Is this reasonable from an IFA?
Discussion
To be fair, if I call them and ask a question they answer it and are very polite.
However, if it wasn't for me proactively asking questions, the only communication I would have had from them, in the most tumultuous financial year since 192x, would have been an invitation to a seminar and a Christmas Card.
Am I expecting too much?
However, if it wasn't for me proactively asking questions, the only communication I would have had from them, in the most tumultuous financial year since 192x, would have been an invitation to a seminar and a Christmas Card.
Am I expecting too much?
Hi, as an IFA it largely depends on the basis that the business was written, if you are paying a trail commission then it would be only right that the IFA contacts you on an annual basis (as a minimum) for a meeting and general overview of your finances. If no form of ongoing renumeration was agreed then most IFA's tend to act on a reactive basis as opposed to proactive.
IFA's do tend to get a fair bit of flack for lack of customer service/contact and rightly so in a lot of cases, being honest its largely down to how much business you have and if they get on with you.
As you say, this year has been very turbulent and this is the time that clients need advice the most, in my book clients have a long memory and if you are not out and about meeting the client then the loss of client and their business is inevitable. Hope this helps.
IFA's do tend to get a fair bit of flack for lack of customer service/contact and rightly so in a lot of cases, being honest its largely down to how much business you have and if they get on with you.
As you say, this year has been very turbulent and this is the time that clients need advice the most, in my book clients have a long memory and if you are not out and about meeting the client then the loss of client and their business is inevitable. Hope this helps.
Thanks for the reply. They obviously take a commission from whatever they sell, but also a fee based on the value of the funds. They are also stockbrokers and run their own ISAs, which I hold.
They don't promise to 'analyse investments every day and make recommendations accordingly' (like the previous one who patently did nothing of the sort and ended up at the FOS) but the general response is 'Investments are long term 3-5 years so don't worry about it'. With respect, I can say that too. When I asked why they charge me for losing my money, they stated that they still have to do the work (they have a boffin at a PC who buys and sells stuff). I countered with the question: 'If I did some photography for you, then lost the memory card, would you still pay me because I'd done the work?' They changed the subject.
I'm just wondering what I'm paying for really. There are very clever people out there making plenty of money in all market conditions, but it seems impossible to tap into it.
They don't promise to 'analyse investments every day and make recommendations accordingly' (like the previous one who patently did nothing of the sort and ended up at the FOS) but the general response is 'Investments are long term 3-5 years so don't worry about it'. With respect, I can say that too. When I asked why they charge me for losing my money, they stated that they still have to do the work (they have a boffin at a PC who buys and sells stuff). I countered with the question: 'If I did some photography for you, then lost the memory card, would you still pay me because I'd done the work?' They changed the subject.
I'm just wondering what I'm paying for really. There are very clever people out there making plenty of money in all market conditions, but it seems impossible to tap into it.
For most clients having a review every 6-12 months seems to work as they don't wish to make choices every day or week but I do have clients who are far more proactive, I suppose it boils down to how much input on buying/selling/switching funds etc you wish to have. Certainly, historically investments should be held for the medium term but this theory has been shown to be not much use with two market down turns in 5 years negating the growth made from 2003. Anyone worth their salt would have started to diversify clients portfolios back in Oct/Nov 2007 as the writing was on the wall.
You probably have already done so but it would be worth really nailing down what charges are incurred and how many transactions are actually being processed and why. Some of my clients actively manage their own portfolios albeit insurance company based platforms, just a thought.
You probably have already done so but it would be worth really nailing down what charges are incurred and how many transactions are actually being processed and why. Some of my clients actively manage their own portfolios albeit insurance company based platforms, just a thought.
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I wasn't aware that IFAs were able to time the market.
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Thats true Noel on a day to day basis, apologies but I wasn't implying anything other than it was becoming fairly obvious that we were entering a downturn for 2008 and re-adjustment of portfolios for some clients was prudent for potential capital preservation.
I expect IFAs to know more about the markets than I do. Not everything, but more than me.
Annoyingly (my fault) I met them back in about March and suggested I get out of equities because I felt something was going to happen. They talked me out of it. I'd also predicted Japanese-style stagflation but they don't believe 'sentiment', only what their computer tells them - and of course their computer tells them the same as everybody else's computer.
It's the second time I've had several years of growth wiped out by trusting IFAs, so my 'pot' on retirement will probably be only half what it might have been. Frankly, over the years I'd have done as well if not better in a building society. They will poo-poo such things of course, but it's a great way to beat a falling market, while all the clever people wring their hands in despair and start writing reports with the word 'volatility' in them. No, they're not volatile, they crashed, and they sat and watched it.
Am I a bit pissed off? Well yes, I suppose I am. There are many things I can't do - servicing a car for example - so I pay a bloke to do it better than I could. Similarly if I pay somebody for financial advice, I expect them to do something, not just enjoy the ride. The annual review ('Well Mr Simpo, this one's gone up a bit, this one's gone down a bit, what about an ISA?') is quite ridiculous. Do traders just pop into the office once a year?
However, I expect I'll stay with them because I don't believe any of the others will do any better, and they are quite good at long-term planning. And they are very polite, and I do get a Christmas card.
Annoyingly (my fault) I met them back in about March and suggested I get out of equities because I felt something was going to happen. They talked me out of it. I'd also predicted Japanese-style stagflation but they don't believe 'sentiment', only what their computer tells them - and of course their computer tells them the same as everybody else's computer.
It's the second time I've had several years of growth wiped out by trusting IFAs, so my 'pot' on retirement will probably be only half what it might have been. Frankly, over the years I'd have done as well if not better in a building society. They will poo-poo such things of course, but it's a great way to beat a falling market, while all the clever people wring their hands in despair and start writing reports with the word 'volatility' in them. No, they're not volatile, they crashed, and they sat and watched it.
Am I a bit pissed off? Well yes, I suppose I am. There are many things I can't do - servicing a car for example - so I pay a bloke to do it better than I could. Similarly if I pay somebody for financial advice, I expect them to do something, not just enjoy the ride. The annual review ('Well Mr Simpo, this one's gone up a bit, this one's gone down a bit, what about an ISA?') is quite ridiculous. Do traders just pop into the office once a year?
However, I expect I'll stay with them because I don't believe any of the others will do any better, and they are quite good at long-term planning. And they are very polite, and I do get a Christmas card.
Edited by Simpo Two on Wednesday 17th December 11:16
Simpo Two said:
To be fair, if I call them and ask a question they answer it and are very polite.
However, if it wasn't for me proactively asking questions, the only communication I would have had from them, in the most tumultuous financial year since 192x, would have been an invitation to a seminar and a Christmas Card.
Am I expecting too much?
Do they do periodic fact finds and checks to see if your attitude to risk/personal circumstances has changed?However, if it wasn't for me proactively asking questions, the only communication I would have had from them, in the most tumultuous financial year since 192x, would have been an invitation to a seminar and a Christmas Card.
Am I expecting too much?
Ginge R said:
Do they do periodic fact finds and checks to see if your attitude to risk/personal circumstances has changed?
Actually I can't imagine anything more boring than box-ticking, 1-5 yadayada; we know each other a bit better than that. Distilling it all down, the brief is 'do better than average, because you're supposed to be smarter than me, aka Joe Punter'.I am an IFA and plead guilty to falling into the 'average IFA/ laissez faire' approach with less than frequent client reviews... which is why I am now working more closely with my colleague who is a bit of an investment guru when it comes to markets/timing etc with monthly reporting/accountability - far too much to go into here but most of his (and some of mine :-)) clients have been predominantly in CASH since August '07... we believe the current rally is a short term spike and the markets will fall further/remain very volatile until 2nd Quarter next year (at least).
HTH.
HTH.
Simpo Two said:
Ginge R said:
Do they do periodic fact finds and checks to see if your attitude to risk/personal circumstances has changed?
Actually I can't imagine anything more boring than box-ticking, 1-5 yadayada; we know each other a bit better than that. Distilling it all down, the brief is 'do better than average, because you're supposed to be smarter than me, aka Joe Punter'.There could be any number of reasons why regular contact is important.
I think there are two things here. One is client reviews, but then if I get married I can tell them so. The other is pure investment performance. One is financial planning, the other is maximising investments. One is easy/can be taught, the other requires skill, judgement and effort and is hard.
pjac67 said:
I am an IFA and plead guilty to falling into the 'average IFA/ laissez faire' approach with less than frequent client reviews... which is why I am now working more closely with my colleague who is a bit of an investment guru when it comes to markets/timing etc with monthly reporting/accountability - far too much to go into here but most of his (and some of mine :-)) clients have been predominantly in CASH since August '07... we believe the current rally is a short term spike and the markets will fall further/remain very volatile until 2nd Quarter next year (at least).
HTH.
I would love to meet someone that is able to time the markets better than random over a long period. I assume your guru friend has a 30 year track record of doing this?HTH.
NoelWatson said:
I would love to meet someone that is able to time the markets better than random over a long period.
If the only thing that can be achieved is 'random', I may as well get a monkey and put it in front of typewriter. They will achieve 'random' as well, with the added bonus that I might get the Complete Works of Shakespeare as well.Simpo Two said:
NoelWatson said:
I would love to meet someone that is able to time the markets better than random over a long period.
If the only thing that can be achieved is 'random', I may as well get a monkey and put it in front of typewriter. They will achieve 'random' as well, with the added bonus that I might get the Complete Works of Shakespeare as well.http://www.investorhome.com/darts.htm
Simpo Two said:
When I asked why they charge me for losing my money, they stated that they still have to do the work (they have a boffin at a PC who buys and sells stuff). I countered with the question: 'If I did some photography for you, then lost the memory card, would you still pay me because I'd done the work?' They changed the subject.
Thats not a valid comparison.If you did the work in taking the photos there would be a core cost in materials, they have a core cost in staff and overheads and trading fees. If after selling them your photos at £20 each they were appraised a year later and only worth £10, you'd tell them that was their bad luck, same as they wouldnt pay you another £10 per photo if they had gone up in value as a piece of art. Same for them, your contract is for them to procure the asset for you with the hope it will go up in value.
emicen said:
Simpo Two said:
When I asked why they charge me for losing my money, they stated that they still have to do the work (they have a boffin at a PC who buys and sells stuff). I countered with the question: 'If I did some photography for you, then lost the memory card, would you still pay me because I'd done the work?' They changed the subject.
Thats not a valid comparison.If you did the work in taking the photos there would be a core cost in materials, they have a core cost in staff and overheads and trading fees. If after selling them your photos at £20 each they were appraised a year later and only worth £10, you'd tell them that was their bad luck, same as they wouldnt pay you another £10 per photo if they had gone up in value as a piece of art. Same for them, your contract is for them to procure the asset for you with the hope it will go up in value.
NoelWatson said:
pjac67 said:
I am an IFA and plead guilty to falling into the 'average IFA/ laissez faire' approach with less than frequent client reviews... which is why I am now working more closely with my colleague who is a bit of an investment guru when it comes to markets/timing etc with monthly reporting/accountability - far too much to go into here but most of his (and some of mine :-)) clients have been predominantly in CASH since August '07... we believe the current rally is a short term spike and the markets will fall further/remain very volatile until 2nd Quarter next year (at least).
HTH.
I would love to meet someone that is able to time the markets better than random over a long period. I assume your guru friend has a 30 year track record of doing this?HTH.
pjac67 said:
NoelWatson said:
pjac67 said:
I am an IFA and plead guilty to falling into the 'average IFA/ laissez faire' approach with less than frequent client reviews... which is why I am now working more closely with my colleague who is a bit of an investment guru when it comes to markets/timing etc with monthly reporting/accountability - far too much to go into here but most of his (and some of mine :-)) clients have been predominantly in CASH since August '07... we believe the current rally is a short term spike and the markets will fall further/remain very volatile until 2nd Quarter next year (at least).
HTH.
I would love to meet someone that is able to time the markets better than random over a long period. I assume your guru friend has a 30 year track record of doing this?HTH.
http://www.noelwatson.com/blog/PermaLink,guid,fdd3...
I am intrigued that someone can find an edge that allows them to beat the market. More and more we are seeing examples of people that were supposed to be able to do this blow up - Miller is the latest example
http://en.wikipedia.org/wiki/Bill_Miller_(finance)
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