Any tips on finding a good IFA?

[richard at home]

Getting to a point where I need to look at my pensions, savings investments etc.

Any tips on looking for an IFA? I've always thought that a good financial advisor will be retired at 40 an living in St.Tropez...

I've also always wondered why they get paid regardless of actual performance of the investments!

Anyway, I guess it's mainly a case of gut feeling when you meet them after picking a few off of unbiased.com or suchlike.

[LeoSayer]

The video below is a pretty good explanation.

IFAs can't guarantee you much other than getting your finances in the best position to meet your goals.

That generally means you will be exposed to the risk of loss and unlikely to get super wealthy.

Just because you might make a loss doesn't mean it was the wrong strategy. Even leaving cash in the bank leaves you with a loss against inflation.

[bitchstewie]

Generally IFA's are all about goals and timelines and plans and ensuring you stick to them.

If you meet one who claims he can outperform the markets be very suspicious.

Keep in mind for many people there's now an "advice gap" where unless you're seriously well off many IFA's may not be interested because candidly you're not work it for them under the charging models many use.

[Derek Chevalier]

richard at home said:

I've always thought that a good financial advisor will be retired at 40 an living in St.Tropez...

It really depends what you mean by "good".

1. "Good" could be an adviser that generates a lot of revenue by having many hundreds of clients. Given that adviser has finite time, you'd have to ask yourself whether you'd get the service you were looking for should you hire this adviser

2. "Good" could be an adviser that has some secret insight into the financial markets and can generate outsize returns. Unfortunately, as with 99.99% of other market participants, this realistically isn't going to be possible, although you won't find a shortage of people telling you that it is (if you'd only invest with them!).

As an aside, there aren't many professions that will allow you to lead the St Tropez life from 40 onwards, especially if you regularly get dragged into the Palmiers Saturday afternoon madness

richard at home said:

I've also always wondered why they get paid regardless of actual performance of the investments!

Hopefully #2 above explains it. Hedge funds might charge on a 2 and 20 (or similar basis), but again, realistically, the ones that have the ability to generate excess returns have no need for your money!

richard at home said:

Any tips on looking for an IFA?
Anyway, I guess it's mainly a case of gut feeling when you meet them after picking a few off of unbiased.com or suchlike.

Unbiased and Vouchedfor are worth a go.

I'd check the advisers website to see who they tend to work with and what their process is.

Hopefully their process will be based on building a financial plan

https://www.cisi.org/cisiweb2/financial-planning-w...

The initial meeting should be about:

Do you get on well together?
Finding out if you are a good fit - for example you are just starting out on your investing journey, you probably don't need a full financial planning service.
Can the adviser add value? This obviously depends on your requirements

Investments (other than getting a rough idea of your overall net worth) and potential solutions are unlikely to be discussed at this stage (and as above, be wary of someone that sells themselves on performance).

[Derek Chevalier]

LeoSayer said:

The video below is a pretty good explanation.

IFAs can't guarantee you much other than getting your finances in the best position to meet your goals.

That generally means you will be exposed to the risk of loss and unlikely to get super wealthy.

Just because you might make a loss doesn't mean it was the wrong strategy. Even leaving cash in the bank leaves you with a loss against inflation.

I think I've mentioned before, the Rational Reminder podcast and community are excellent.

https://community.rationalreminder.ca/
https://rationalreminder.ca/podcast-directory

[Jaguar steve]

The first question to ask any IFA is are you worth your fee? If I pay you £X for your services will you be able to make me £X + better off?

If you don't get a positive answer to that then see what you can discover about the overall big picture yourself for nothing first.

[Derek Chevalier]

Jaguar steve said:

The first question to ask any IFA is are you worth your fee?

I'm assuming you are genuinely expecting some of them to say no?

[bitchstewie]

Jaguar steve said:

The first question to ask any IFA is are you worth your fee? If I pay you £X for your services will you be able to make me £X + better off?

If you don't get a positive answer to that then see what you can discover about the overall big picture yourself for nothing first.

Honestly this seems naive to be polite.

How many people do you know who if you ask them if they're worth what they're asking you pay them will say "no"?

I don't work in the finance industry and for many people I'm cynical of the need for an IFA but I appreciate some people don't have the time or willpower to do their own research.

For someone going down the IFA route please appreciate that it definitely isn't and shouldn't be about how much better off they'll make you in so much as any IFA claiming they can outperform the markets should set off massive red flags.

Richard perhaps have a read of these as they're plain English.

https://www.vanguard.co.uk/content/dam/intl/europe...
https://www.vanguard.co.uk/content/dam/intl/europe...

Edited by bhstewie on Friday 7th October 08:33

[Red9zero]

bhstewie said:

Keep in mind for many people there's now an "advice gap" where unless you're seriously well off many IFA's may not be interested because candidly you're not work it for them under the charging models many use.

My wife is an IFA and as we both wfh I get to hear some of her spiel. When she gets to the part where she mentions the fees, it often goes a bit quiet (although occasionally the caller does get a bit shouty) and they say they will have to think about it

[Phooey]

No doubt there are a few good IFAs out there, but finding 'a good one' that doesn't want to feed off you forever will be difficult (you may be happy for this?). It may be that you just need some simple guidance and not a marriage. It wouldn't cost anything - and you'll certainly gain from having a chat with Nik Burrows (intelligent Money - top of page) and most people (I know) that have spoken to him would agree he is very knowledgeable.

[Derek Chevalier]

bhstewie said:

Keep in mind for many people there's now an "advice gap" where unless you're seriously well off many IFA's may not be interested because candidly you're not work it for them under the charging models many use.

Hopefully something that Pete Matthews et al are helping to close in some way

https://meaningfulacademy.com/

and maybe we'll see more of the standalone financial planning and/or advice that is becoming more common in the States

But irrespective of the charging model, genuine financial planning (assuming that is what you are getting) takes significant time, and therefore comes at a cost.

[Slowboathome]

Shop around. Expect to interview at least five.

Last time I needed an IFA I wanted someone to set up a SIPP and move my investments into it. I spoke to three advisors. One wanted to charge me £3k for the work, another assured me she would be monitoring my investments on a weekly basis, and buying/selling when she thought neccessary. The third understood what I wanted (ie a one-off piece of work) and did it for £800.

Key questions to ask any IFA are:

1. Can you outperform the market? (as mentioned above)
2. Why would you choose a managed fund over an index tracker?
3. In what situations would have you advised clients to sell a particular fund and buy another?
3. Will you do the work on a fixed-fee rather than percentage basis?

[Derek Chevalier]

Slowboathome said:

nother assured me she would be monitoring my investments on a weekly basis, and buying/selling when she thought neccessary.

[richard at home]

Thanks for all the replies!

Last time I looked at IFA's, I met about 5 and none really convinced me to part with 1% per annum (or what ever their fees were at the time). They were all talking about investing in funds. In the end I just picked a few blue chip shares and invested myself. The results have been ok despite the drama of covid, putin and truss. Luckily one company was a pharma so that's done spectacularly. I cut out at least 2 middle men of course.

Now I am getting towards a time where I should rationalise everything to provide a pension income.

I'll do the rounds with a few IFA's from Vouched for and unbiased and see If my gut decides the fee's might be worth it. I will have the FT questions list on hand which I won't post here due to copyright but its not hard to find.


I have a couple of other questions which are related but I'll start another thread on those.

[vulture1]

For guys.
Learn about compound interest.
Never get married


For woman
Get married
Be hot

In all seriousness I'd assume most people looking in the finance section of pH would be pretty financially savey.

[richard at home]

vulture1 said:

For guys.
Learn about compound interest.
Never get married


For woman
Get married
Be hot

In all seriousness I'd assume most people looking in the finance section of pH would be pretty financially savey.

Ha! You're not wrong there. Financially savey? I think so, up to a certain level.

[Slowboathome]

Derek Chevalier said:

I know! She was a bit of a manic character........

[MisanoPayments]

Op, I can recommend you an IFA. I've known him for about 12 years (he did my pension at a previous employer) and he has trusted me to look after his clients who need my services :-)

[bitchstewie]

richard at home said:

Thanks for all the replies!

Last time I looked at IFA's, I met about 5 and none really convinced me to part with 1% per annum (or what ever their fees were at the time). They were all talking about investing in funds. In the end I just picked a few blue chip shares and invested myself. The results have been ok despite the drama of covid, putin and truss. Luckily one company was a pharma so that's done spectacularly. I cut out at least 2 middle men of course.

Now I am getting towards a time where I should rationalise everything to provide a pension income.

I'll do the rounds with a few IFA's from Vouched for and unbiased and see If my gut decides the fee's might be worth it. I will have the FT questions list on hand which I won't post here due to copyright but its not hard to find.


I have a couple of other questions which are related but I'll start another thread on those.

How much do you already know?

Respectfully if you’ve managed to buy a few random shares it suggests you could buy a tracker or lifestrategy fund or any other sensible investment.

Comes back to the what are you doing that makes you think an IFA adds value?

[boyse7en]

bhstewie said:

Keep in mind for many people there's now an "advice gap" where unless you're seriously well off many IFA's may not be interested because candidly you're not work it for them under the charging models many use.

That's my experience. I've got (currently) around £100k in various pensions and i want advice about whether to consolidate them, change providers etc. Basically to either be reassured I'm doing the right thing or be told where i could get better returns.

None of the local ones are interested unless i have at least £250k in "investable assets" or will be investing more than £12k per annum.