What sort of a return can I get on £650k?

[NRS]

V8 Fettler said:

sidicks said:

V8 Fettler said:

How is it nonsense to provide good professional advice, perhaps with an element of crystal ball gazing? If you have a problem with DA's description of many IFAs, I suggest that you take it up with him. Would my alternative description of "parasites" sit better with you?

Once again, you appear to be confused between providing ‘good professional advice’ and ‘predicting the future’.

Never mind.

Edited by sidicks on Monday 21st May 19:06

Are you not "out" ?

Plenty of good professional advice provided in the construction and engineering sectors that includes an element of crystal ball gazing.

Yes, but you can see just how quickly a market can drop. Very few people predict the big crashes, and those that do tend not to be doing it every time. I presume an IFA would be able to give you advice like "we're far into the economic cycle now, so it's perhaps better to go more into consumer staples rather than small little companies that will perhaps offer more growth in the good times, but will go pop when a recession comes". So you might lose some money, but a lot less than you would have otherwise. And that is what it comes down to - does the advice you pay for save you more money than it costs?

Edited by NRS on Monday 21st May 22:40

[BarryGibb]

DonkeyApple said:

The other way to look at this from the perspective of those with average wealth is that you don’t need to buy products from an IFA (most aren’t independent anyway but tied to a product vendor so genuinely cannot offer independent advise just sell what they are regulated to sell) the market for self directed investment products is pretty impressive nowadays but what you do need to buy is the advise on how to diversify and how to utilise all your tax benefits.

Most IFAs are truly independent

[BarryGibb]

V8 Fettler said:

DonkeyApple said:

The final bit of information to consider is that very many IFAs are fking idiots. Grubby little salesmen who only aren’t selling windows because they attended a good school and managed just enough to avoid being an estate agent or job recruiter. Speak to more than one and only after a few will you begin to get a feel for spotting the well spoken window lickers versus those who actually listen to your answers and structure their responses based on who you are.

It's farcial that punters have to make life-changing financial decisions where there is a high risk that their professional adviser is an idiot.

How does a punter filter out the idiots?

Might be worth having a look on Unbiased/VouchedFor

http://about.vouchedfor.co.uk/about/what-we-do

[BarryGibb]

sidicks said:

DonkeyApple said:

An IFA works for you. He is in your employ.

Most people chose their IFA by just opening the door and letting him come in, make himself at home and just buy whatever he is selling.

But he is an employee and you must treat them like any prospective employee. You need to interview them and interview enough to stand a chance of finding the right employee who is going to work properly for you.

But first you need to know what the job is that they will be doing. You can’t start interviewing for a role if you have not yet defined what that role is.

The landscape is changing rapidly for IFAs as comm is gone and other remuneration types drive completely different behaviour and so it’s never been more important to educate yourself, define the role, set the questions and interview enough to weed out the weak and unsuitable.

The other way to look at this from the perspective of those with average wealth is that you don’t need to buy products from an IFA (most aren’t independent anyway but tied to a product vendor so genuinely cannot offer independent advise just sell what they are regulated to sell) the market for self directed investment products is pretty impressive nowadays but what you do need to buy is the advise on how to diversify and how to utilise all your tax benefits.

It is probably fair to argue, in simplistic terms, that the performance difference between sticking all your money into blue chip index ETFs will yeild the exact same return as paying an IFA to create a complex blended portfolio. But the real key is not per se the underlying investments but ensuring that these assets are held in the most tax efficient manner and that you utilise every wrapper advantage. That is the advice that is catagorically worth paying for as that is what can make you tens of thousands over your retirement.

I think this is important - most people seem to assess (in hindsight) the advice given by an IFA based on the resulting investment outcome, which is entirely wrong. Few IFAs are properly qualified to analyse investment markets alongside economics to identify the right asset classes to invest in at the right time. Even fewer can accurately predict the future...

What they can do is:
- Understand your risk appetitive and structure a high level asset mix consistent with those requirements
- Identify which investment / savings / protection products might be suitable for you, given your personal situation and objectives
- Advise on the most efficient way of accessing products to meet those needs.

This is still very much a product focused view and I would argue that a "modern" financial planer will see this as a very small part of their job with the least value add - sitting with the client and really understanding their goals and objectives (they may not even have thought these through yet), and creating a viable plan (that is reviewed periodically) is where the most value is added, IMO

[V8 Fettler]

NRS said:

V8 Fettler said:

sidicks said:

V8 Fettler said:

How is it nonsense to provide good professional advice, perhaps with an element of crystal ball gazing? If you have a problem with DA's description of many IFAs, I suggest that you take it up with him. Would my alternative description of "parasites" sit better with you?

Once again, you appear to be confused between providing ‘good professional advice’ and ‘predicting the future’.

Never mind.

Edited by sidicks on Monday 21st May 19:06

Are you not "out" ?

Plenty of good professional advice provided in the construction and engineering sectors that includes an element of crystal ball gazing.

Yes, [/b]but you can see just how quickly a market can drop[/b]. Very few people predict the big crashes, and those that do tend not to be doing it every time. I presume an IFA would be able to give you advice like "we're far into the economic cycle now, so it's perhaps better to go more into consumer staples rather than small little companies that will perhaps offer more growth in the good times, but will go pop when a recession comes". So you might lose some money, but a lot less than you would have otherwise. And that is what it comes down to - does the advice you pay for save you more money than it costs?

Edited by NRS on Monday 21st May 22:40

Markets are generally cyclical, which is why diversification is generally so important, even I know that. Many people predict financial crashes, most predictions are wrong.

[Pvapour]

You can get 6% on 100k

And only over 3 months, a holiday let in europe should see an easy 500 a week on a short season (july-sept), minus agency fees (dont know what they are)

If right location like portugal youd then have a nice winter pad for some sun, just a thought.

[DonkeyApple]

V8 Fettler said:

How is it nonsense to provide good professional advice, perhaps with an element of crystal ball gazing? If you have a problem with DA's description of many IFAs, I suggest that you take it up with him. Would my alternative description of "parasites" sit better with you?

Do not bring me in and distort my words to suit your agenda. Luckily this is the Finance forum and everyone will be smart enough to see what you are doing but it is still destructive, unpleasant and dishonest.

[DonkeyApple]

V8 Fettler said:

Most punters don't have the ability to do this, additionally, an IFA with some training/experience in aggressive sales techniques will railroad through the defences of most punters, witness the current furore re: steelworkers and their pension funds.

No. Every single ‘punter’ with the income and wealth levels that would benefit from a competent to good IFA has the ability to do this. The point is that most don’t. They will simply throw all their money at some bloke who gets recommended or whomever has the nicest looking website.

At what wealth and income level are you thinking someone should engage the services of an IFA?!!

[V8 Fettler]

DonkeyApple said:

V8 Fettler said:

How is it nonsense to provide good professional advice, perhaps with an element of crystal ball gazing? If you have a problem with DA's description of many IFAs, I suggest that you take it up with him. Would my alternative description of "parasites" sit better with you?

Do not bring me in and distort my words to suit your agenda. Luckily this is the Finance forum and everyone will be smart enough to see what you are doing but it is still destructive, unpleasant and dishonest.

DonkeyApple said:

-
-

The final bit of information to consider is that very many IFAs are fking idiots. Grubby little salesmen who only aren’t selling windows because they attended a good school and managed just enough to avoid being an estate agent or job recruiter. Speak to more than one and only after a few will you begin to get a feel for spotting the well spoken window lickers versus those who actually listen to your answers and structure their responses based on who you are.

Your words, not mine.

Where am I being "destructive, unpleasant and dishonest" in quoting you?

[V8 Fettler]

DonkeyApple said:

V8 Fettler said:

Most punters don't have the ability to do this, additionally, an IFA with some training/experience in aggressive sales techniques will railroad through the defences of most punters, witness the current furore re: steelworkers and their pension funds.

No. Every single ‘punter’ with the income and wealth levels that would benefit from a competent to good IFA has the ability to do this. The point is that most don’t. They will simply throw all their money at some bloke who gets recommended or whomever has the nicest looking website.

At what wealth and income level are you thinking someone should engage the services of an IFA?!!

Every punter with an income and/or savings should be able to employ an IFA with the expectation of competence and good intentions, unfortunately reality does not support this expectation.

[DonkeyApple]

BarryGibb said:

Most IFAs are truly independent

Can you reconcile that post RDR? There are very few now who have the full ability to be independent. While RDR benefitted us hugely by bring and end to product comms determining the ‘advice’ being given it ended up driving the advisors into the arms of the product vendors by regulatory pressures instead.

But this is why it remains hugely important to interview a series of advisors as most will simply be selling the ‘house’ products and views.

[DonkeyApple]

V8 Fettler said:

Every punter with an income and/or savings should be able to employ an IFA with the expectation of competence and good intentions, unfortunately reality does not support this expectation.

No. You require a certain level of income in order to have excess capital in order to save. You need a certain level of wealth to justify paying fixed fees. So in reality the vast majority of the population have absolutely no need of an IFA. Your repeatedly mentioned steel workers being a near perfect example.

So, looking at this smaller, higher income and wealth tier the majority of those are still at a lower end and actually could get away without needing to pay for an IFA as they are smart enough to self educate on the basics of which wrapper and which monthly investments. The robo market has just taken the standard ‘house advisory, one size fits all’ model and moved it online to remove the personal costs. The fact that huge numbers of perfectly intelligent people make the personal decision to get rich quick in a desperate attempt to cover their over spending and end up punting wildly in wholly unsuitable markets is not the fault of the regulated investment industry.

So why don’t you tell me what level of savings a punter would need to have in order to justify paying an IFA?

Or once an individual has maxed out their annual pension contributions and their ISA allowances and their CGT allowance what sort of annual income is that suggesting? For a married couple you can bury about £100k of excess income each year before you need any real tax or investment advice.

[V8 Fettler]

DonkeyApple said:

V8 Fettler said:

Every punter with an income and/or savings should be able to employ an IFA with the expectation of competence and good intentions, unfortunately reality does not support this expectation.

No. You require a certain level of income in order to have excess capital in order to save. You need a certain level of wealth to justify paying fixed fees. So in reality the vast majority of the population have absolutely no need of an IFA. Your repeatedly mentioned steel workers being a near perfect example.

So, looking at this smaller, higher income and wealth tier the majority of those are still at a lower end and actually could get away without needing to pay for an IFA as they are smart enough to self educate on the basics of which wrapper and which monthly investments. The robo market has just taken the standard ‘house advisory, one size fits all’ model and moved it online to remove the personal costs. The fact that huge numbers of perfectly intelligent people make the personal decision to get rich quick in a desperate attempt to cover their over spending and end up punting wildly in wholly unsuitable markets is not the fault of the regulated investment industry.

So why don’t you tell me what level of savings a punter would need to have in order to justify paying an IFA?

Or once an individual has maxed out their annual pension contributions and their ISA allowances and their CGT allowance what sort of annual income is that suggesting? For a married couple you can bury about £100k of excess income each year before you need any real tax or investment advice.

Many pensioners with minimal income but substantial assets, do they not require the services of a competent, well-intentioned IFA?.

Steelworkers faced with life-changing financial decisions re: future pension options, do they not require the services of a competent, well-intentioned IFA?.

[DonkeyApple]

V8 Fettler said:

Many pensioners with minimal income but substantial assets, do they not require the services of a competent, well-intentioned IFA?.

Steelworkers faced with life-changing financial decisions re: future pension options, do they not require the services of a competent, well-intentioned IFA?.

First has wealth. Second is a work place issue.

[PostHeads123]

My IFA got busted by online vigilantes trying to meet a girl http://www.dailymail.co.uk/news/article-4290358/Fi... Guy lost everything, he had just had his house done up, it got sold, I assume his wife divorced him as well.

My account went to jail for stealing off clients http://www.dailymail.co.uk/news/article-2098810/Ma... ,

I've not had much luck lol

Edited by PostHeads123 on Tuesday 22 May 12:28

[BarryGibb]

DonkeyApple said:

BarryGibb said:

Most IFAs are truly independent

Can you reconcile that post RDR? There are very few now who have the full ability to be independent. While RDR benefitted us hugely by bring and end to product comms determining the ‘advice’ being given it ended up driving the advisors into the arms of the product vendors by regulatory pressures instead.

But this is why it remains hugely important to interview a series of advisors as most will simply be selling the ‘house’ products and views.

There are loads that are fully independent (perhaps I don't mingle with the ones that aren't) - not sure why you think RDR had such a big impact for those that were charging fees for financial planning all along.

[Behemoth]

BarryGibb said:

I would argue that a "modern" financial planer will see this as a very small part of their job with the least value add - sitting with the client and really understanding their goals and objectives (they may not even have thought these through yet), and creating a viable plan (that is reviewed periodically) is where the most value is added, IMO

Absolutely right. The best IFAs point you in the right direction. The value of independent thinking that isn't loaded by family & friend bias is enormous. Being able to competently sort out your pension rights, inheritance tax etc is only the baseline.

[NRS]

V8 Fettler said:

NRS said:

V8 Fettler said:

sidicks said:

V8 Fettler said:

How is it nonsense to provide good professional advice, perhaps with an element of crystal ball gazing? If you have a problem with DA's description of many IFAs, I suggest that you take it up with him. Would my alternative description of "parasites" sit better with you?

Once again, you appear to be confused between providing ‘good professional advice’ and ‘predicting the future’.

Never mind.

Edited by sidicks on Monday 21st May 19:06

Are you not "out" ?

Plenty of good professional advice provided in the construction and engineering sectors that includes an element of crystal ball gazing.

Yes, but you can see just how quickly a market can drop. Very few people predict the big crashes, and those that do tend not to be doing it every time. I presume an IFA would be able to give you advice like "we're far into the economic cycle now, so it's perhaps better to go more into consumer staples rather than small little companies that will perhaps offer more growth in the good times, but will go pop when a recession comes". So you might lose some money, but a lot less than you would have otherwise. And that is what it comes down to - does the advice you pay for save you more money than it costs?

Edited by NRS on Monday 21st May 22:40

Markets are generally cyclical, which is why diversification is generally so important, even I know that. Many people predict financial crashes, most predictions are wrong.

Of course you should be diversified, but you will want to change the weighting towards different areas throughout time. It would be stupid to take all your money out of stocks because "a financial crash will happen soon". But if you're in the 2nd longest bull market then it perhaps is not the best idea to be heavily exposed to some of the more risky sectors in the market (although it has been a slow recovery too). So then you might want to go for stuff that people always have to buy to reduce the risk on the downside, but still get some upside. Another example I did around a year ago was put more weighting into oil, as it was likely near the bottom of the cycle, and so would have a higher probability of bigger gains going forward.

[red_slr]

That all depends (IMHO) on your stage in life. The OP is retiring so needs low risk and market swings could be a real danger, that's what the 4% SWR is meat to smooth out I guess.

If you are young and have 30-40 years to go then personally unless your going for large holdings in single stocks so long as you stick with funds I think generally its pretty safe no matter what happens. Its when you close in on that final 5-10 years you might want to re-consider.

I have less than 5 years to go but I need the markets to play ball to help me reach my goal. If the markets don't help me then I just have to accept it and extend my working life by a few years.

[V8 Fettler]

DonkeyApple said:

V8 Fettler said:

Many pensioners with minimal income but substantial assets, do they not require the services of a competent, well-intentioned IFA?.

Steelworkers faced with life-changing financial decisions re: future pension options, do they not require the services of a competent, well-intentioned IFA?.

First has wealth. Second is a work place issue.

A pensioner may have minimal income but a valuable house, who better than a competent, well-intentioned IFA to advise on extracting income from the house?

The steelworkers had to make a decison re: remain in or transfer out of a defined benefit pension scheme, who better than a competent, well-intentioned IFA to provide the correct advice? http://www.bbc.co.uk/news/business-43060272