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juvenal

Independent Financial Advisers. What They Charge And What You Get.

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http://www.guardian.co.uk/money/2009/jun/2...visers-reviewed

First article I've seen talking about actual fees and commissions. Moneybox is always recommending IFA's, and never tackles the cost and drawbacks.

Worth a read for savers.

And look carefully at the set up commissions and 'trail fees'.

Taking a hypothetical 1% 'trail' per annum of a £100K pension pot over 25 years is jaw-dropping stuff. A lot of these 'products' manage to cream off a quarter to a third of the pot over its life.

What a sick joke.

Edited by juvenal

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The Guardian have made the mistake of looking at the Menu given to them and thinking that the maximums quoted are the actual commission payments.

For example my Menu says maximum commission of 4% of investment and 0.5% trail or fees of £125 an hour.

If I am discussing investing £50k then the fee I would charge would be £1000 which equates to 2% commission with 0.5% trail.

If you want financial advice and do not want to advise yourself, you have to see 3 IFAs and negotiate the actual fee/commission that will be charged by that adviser.

Using the menu is a waste of time.

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The earlier in life people learn that financial advisors have to make a living out of the advised product/solution the better.

This learning process usually means that people take more responsibility for sorting their own futures.

I would fully agree with that sentiment ;)

However that is what seems to have led to the BTL boom... :(

The likely outcome: a lot of destitute middle aged people :(

Lack of financial knowledge makes this impractical at the moment :blink:

Therefore fixing the incentives for the financial advisory industry has to be done...

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The earlier in life people learn that financial advisors have to make a living out of the advised product/solution the better.

This learning process usually means that people take more responsibility for sorting their own futures.

Yes. Thats absolutely right. The money spent of IFA is effectively wasted. My financial advisor from Hargreaves Lansdown was recommending I invest 2000 £ per month in unit trusts from October 2006. I am quite certain I would have lost out significantly if I would have followed his advise. Waste of space and waste of money. IFA never again.

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The Guardian have made the mistake of looking at the Menu given to them and thinking that the maximums quoted are the actual commission payments.

For example my Menu says maximum commission of 4% of investment and 0.5% trail or fees of £125 an hour.

If I am discussing investing £50k then the fee I would charge would be £1000 which equates to 2% commission with 0.5% trail.

If you want financial advice and do not want to advise yourself, you have to see 3 IFAs and negotiate the actual fee/commission that will be charged by that adviser.

Using the menu is a waste of time.

Trouble is with all these things, Joe Soap won't understand what 0.5% trail means in real terms, he'll think it sounds small but won't be able to think through the implications.... also a lot of people won't negotiaite, they'll go through an initial meeting etc and can't be bothered to go through another. Many won't negotiaite in any event.

For instance..... in your £50k example....... in my view a £1,000 fee would equate to a 2% commission (it's the same amount) , why would you also charge a 0.5% trail ..... to say that a £1,000 fee equates to a 2% commission and a 0.5% trail is misleading as the commission route is more expensive.

I have been badly ripped off by supposed advisers before (thankfully through complaints etc I didn't lose out), now I wouldn't trust them as far as I could throw them..... I have since though got advice from two or three without actually doing anything with them and then gone and made my own decisions which I have been more than happy with.... thats how I'll probably continue.

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Trouble is with all these things, Joe Soap won't understand what 0.5% trail means in real terms, he'll think it sounds small but won't be able to think through the implications.... also a lot of people won't negotiaite, they'll go through an initial meeting etc and can't be bothered to go through another. Many won't negotiaite in any event.

For instance..... in your £50k example....... in my view a £1,000 fee would equate to a 2% commission (it's the same amount) , why would you also charge a 0.5% trail ..... to say that a £1,000 fee equates to a 2% commission and a 0.5% trail is misleading as the commission route is more expensive.

I have been badly ripped off by supposed advisers before (thankfully through complaints etc I didn't lose out), now I wouldn't trust them as far as I could throw them..... I have since though got advice from two or three without actually doing anything with them and then gone and made my own decisions which I have been more than happy with.... thats how I'll probably continue.

I think you encountered a unit trust salesman and not a financial adviser :unsure:

Without being critical, if you won't pay for good advice, you can't complain that it isn't readily available :(

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I dont understand why people wouldn't manage their own investments. There are so many vehicles making it easy these days to invest in commodities, sectors, countries and regions without paying somebdoy to do it for you.

You can put all all these investments into your ISA or SIPP and trade them at your leisure.

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I think you encountered a unit trust salesman and not a financial adviser :unsure:

Without being critical, if you won't pay for good advice, you can't complain that it isn't readily available :(

No they were IFA's, one was from St James Place, the other Towry Law and the other a small little local firm.

I am not complaining good advice isn't available and I wouldn't mind paying for it, but what is charged is out of all proportion to the work involved.

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I dont understand why people wouldn't manage their own investments. There are so many vehicles making it easy these days to invest in commodities, sectors, countries and regions without paying somebdoy to do it for you.

You can put all all these investments into your ISA or SIPP and trade them at your leisure.

They dont know enough about finance and economics to make informed decisions :unsure:

They just do dumb things like BTL :(

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No they were IFA's, one was from St James Place, the other Towry Law and the other a small little local firm.

I am not complaining good advice isn't available and I wouldn't mind paying for it, but what is charged is out of all proportion to the work involved.

st james place are not ifa's

not that im defending ifa's

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No they were IFA's, one was from St James Place, the other Towry Law and the other a small little local firm.

I am not complaining good advice isn't available and I wouldn't mind paying for it, but what is charged is out of all proportion to the work involved.

The point I was trying to make is these guys are called IFAs but really they are product salesmen (usually unit trusts and structured products because they have the highest commisions) :(

I think good advice is not commonly available :(

But I'd agree most people are overcharged for what they get :(

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No they were IFA's, one was from St James Place...

HAHAHAHAHA

You really did you homework then. They got you.

This is NOT an IFA. Read the Guardian article if you still don't get it.

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They dont know enough about finance and economics to make informed decisions :unsure:

They just do dumb things like BTL :(

My brother had a £75k lump sum to invest in 2004.I advised him to buy a terraced house nearby and to let it.Had he followed my advice it's fair to assume that he would have had 60 months at say £400,about £24k less his costs,so maybe £18k from rent.The house peaked at around £115k in 2007 and is now probably worth £85-£90k.So in that period he would have made £30k.He actually invested the money with Barclays in unit trusts and his income has more or less exactly matched the decline in the value of his money,so he has had nothing.I fail to see how his advice was better than mine.

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Yes. Thats absolutely right. The money spent of IFA is effectively wasted. My financial advisor from Hargreaves Lansdown was recommending I invest 2000 £ per month in unit trusts from October 2006. I am quite certain I would have lost out significantly if I would have followed his advise. Waste of space and waste of money. IFA never again.

I'm investing a little more than that with H-L, and it's showing a profit.

But that was without a financial advisor. Just information available on the 'net (H-L website and elsewhere).

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My brother had a £75k lump sum to invest in 2004.I advised him to buy a terraced house nearby and to let it.Had he followed my advice it's fair to assume that he would have had 60 months at say £400,about £24k less his costs,so maybe £18k from rent.The house peaked at around £115k in 2007 and is now probably worth £85-£90k.So in that period he would have made £30k.He actually invested the money with Barclays in unit trusts and his income has more or less exactly matched the decline in the value of his money,so he has had nothing.I fail to see how his advice was better than mine.

Thats because the Barclays IFA was really a unit trust salesman calling himself an IFA selling poor expensive Barclays products :angry:

Thats really my point <_<

If it had been invested in a mix of savings accounts, gilts, overseas bond funds and a smaller amount of tracker funds, he would have done better ;)

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Guest Skinty

My parents went to an IFA recently and he recommended that they invested in commercial property.

Says it all really.

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I am looking for an IFA that can predict the future of the FTSE.

That's easy. The FTSE will move.

That'll be £2000 (payable within 30 days), plus 1% per year on the value of your investments. Thank you.

[fx: porca misèria being dragged off to the butchers, for giving advice while not licensed by the FSA]

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I lost faith in my IFA when he was caught up in the boom along with all the other sheep. He didn't recognise the bubble and seemed unable to distinguish between his rose-coloured spectacled view of the future and the future that was inevitable.

I've got better advice from this site, and the 'global' one, than from any IFA.

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I dont understand why people wouldn't manage their own investments. There are so many vehicles making it easy these days to invest in commodities, sectors, countries and regions without paying somebdoy to do it for you.

You can put all all these investments into your ISA or SIPP and trade them at your leisure.

+1

Anyone can set up an ISA and invest in simple trackers.Its very easy now to track most markets.A nice Asia Pacific ISA tracker alongside a FTSE one.When the time comes to take income,roll the funds into bond funds.There is your tax free income.Much better than a pension.

The problem is most people have no idea about investing.None.

Only this week at work one of the guys said his house is his pension.No other saving at all.Not even the company pension,that although rubbish at least puts in 4%.

The amount of people/couples i know bringing in £700-£900 a week yet no savings vehicle at all is frightening.

Their future is simple.Work until 65,or now 68,no chance of stopping a day early,then drop to the state pension/S2P.

The couples will see their incomes drop from £800 average to £290 average.

Most even now seem to be leveraging up with more mortgage debt.

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I dont understand why people wouldn't manage their own investments. There are so many vehicles making it easy these days to invest in commodities, sectors, countries and regions without paying somebdoy to do it for you.

You can put all all these investments into your ISA or SIPP and trade them at your leisure.

probably understand if you realise that the differences between IO and repayment mortgages are also lost on many.

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I dont understand why people wouldn't manage their own investments. There are so many vehicles making it easy these days to invest in commodities, sectors, countries and regions without paying somebdoy to do it for you.

You can put all all these investments into your ISA or SIPP and trade them at your leisure.

That would require a modicum of effort on their part.

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