Finding an IFA
Discussion
greengreenwood7 said:
Finally on that point...for all the talk of bubbles/pullbacks etc - none of the adviors i talked with initially ( not the current crop) ever suggested using inverse etf's etc to hedge. So it was a bit of a pisser to see x% wiped off the sipp's in '22, when in reality, could have negated a fair portion of that by simply buying the inverse SPY (orwhatever).
B-Stewie often makes the point about ongoing fees, and he's right; But i think with a decent sized pot it's worth paying for and listening to top advice.
It’s easy to say that with hindsight, but how many people made that decision back then. It’s been proven over time that you can’t go wrong with low cost global index trackersB-Stewie often makes the point about ongoing fees, and he's right; But i think with a decent sized pot it's worth paying for and listening to top advice.
greengreenwood7 said:
B-Stewie often makes the point about ongoing fees, and he's right; But i think with a decent sized pot it's worth paying for and listening to top advice.
I think we see too many situations (and I've seen them with family) where people are paying 1-2% a year on everything they have for an hour visit (or phone call if you're not worth enough to receive a visit) a year and to be stuck in a multi-asset fund suitable for their risk appetite.With a little bit of time and inquisitiveness many (not all) people could do a lot (not necessarily all) of that themselves for 0.2% a year and when you see the impact of fees it should be thought provoking.
If you're Gifdy with £750K the difference between an IFA and some level of DIY could be £7500 to £15000 a year in fees on a £750K pot.
That's every year for ever.
How many things do you do in your life where you wouldn't try to understand what you could and couldn't do yourself before you commit to that sort of expense?
I'd never say there isn't value in paying for advice - I would say understand whether you really need it and the extent of it given the way it tends to be sold and charged
I've been happy to pay for specific advice when I've felt I needed it.
It's the annual % model that just doesn't work for me. Whenever I've spoken to an IFA, transparency is very difficult to achieve. I always make them convert the quoted % into a £ number - and then it's much more difficult to justify. Then ask for complete disclosure of any further commissions, payments etc they will receive from anywhere else and things get uncomfortable.
If you received an annual invoice, rather than it just being taken from a fund most people don't really track or focus on, things would be very different.
It's the annual % model that just doesn't work for me. Whenever I've spoken to an IFA, transparency is very difficult to achieve. I always make them convert the quoted % into a £ number - and then it's much more difficult to justify. Then ask for complete disclosure of any further commissions, payments etc they will receive from anywhere else and things get uncomfortable.
If you received an annual invoice, rather than it just being taken from a fund most people don't really track or focus on, things would be very different.
Some thoughts below. Clearly worth exactly what you paid me for it (I am not a financial advisor, but do pay attention to money and stepped away from work mid-50s!).
gifdy said:
Thanks - it sounds like maybe I just need to keep at it myself. I was hoping for someone who could cover all the bases.
Main points :
- 4 work pensions ( 3 defined contributions, 1 small defined benefits ) but not all are performing that well. Should I consolidate or do they have benefits I could exploit in an early retirement ? Total pot is ~ £750K, is it enough for an early 'partial' retirement at 60 ?
We, or any FA, will need to know your expectations for income & retirement spend to know that answer. For many people, that is in the territory of ‘why are you still working’!
In terms of moving them…I would lean towards leaving the DB one alone but consolidate the others (a did my own, easy enough process, especially if the providers are part of Origo Options).
- House is about to be paid off, how best to divert the monthly payment for investment ? I've got a Cash ISA but should I go for something with higher risk...or am I already overly exposed to markets with the Pensions ?
If you don’t need access to cash for 5+ years, S&S ISA makes far more sense…for money you do need access to, cash ISA or premium bonds is fine
- Company share scheme. How & when to realise my shares/options ?
depends on the detail. A wise friend once suggested cashing in 10% each year as a hedge against collapsing company, but if your firm is solid, then it is rather up to you!
- Tax return. I end up paying additional tax every year even though I'm on PAYE.. I'm sure I'm missing some tricks.
- Company has an EV car scheme. Can I sell existing owned car & use this scheme to be more tax efficient ?
Ask an accountant, not a financial advisor!
As you can see, a Pension advisor or tax consultant may not be able to address all these points.
Main points :
- 4 work pensions ( 3 defined contributions, 1 small defined benefits ) but not all are performing that well. Should I consolidate or do they have benefits I could exploit in an early retirement ? Total pot is ~ £750K, is it enough for an early 'partial' retirement at 60 ?
We, or any FA, will need to know your expectations for income & retirement spend to know that answer. For many people, that is in the territory of ‘why are you still working’!
In terms of moving them…I would lean towards leaving the DB one alone but consolidate the others (a did my own, easy enough process, especially if the providers are part of Origo Options).
- House is about to be paid off, how best to divert the monthly payment for investment ? I've got a Cash ISA but should I go for something with higher risk...or am I already overly exposed to markets with the Pensions ?
If you don’t need access to cash for 5+ years, S&S ISA makes far more sense…for money you do need access to, cash ISA or premium bonds is fine
- Company share scheme. How & when to realise my shares/options ?
depends on the detail. A wise friend once suggested cashing in 10% each year as a hedge against collapsing company, but if your firm is solid, then it is rather up to you!
- Tax return. I end up paying additional tax every year even though I'm on PAYE.. I'm sure I'm missing some tricks.
- Company has an EV car scheme. Can I sell existing owned car & use this scheme to be more tax efficient ?
Ask an accountant, not a financial advisor!
As you can see, a Pension advisor or tax consultant may not be able to address all these points.
YouWhat said:
It’s been proven over time that you can’t go wrong with low cost global index trackers
^^The data is true - but only if you stick to that plan 100%. A big proportion of DIY investors make the mistake of jumping from one side of the street to the other without looking both ways. I've done it myself - sack the IFA and then sail your own boat. The mistakes are feeling that you know better than the market - because you've read somewhere that small caps, bonds, geographic areas etc are cheap. Whist in the background the slow and steady global tracker is overtaking you..My advice is if you can't be 100% sure you'll stick to a (boring) global index, use an IFA. Otherwise, just buy the cheapest FTSE World tracker and let it bake.
Caddyshack said:
Simpo Two said:
^^ All wise words. Remember you're hiring a salesman, not a professional.
I’m not sure that is 100% true or fair of a chartered IFA nowadays.Phooey said:
^^The data is true - but only if you stick to that plan 100%. A big proportion of DIY investors make the mistake of jumping from one side of the street to the other without looking both ways. I've done it myself - sack the IFA and then sail your own boat. The mistakes are feeling that you know better than the market - because you've read somewhere that small caps, bonds, geographic areas etc are cheap. Whist in the background the slow and steady global tracker is overtaking you..
My advice is if you can't be 100% sure you'll stick to a (boring) global index, use an IFA. Otherwise, just buy the cheapest FTSE World tracker and let it bake.
Agree with all of that but one little observation is that on here there tends to be an "all equities" theme to a lot of discussions.My advice is if you can't be 100% sure you'll stick to a (boring) global index, use an IFA. Otherwise, just buy the cheapest FTSE World tracker and let it bake.
For a lot of people that's simply too racy.
I'd say most people should probably be looking at a suitable multi-asset fund from the likes of Vanguard or HSBC.
Sticking with the plan (as you say) and knowing your risk appetite is massively important and if you're human and you stick £750K in a tracker and wake up one day and it's worth £500K trust me you're probably going to doubt whether you've done the right thing and that's when people panic and they often make poor and costly decisions.
If you're in a 60/40 (an example) there is less volatility (and usually less return) but people tend to be able to stomach that reduced volatility especially on the downside.
b
hstewie said:
hstewie said: For a lot of people that's simply too racy.
Agree. Which is why everyones personal circumstances and emotions are different. For example - mine isn't 100% equities at the moment because I need to keep some money on hand. Someone else might not need that 750k for 10+ yrs and/or it might only be a small proportion of their wealth because they have other sources of income.. which if their balls are big enough - a 100% equity portfolio would probably be the better pick. And as for off the shelf mixed-asset portfolios.. I personally think a 2-fund portfolio of a cheap World tracker and a global bond index is a better combination than a MA.
The big balls thing is so much easier said than done and I've tried doing the stocks and bond fund thing before and personally I hate seeing one go up whilst one goes down so I find a multi-asset works for me though everyone is different.
Theory v practise is fascinating sometimes and for many people they probably don't need an IFA they need someone who tell them to stick to the plan or they just want to delegate responsibility so they don't feel like they've fked up when they see even a totally sensible investment appear to lose money.
Psychology eh!
Theory v practise is fascinating sometimes and for many people they probably don't need an IFA they need someone who tell them to stick to the plan or they just want to delegate responsibility so they don't feel like they've f
ked up when they see even a totally sensible investment appear to lose money.Psychology eh!
bhstewie said:
hstewie said: If you're Gifdy with £750K the difference between an IFA and some level of DIY could be £7500 to £15000 a year in fees on a £750K pot.
He’s going to have some level of fees anyway - if he’s currently in, say, a Aviva pension then that could be 1%.The IFA fee is only part of it - unless you’re using that as a catch-all for all fees?
Absolutely I'm just saying understand what you're paying and who you're paying it to.
Funds and platforms are cheap.
You're quite right you're always going to be paying someone but you can do really sensible stuff for absolute buttons these days.
You could do the whole lot for 0.15% or probably less all-in if you wanted to and were happy doing it yourself.
If you are speaking to advisors make sure to be absolutely clear on every single cost that's involved.
As Car bon said above you don't always see a clear annual statement it's often little bits of cost shaved from different parts of your investments that all add up.
Transparency matters IMO.
Funds and platforms are cheap.
You're quite right you're always going to be paying someone but you can do really sensible stuff for absolute buttons these days.
You could do the whole lot for 0.15% or probably less all-in if you wanted to and were happy doing it yourself.
If you are speaking to advisors make sure to be absolutely clear on every single cost that's involved.
As Car bon said above you don't always see a clear annual statement it's often little bits of cost shaved from different parts of your investments that all add up.
Transparency matters IMO.
I've been happy to pay for specific advice when I've felt I needed it.
It's the annual % model that just doesn't work for me. Whenever I've spoken to an IFA, transparency is very difficult to achieve. I always make them convert the quoted % into a £ number - and then it's much more difficult to justify. Then ask for complete disclosure of any further commissions, payments etc they will receive from anywhere else and things get uncomfortable.
If you received an annual invoice, rather than it just being taken from a fund most people don't really track or focus on, things would be very different.
It's the annual % model that just doesn't work for me. Whenever I've spoken to an IFA, transparency is very difficult to achieve. I always make them convert the quoted % into a £ number - and then it's much more difficult to justify. Then ask for complete disclosure of any further commissions, payments etc they will receive from anywhere else and things get uncomfortable.
If you received an annual invoice, rather than it just being taken from a fund most people don't really track or focus on, things would be very different.
Petrus1983 said:
My brothers a chartered IFA and has invested thousands of hours into hard work and knowledge - as such he's very much not sales focused and instead knowledge focused. He's got clients in Hampshire so I'll send the OP his details.
Estate agents think of themselves as trusted property advisors too, the rest of us see the truth. I’ve been speaking (on a work basis) to one of the big firms recently as as alluded to on the previous page, the LTV of a customer is vast and as such they are spending a LOT of money on marketing and more intelligent ways to find more leads!
bhstewie said:
hstewie said:greengreenwood7 said:
B-Stewie often makes the point about ongoing fees, and he's right; But i think with a decent sized pot it's worth paying for and listening to top advice.
I think we see too many situations (and I've seen them with family) where people are paying 1-2% a year on everything they have for an hour visit (or phone call if you're not worth enough to receive a visit) a year and to be stuck in a multi-asset fund suitable for their risk appetite.With a little bit of time and inquisitiveness many (not all) people could do a lot (not necessarily all) of that themselves for 0.2% a year and when you see the impact of fees it should be thought provoking.
okgo said:
Petrus1983 said:
My brothers a chartered IFA and has invested thousands of hours into hard work and knowledge - as such he's very much not sales focused and instead knowledge focused. He's got clients in Hampshire so I'll send the OP his details.
Estate agents think of themselves as trusted property advisors too, the rest of us see the truth. I’ve been speaking (on a work basis) to one of the big firms recently as as alluded to on the previous page, the LTV of a customer is vast and as such they are spending a LOT of money on marketing and more intelligent ways to find more leads!
bhstewie said:
hstewie said: Absolutely I'm just saying understand what you're paying and who you're paying it to.
Funds and platforms are cheap.
You're quite right you're always going to be paying someone but you can do really sensible stuff for absolute buttons these days.
You could do the whole lot for 0.15% or probably less all-in if you wanted to and were happy doing it yourself.
If you are speaking to advisors make sure to be absolutely clear on every single cost that's involved.
As Car bon said above you don't always see a clear annual statement it's often little bits of cost shaved from different parts of your investments that all add up.
Transparency matters IMO.
I read a few threads on here that made this point, so I got rid of my IFA and did my own thing, which so far has worked well. The downside is that I have to pay someone for advice, which is ok but it’s tricky to find without them wanting to run the portfolio. Funds and platforms are cheap.
You're quite right you're always going to be paying someone but you can do really sensible stuff for absolute buttons these days.
You could do the whole lot for 0.15% or probably less all-in if you wanted to and were happy doing it yourself.
If you are speaking to advisors make sure to be absolutely clear on every single cost that's involved.
As Car bon said above you don't always see a clear annual statement it's often little bits of cost shaved from different parts of your investments that all add up.
Transparency matters IMO.
The upside is £££ in reduced charges and freedom to invest where I want. I used the low cost tracker model suggested and leave alone.
Thanks everyone, lots of food for thought. Going through the process of writing down the issues and reading the responses has helped enormously. However, It sounds like finding the right person is going to be a nightmare, and could end up costing a lot. I think I’ll try to focus on the pension part and sort/decide that one first myself.
Thanks for the offers of referrals.I’ll follow up on those in parallel.
Thanks for the offers of referrals.I’ll follow up on those in parallel.
Not necessarily a lot but I think you'll have a basic decision to make about how you want to pay what will almost certainly be "thousands" for professional advice.
Might be worth giving some rough details here on where the pensions are and what they are invested in and if you know what the fees are what the fees are.
And if you don't know what the fees are you might want to check the paperwork
Might be worth giving some rough details here on where the pensions are and what they are invested in and if you know what the fees are what the fees are.
And if you don't know what the fees are you might want to check the paperwork
Good luck!
Much of this isn’t rocket science. On the money side of things, have a watch of the video here, & take control!
More important (IMHO!) is visualising how you see your retirement years looking. How will you spend your time, who will it involve, what sort of things will define you for the next 30+ years.
We all spend a huge chunk of our life being defined by work. For some, the move to ‘retired’ is a difficult change. I was lucky in that regard: never cared much for work titles, a big (& varied) group of friends, & always had lots going on outside it.
Of course you need to do some budgeting, so you can figure out how much money you need to achieve your future lifestyle.
Take a browse of the enjoying retirement thread for ideas… & also this blockbuster on MSE for ideas on how much is enough. Feel free to leap to recent posts - the latter has been running since 2009
Many people suffer from OMY syndrome (One More Year), & the simple fact is that nobody is getting younger….enjoy some years in good health.
Much of this isn’t rocket science. On the money side of things, have a watch of the video here, & take control!
More important (IMHO!) is visualising how you see your retirement years looking. How will you spend your time, who will it involve, what sort of things will define you for the next 30+ years.
We all spend a huge chunk of our life being defined by work. For some, the move to ‘retired’ is a difficult change. I was lucky in that regard: never cared much for work titles, a big (& varied) group of friends, & always had lots going on outside it.
Of course you need to do some budgeting, so you can figure out how much money you need to achieve your future lifestyle.
Take a browse of the enjoying retirement thread for ideas… & also this blockbuster on MSE for ideas on how much is enough. Feel free to leap to recent posts - the latter has been running since 2009
Many people suffer from OMY syndrome (One More Year), & the simple fact is that nobody is getting younger….enjoy some years in good health.
gifdy said:
However, It sounds like finding the right person is going to be a nightmare, and could end up costing a lot. I think I’ll try to focus on the pension part and sort/decide that one first myself.
It shouldn't cost you anything more than your time. There have to be good IFA's out there - I just gave up before finding one It's a bit like estate agents, it's easy to be negative & they get a particularly hard time on places like this which are typically frequented by those with more than average knowledge - which may or may not be a good thing,
If you can convert all fees & other payments to a £ number - and can see value in that, then do it. Conversely, if you can't or don't, then don't do it.
Educate yourself as best you can first, then ask questions like those already raised - eg can I do better than a cheap index tracker ? etc. and is that still true net of all fees ? etc. How long is the advice likely to be good for ? Do you really need an ongoing relationship or should you just come back in 10 years ? Constant fiddling is usually not a good thing - there was an old anecdote that the best performing portfolios were those of dead clients..... as they just left them alone.
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