IFA worth the money?
Discussion
Hi, currently i have a few isa's with H-L. When i bought these they were in the wealth 150. Over the last yr or so i have received emails informing me that some have dropped out of this and recommend that i move them. So i spend about an hour reading through all the marketing but can never decide what to change to and end up doing nothing and i guess more than likely getting poorer returns. So would i be better using an IFA that has there finger on the pulse and pay higher charges but hopefully make more money than what i do now?
Edited by caterhamboy on Friday 1st July 22:40
Hi
Thats a value judgememt that you need to make. There are no guarantees that anyone will do any better than you.
You need to consider whether or not the additional costs of paying someone to give you advice represents good value to you, versus you reading more, researching more, in order to reach a position where you will feel confident enough to make your own investment decisions.
If you are time poor, or simply don't feel confident going it alone, go get some advice.
Look at a few different firms. Meet them all, without obligation or fee and see how you feel after that.
£65k is not going to give you access to everyone and at this sort of amount you are likely to get a model portfolio, multi-manager solution or some other packaged investment solution.
I hope this helps.
Rgds.
Thats a value judgememt that you need to make. There are no guarantees that anyone will do any better than you.
You need to consider whether or not the additional costs of paying someone to give you advice represents good value to you, versus you reading more, researching more, in order to reach a position where you will feel confident enough to make your own investment decisions.
If you are time poor, or simply don't feel confident going it alone, go get some advice.
Look at a few different firms. Meet them all, without obligation or fee and see how you feel after that.
£65k is not going to give you access to everyone and at this sort of amount you are likely to get a model portfolio, multi-manager solution or some other packaged investment solution.
I hope this helps.
Rgds.
I think there would be an inclination to do so.
A decent IFA would be happy to work with any platform though, of which Hargreaves is one. So, why not ask them if you can continue to use the platform to benefit from the competitive admin costs and then simply ask the IFA what the costs would be for them to provide advice on the funds themselves - asset allocation, monitoring of the funds, and anything else you were looking for.
Make sense ?
A decent IFA would be happy to work with any platform though, of which Hargreaves is one. So, why not ask them if you can continue to use the platform to benefit from the competitive admin costs and then simply ask the IFA what the costs would be for them to provide advice on the funds themselves - asset allocation, monitoring of the funds, and anything else you were looking for.
Make sense ?
Yes i think thats what i need, i like being able to log in and see what they are doing. How much as a ball park figure do you think an IFA would charge? I have just been reading on money saving expert about H-L marketing being all about kickbacks so you can spend hrs looking through and still be none the wiser.
Yes, HL aren't the samaritans that they may sometimes purport to be. Yes they often give up part of the trail commission, however their key revenue stream is from fund manager rebates, which can amount to up to 0.9% per annum. Interestingly, the FSA are about to publish a paper stopping these rebates, so I am not sure where the HL business model will go from there. Peter Hargreaves has said that he refuses to accept this, sadly for him, I think that the FSA don't take too kindly to being told what to do.
I would charge 1% per annum for this, however our mimimum charge is somewhat more than 1% of your portfolio, which is a problem you are likely to have at this level.
I have no doubt that others may be able to do this for less, however they are likely to be fairly small outfits, who won't have a better research capability than HL anyway (even adjusting for the 'rebate bias' that exists in HL's marketing)
I would charge 1% per annum for this, however our mimimum charge is somewhat more than 1% of your portfolio, which is a problem you are likely to have at this level.
I have no doubt that others may be able to do this for less, however they are likely to be fairly small outfits, who won't have a better research capability than HL anyway (even adjusting for the 'rebate bias' that exists in HL's marketing)
At this level, I wouldn't bother with Investment Trusts.
Find your adviser here http://www.unbiased.co.uk/
Good luck.
Find your adviser here http://www.unbiased.co.uk/
Good luck.
TFP said:
At this level, I wouldn't bother with Investment Trusts.
Find your adviser here http://www.unbiased.co.uk/
Good luck.
This is my problem, the whole area is so complex, the more you learn the less you realize you know! Why wouldn't IT's be suitable just out of interest?Find your adviser here http://www.unbiased.co.uk/
Good luck.
IFA's are just another pointless waste of money. Do your own research as in anything else.
See here for how worthy financial advise is, these are the big boys too.
http://ftalphaville.ft.com/blog/2011/07/01/610726/...
http://www.charlotteobserver.com/2011/06/30/241757...
http://www.ft.com/cms/s/0/4bd43894-904c-11df-ad26-...
http://www.theflyonthewall.com/permalinks/entry.ph...
Why pay for advice when a passive tracker will cost next to nothing and guarantee to beat many fund managers!?
See here for how worthy financial advise is, these are the big boys too.
http://ftalphaville.ft.com/blog/2011/07/01/610726/...
http://www.charlotteobserver.com/2011/06/30/241757...
http://www.ft.com/cms/s/0/4bd43894-904c-11df-ad26-...
http://www.theflyonthewall.com/permalinks/entry.ph...
Why pay for advice when a passive tracker will cost next to nothing and guarantee to beat many fund managers!?
TFP has provided the clearest and I have to say, best, advice and viewpoint on IFA's on any forum or thread I've read on PH.
I'm an AFPC qualified ex-IFA of 13 years myself and couldn't agree more.
A good IFA can't ensure your funds outperform the competition but can construct your financial affairs to meet your goals (as long as those goals are realistic).
I'm an AFPC qualified ex-IFA of 13 years myself and couldn't agree more.
A good IFA can't ensure your funds outperform the competition but can construct your financial affairs to meet your goals (as long as those goals are realistic).
It never ceases to surprise me how people will fail to see obvious things, IFA's I understand sell packaged products, these products merely have to track or just beat an index yet they are expensive to manage. Years ago my then IFA suggested a leading fund, the initial fees were if I remember 5 or 6%, this fund has failed in the interim to offer any real growth. The problem these funds are constrained in what they can do by the FSA, so all you can do is watch as your money or fund value diminishes whilst the provider still collects fee's.
Before anyone tells you, 65K is a lot of money and it deserves to be handled actively, there's loads of options to investigate via web, books etc. I have no problem paying big fee's if the results are there for all but often there are big fee's and costs with a best mediocre returns. On the other hand some people fell more comfortable with the purported protection of a large IFA but in my experience when things start to go wrong like they did a few years ago, no ones immune and the regulated funds had to sit by as the FSA has strict rules about cash ratios. I think you need to put a bit of research in to what you want as if you move anything it is of course likely to have a cost attached.
Before anyone tells you, 65K is a lot of money and it deserves to be handled actively, there's loads of options to investigate via web, books etc. I have no problem paying big fee's if the results are there for all but often there are big fee's and costs with a best mediocre returns. On the other hand some people fell more comfortable with the purported protection of a large IFA but in my experience when things start to go wrong like they did a few years ago, no ones immune and the regulated funds had to sit by as the FSA has strict rules about cash ratios. I think you need to put a bit of research in to what you want as if you move anything it is of course likely to have a cost attached.
Hyper10 said:
It never ceases to surprise me how people will fail to see obvious things, IFA's I understand sell packaged products, these products merely have to track or just beat an index yet they are expensive to manage. Years ago my then IFA suggested a leading fund, the initial fees were if I remember 5 or 6%, this fund has failed in the interim to offer any real growth. The problem these funds are constrained in what they can do by the FSA, so all you can do is watch as your money or fund value diminishes whilst the provider still collects fee's.
Before anyone tells you, 65K is a lot of money and it deserves to be handled actively, there's loads of options to investigate via web, books etc. I have no problem paying big fee's if the results are there for all but often there are big fee's and costs with a best mediocre returns. On the other hand some people fell more comfortable with the purported protection of a large IFA but in my experience when things start to go wrong like they did a few years ago, no ones immune and the regulated funds had to sit by as the FSA has strict rules about cash ratios. I think you need to put a bit of research in to what you want as if you move anything it is of course likely to have a cost attached.
Your understanding is incorrect. The clue in your text is "years ago". I suggest you re-acquaint yourself with the sector and what is available and at what cost, it is a different world these days, although I warrant there are some dinosaurs lurking still who still use mirror funds and bundled-charges products. They are easy to spot though.Before anyone tells you, 65K is a lot of money and it deserves to be handled actively, there's loads of options to investigate via web, books etc. I have no problem paying big fee's if the results are there for all but often there are big fee's and costs with a best mediocre returns. On the other hand some people fell more comfortable with the purported protection of a large IFA but in my experience when things start to go wrong like they did a few years ago, no ones immune and the regulated funds had to sit by as the FSA has strict rules about cash ratios. I think you need to put a bit of research in to what you want as if you move anything it is of course likely to have a cost attached.
As an IFA I routinely recommend platforms where fund manager rebates are applied in full, unlike HL, and my fees are also totally explicit. You appear to be suggesting investment in unregulated funds is the answer, which it may be to some investors, however you have ignored the concept of risk and that different investors have different appetites for risk. And there is enough risk in UCIS funds for any investor.
As an IFA it is incumbent upon me to make sure the investment recommended matches the investor's risk profile, and that it is regularly checked and the client given a review - which costs money. Added to this the advice on tax implications and such broader financial implications I think it unfair to dismiss the role of an IFA as a mere purveyor of packaged products.
In reply, I think that IFA's do suit some people, As for costs perhaps this has changed but not because IFA's have improved but because in 2012 all fees will be visible and known, this I think is regulatory ( correct me)
As for recommending anything, the only thing I recommended was the OP did a bit of research and looked at all options.
Risk is a fair point but again regulated or unregulated there's been some instances of failings in all funds,so neither option is 100% safe. Look at Barclays last year where a couple lost lots of money because an employee decided to change their risk profile.
An IFA is like a GP, has a general knowledge of matters but surely relies on more specialist providers to cover specific area's
I note you don't comment on returns or performance, the average performance funds has been nothing short of woeful over the last couple of years, maybe not the IFA's fault but all the time fees are being applied.
It would be unfair to say all IFA's are this or that but honestly speaking over the years I've found that the ones I've encountered didn't seem to see the long term potential and consequently I went my own way, others may be luckier.
As for recommending anything, the only thing I recommended was the OP did a bit of research and looked at all options.
Risk is a fair point but again regulated or unregulated there's been some instances of failings in all funds,so neither option is 100% safe. Look at Barclays last year where a couple lost lots of money because an employee decided to change their risk profile.
An IFA is like a GP, has a general knowledge of matters but surely relies on more specialist providers to cover specific area's
I note you don't comment on returns or performance, the average performance funds has been nothing short of woeful over the last couple of years, maybe not the IFA's fault but all the time fees are being applied.
It would be unfair to say all IFA's are this or that but honestly speaking over the years I've found that the ones I've encountered didn't seem to see the long term potential and consequently I went my own way, others may be luckier.
pacoryan said:
Your understanding is incorrect. The clue in your text is "years ago". I suggest you re-acquaint yourself with the sector and what is available and at what cost, it is a different world these days, although I warrant there are some dinosaurs lurking still who still use mirror funds and bundled-charges products. They are easy to spot though.
As an IFA I routinely recommend platforms where fund manager rebates are applied in full, unlike HL, and my fees are also totally explicit. You appear to be suggesting investment in unregulated funds is the answer, which it may be to some investors, however you have ignored the concept of risk and that different investors have different appetites for risk. And there is enough risk in UCIS funds for any investor.
As an IFA it is incumbent upon me to make sure the investment recommended matches the investor's risk profile, and that it is regularly checked and the client given a review - which costs money. Added to this the advice on tax implications and such broader financial implications I think it unfair to dismiss the role of an IFA as a mere purveyor of packaged products.
As an IFA I routinely recommend platforms where fund manager rebates are applied in full, unlike HL, and my fees are also totally explicit. You appear to be suggesting investment in unregulated funds is the answer, which it may be to some investors, however you have ignored the concept of risk and that different investors have different appetites for risk. And there is enough risk in UCIS funds for any investor.
As an IFA it is incumbent upon me to make sure the investment recommended matches the investor's risk profile, and that it is regularly checked and the client given a review - which costs money. Added to this the advice on tax implications and such broader financial implications I think it unfair to dismiss the role of an IFA as a mere purveyor of packaged products.
ringram said:
Yeah I can see that for some brain dead vegetables there may be a benefit. But if you know what google is you are better off saving your money and making your own decisions.
Yeah go google effective estate and tax planning coupled with active asset management and then access it all at a cost below that an adviser can provide it for because doing it yourself can bring you access to bulk group negotiated discounting.What a retarded statement.
It astounding that people are offering such forthright opinions, only to go an and demonstrate that they do not understand what IFAs do, what cost structures to expect, and what role different investment instruments might play when constructing a portfolio.
IFAs are not investment bankers. They did not package or trade in sub-prime mortgage related securities.
IFAs had no role in the structuring of banks, the level of sovereign debt carried by the UK or any other nation.
IFAs are not stockbrokers, and as such have no axe to grind with regard to any particular asset class.
And finally, should you ever think you need the services of an IT Consultant or Company Director, steer well clear. They're all crap ;-)
IFAs are not investment bankers. They did not package or trade in sub-prime mortgage related securities.
IFAs had no role in the structuring of banks, the level of sovereign debt carried by the UK or any other nation.
IFAs are not stockbrokers, and as such have no axe to grind with regard to any particular asset class.
And finally, should you ever think you need the services of an IT Consultant or Company Director, steer well clear. They're all crap ;-)
Basically we are all middlemen. There is nothing we can do that joe public cannot do himself with a bit of effort.
I dont buy the bulk deal idea. There are plenty of low cost share trading options, things like NSI index linked bonds etc to not worry about fancy structured product stuff. You can trade at a fraction of a percentage. So why pay someone many percent to tell you something you can find out yourself!?
The point being some people are too lazy to do the footwork and for them Im sure there is some advice thats worth the money.
As alluded to above we are all in the service industry, but Im not closed minded enough to see that any one person has a monopoly on infallible information.
Afterall an IFA is just a conduit of information as is an IT Consultant. Personally I dont want to pay anyone for anything I can do myself. Why would you!?
As always Caveat Emptor is paramount.
I dont buy the bulk deal idea. There are plenty of low cost share trading options, things like NSI index linked bonds etc to not worry about fancy structured product stuff. You can trade at a fraction of a percentage. So why pay someone many percent to tell you something you can find out yourself!?
The point being some people are too lazy to do the footwork and for them Im sure there is some advice thats worth the money.
As alluded to above we are all in the service industry, but Im not closed minded enough to see that any one person has a monopoly on infallible information.
Afterall an IFA is just a conduit of information as is an IT Consultant. Personally I dont want to pay anyone for anything I can do myself. Why would you!?
As always Caveat Emptor is paramount.
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