees etc,, as opposed to the fees for adivice which many get confused over.
Edited by ellroy on Sunday 21st December 09:38
Edited by ellroy on Sunday 21st December 19:08
Steve,
You've reached your dotage so congratulations! lol
You might not even need advice. If you want to set aside money for the next but one generation, that in all honesty, won't require (certainly, expensive) input; that's more a fire and forget tactic. If you want income for yourself with absolutely no exposure to capital risk you might like the idea of a new pensioner bond (albeit it comes at the end of the fixed period) and possibly a personal pension for you and a partner (depending on your situation with other pensions). The new legislation surrounding triviality is well worth looking at, but that depends on what you've done with your other wealth.
Most credible IFA will ensure that they don't whittle your pot away for their own betterment and to your detriment, but get the big picture right first. The cost will depend on your personal circumstances and how tightly defined you want the advice to be. The one good thing about the Retail Distribution Review has been that insanely expensive old skool and many of the (ahem) national chain tariffs have been exposed or pared down to something far more realistic and reasonable. Investment advice is far more comparable now, to legal or accounting advice. If your needs are modest, why pay a fortune for expensive accounts or a complicated will?
To give you an idea, I'm working on a streamlined service which will operate on a fixed fee basis and involve people interacting with me as they might, their insurance company. That fixed fee is going to be in the low hundreds, whatever the amount and will rely on punchy and prompt feedback from the client to make it work, I'm modelling it at the moment. The challenge is, for me in the philosophical sense anyway, to prevent those who don't have a lot from (effectively) cross subsidising those who do. I'm working on the idea of deferred or simply canceled fees for start out investors and clients but it's a bit of a regulatory minefield. I have even considered setting aside money for a pro bono pot. There is an advice gap, young people especially want to start investing for their futures now but they mustn't lose all their future growth in fees.
Good luck, my instinctive advice would be to completely forget it over the festive period and wait for the New Year to die down and then address it. It's taken you decades to grow it, a month or three more won't make much difference! Have a great downsized xmas.
You've reached your dotage so congratulations! lol
You might not even need advice. If you want to set aside money for the next but one generation, that in all honesty, won't require (certainly, expensive) input; that's more a fire and forget tactic. If you want income for yourself with absolutely no exposure to capital risk you might like the idea of a new pensioner bond (albeit it comes at the end of the fixed period) and possibly a personal pension for you and a partner (depending on your situation with other pensions). The new legislation surrounding triviality is well worth looking at, but that depends on what you've done with your other wealth.
Most credible IFA will ensure that they don't whittle your pot away for their own betterment and to your detriment, but get the big picture right first. The cost will depend on your personal circumstances and how tightly defined you want the advice to be. The one good thing about the Retail Distribution Review has been that insanely expensive old skool and many of the (ahem) national chain tariffs have been exposed or pared down to something far more realistic and reasonable. Investment advice is far more comparable now, to legal or accounting advice. If your needs are modest, why pay a fortune for expensive accounts or a complicated will?
To give you an idea, I'm working on a streamlined service which will operate on a fixed fee basis and involve people interacting with me as they might, their insurance company. That fixed fee is going to be in the low hundreds, whatever the amount and will rely on punchy and prompt feedback from the client to make it work, I'm modelling it at the moment. The challenge is, for me in the philosophical sense anyway, to prevent those who don't have a lot from (effectively) cross subsidising those who do. I'm working on the idea of deferred or simply canceled fees for start out investors and clients but it's a bit of a regulatory minefield. I have even considered setting aside money for a pro bono pot. There is an advice gap, young people especially want to start investing for their futures now but they mustn't lose all their future growth in fees.
Good luck, my instinctive advice would be to completely forget it over the festive period and wait for the New Year to die down and then address it. It's taken you decades to grow it, a month or three more won't make much difference! Have a great downsized xmas.
Ginge R said:
Steve,
You've reached your dotage so congratulations! lol
You might not even need advice. If you want to set aside money for the next but one generation, that in all honesty, won't require (certainly, expensive) input; that's more a fire and forget tactic. If you want income for yourself with absolutely no exposure to capital risk you might like the idea of a new pensioner bond (albeit it comes at the end of the fixed period) and possibly a personal pension for you and a partner (depending on your situation with other pensions). The new legislation surrounding triviality is well worth looking at, but that depends on what you've done with your other wealth.
Most credible IFA will ensure that they don't whittle your pot away for their own betterment and to your detriment, but get the big picture right first. The cost will depend on your personal circumstances and how tightly defined you want the advice to be. The one good thing about the Retail Distribution Review has been that insanely expensive old skool and many of the (ahem) national chain tariffs have been exposed or pared down to something far more realistic and reasonable. Investment advice is far more comparable now, to legal or accounting advice. If your needs are modest, why pay a fortune for expensive accounts or a complicated will?
To give you an idea, I'm working on a streamlined service which will operate on a fixed fee basis and involve people interacting with me as they might, their insurance company. That fixed fee is going to be in the low hundreds, whatever the amount and will rely on punchy and prompt feedback from the client to make it work, I'm modelling it at the moment. The challenge is, for me in the philosophical sense anyway, to prevent those who don't have a lot from (effectively) cross subsidising those who do. I'm working on the idea of deferred or simply canceled fees for start out investors and clients but it's a bit of a regulatory minefield. I have even considered setting aside money for a pro bono pot. There is an advice gap, young people especially want to start investing for their futures now but they mustn't lose all their future growth in fees.
Good luck, my instinctive advice would be to completely forget it over the festive period and wait for the New Year to die down and then address it. It's taken you decades to grow it, a month or three more won't make much difference! Have a great downsized xmas.
Thanks for that - you've put things in perspective a bit. You've reached your dotage so congratulations! lol
You might not even need advice. If you want to set aside money for the next but one generation, that in all honesty, won't require (certainly, expensive) input; that's more a fire and forget tactic. If you want income for yourself with absolutely no exposure to capital risk you might like the idea of a new pensioner bond (albeit it comes at the end of the fixed period) and possibly a personal pension for you and a partner (depending on your situation with other pensions). The new legislation surrounding triviality is well worth looking at, but that depends on what you've done with your other wealth.
Most credible IFA will ensure that they don't whittle your pot away for their own betterment and to your detriment, but get the big picture right first. The cost will depend on your personal circumstances and how tightly defined you want the advice to be. The one good thing about the Retail Distribution Review has been that insanely expensive old skool and many of the (ahem) national chain tariffs have been exposed or pared down to something far more realistic and reasonable. Investment advice is far more comparable now, to legal or accounting advice. If your needs are modest, why pay a fortune for expensive accounts or a complicated will?
To give you an idea, I'm working on a streamlined service which will operate on a fixed fee basis and involve people interacting with me as they might, their insurance company. That fixed fee is going to be in the low hundreds, whatever the amount and will rely on punchy and prompt feedback from the client to make it work, I'm modelling it at the moment. The challenge is, for me in the philosophical sense anyway, to prevent those who don't have a lot from (effectively) cross subsidising those who do. I'm working on the idea of deferred or simply canceled fees for start out investors and clients but it's a bit of a regulatory minefield. I have even considered setting aside money for a pro bono pot. There is an advice gap, young people especially want to start investing for their futures now but they mustn't lose all their future growth in fees.
Good luck, my instinctive advice would be to completely forget it over the festive period and wait for the New Year to die down and then address it. It's taken you decades to grow it, a month or three more won't make much difference! Have a great downsized xmas.
BTW although the kids think I'm antique I'm in my early 50's... So the pensioner bond aint gonna work
my advise is to ask friends which IFA they have used and are happy with....I would not get involved with anybody off an internet forum such as this ......if you have say 150k to invest then an IFA should be able to advise for 2-3 hour fee ....it will probably cost you £400-£500 and should be money well spent.....Good Luck
Ginge R said:
Michael,
Aside from anything else you've suggested, and I wouldn't necessarily disagree, if you think a compliant advice audit trail can be satisfied in a few hours these days, you're a bit out of date.
Aside from anything else you've suggested, and I wouldn't necessarily disagree, if you think a compliant advice audit trail can be satisfied in a few hours these days, you're a bit out of date.
Im sure your right as i'm not an IFA but my advise stands that recommendation from a friend or perhaps a Charted Accountant is far better and safer than finding somebody from a forum ....no disrespect to you
Any IFA isn't just about choosing top performing investments, its about choosing investments which are right for your goals, and attitude to risk, and making sure you are doing so tax-efficiently. Theuy might even sugest another solution which you hadn't even considered.
When the stock market often moves 1% in a day, is spending 1% on some decent advice really such a waste of money?
(I'm not an IFA by the way)
When the stock market often moves 1% in a day, is spending 1% on some decent advice really such a waste of money?
(I'm not an IFA by the way)
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