Financial Advisors

[lukemg]

How much are you looking to save anyway - my policy when I had spare cash for ISA's was
Year1 - tracker - good foundation.
Year2 - General UK fund eg Fidelity special sits (slightly more aggresive than some because I am happy to risk)
Year3 - General European Fund - Gartmore (it's done sh1te 2%/year but it was my decision)
Year 4 - US + South East Asia funds - Jupiter.
Year 5 - A global fund.
Etc Etc.
After 10 years of this, you will have quite a stash, which if necessary can generate income (you can choose to reinvest this or have it paid to you)
Note - mix of fund managers, general funds chosen, fire and forget, DONT chase the market/bubble/latest BIG thing.
Note - always use a broker who can negotiate discounts etc (e.g. Hargreaves Lansdowne)
Note - These are 5 year minimum investments, if you will need the cash keep it liquid.
Of course, this presumes you have a property which counts as another investment and bunging some in a pension would be a good choice also (of course this will go in the market too). Spreads it around.
Yes you can choose bonds + cash ISA's which are safe, fixed interest investments, which could be a shorter term no-risk choice. History has shown that the market outperforms these, over longer terms.
P.S. My tracker has just gone up 8.5% in 6 months (ok it has just dropped a couple % in the last 2 days !) Still feels good when the statement comes through !

[oraclesmith]

Agreed. I found that out for myself after a while. If you can get a risk profile form (a la FSA) from somewhere you can do it yourself. Then join a funds supermarket and pick funds based on your attitude to risk - eg. corp bonds, special sits etc. Mix in some property funds and you've cooked your opportunities.

[IR35 Avoider]

Seems I am in the minority who disagree.

Why do we all use an accountant? Because they are specialists, have greater and focused knowledge and (as often argued here) will cost less than they save you. My view is that a good IFA will be the same

See my comment earlier in the thread. There are useful things an IFA can do, though none I would personally pay for. For example they could advise on asset allocation, or help you work out how much you need to save to meet your objectives, or give you the benefit of their general knowledge of investing.

The one thing you must not pay them to do is pick investments for you. The idea that one should pay an expert for help with this is a perfectly common-sense view adopted by many people approaching this issue, but there are solid reasons from economic theory why that view is wrong. (Well as solid as economic theory ever gets.)

Economic theory says that ever pound you pay a fund manager to manage your fund or an IFA to choose the fund in the first place simply reduces the risk-adjusted return you can expect by the amount you've paid. The fact that you might otherwise have ended up invested in different things is irrelevant; the different things would, with average luck, have given you the same risk-adjusted returns. Of course no-one has exactly average luck, you would have actually done better or worse with the "different things", but the difference would be entirely random and not predictable in advance.

[lukemg]

I wouldn't touch 'em , although I appreciate it can be a mystery what to do ! When my dad was looking to make some investments he was recommended to some chump who bunged it all in Japan (it only went up he said) and lost the lot. My dad never trusted anyone else again, he learnt how it worked and made his own decisions, some bad, more good.
What's the betting the IFA says - actually you have a good spread of investments/insurance stay as you are ? Or - you are well advised to put 7k into a very low fee tracker which will follow the market and do better than 70-80% of managed funds when you consider the costs ?
No - he won't say either of these because they mean no commision for him.
Get on fool.co.uk, read all the guides and keep it simple.
If you have dependents - you need life insurance because permies get death in service - you don't.
If not - your estate can cover the cost of the box - insurance not required.
If you have less than 7k spare cash a year - bung into shares ISA - tracker would be good start (see fool for cost comparison). Computer picks the shares/proportions = low costs.
Consider bunging some into a SIPP (hargreaves lansdowne do low cost one, invested with a multi-manager fund - spread across numerous funds to reduce risk)
Got more than this spare - pay off your mortgage or get a bigger house or spend it on cars, holidays, champagne etc.
Think an IFA can guess the market - if they could why are they an IFA and not rich ? Think you can guess the market/bonds/metals/commodities - you can't. Get a general fund and ride the trend, as long as you think 5-10 years you will be fine.
500 quid please...

[oraclesmith]

I used an IFA for a few things in the past; eg. pension re-positioning, cheap mortgage and stocks & shares ISAs. With the stocks & shares they pointed me in the right direction re. risk profile and suitable funds, but once they'd set me up with a funds supermarket and I'd done some investing I found I didn't need them anymore.

The point about actively managed funds is a good one. Index trackers, for example, have tiny acquisition and running costs, and yet they beat a good proportion of the actively managed ones for most risk profiles.

In my opinion, if you're reasonably organised with money but need a second opinion then you might benefit from a short session with an IFA to do a risk profile and spot any glaring inefficiencies in your personal finances. To save session fees you could allow them to make an initial investment for you.

If you're looking to purchase company shares and not OIEC's or other funds, then that's a different matter.

[martinb]

My view is it is not worth paying an IFA anything. Firstly I question their independence (unless fee based) but more importantly you can get all the info you need to make equally reasoned choices with some (initially fairly basic) research of your own.

I recommend Motley Fool (I am unconnected in any way)

http://www.fool.co.uk/

They have straightforward guides which explain the basics and excellent bulletin boards. Any questions I had had already been asked and answered at length by others on the Board.

Seems I am in the minority who disagree.

Why do we all use an accountant? Because they are specialists, have greater and focused knowledge and (as often argued here) will cost less than they save you. My view is that a good IFA will be the same. Sure you can look at Motley Fool all day and get info there. Its a bit like reading these boards for advice on accountancy - useful background info, some good pointers and healthy discussion. But, in my view, you'll benefit from having someone independent take a more wholistic approach.

I can say with absolute 100% certainty they I am significantly better off having used an IFA for the past 15 years than I would have been if I had not.

[Darren@UptonAccountants]

Ifa

I use the Glash who appears on this site from time to time....email james.glasheen@paramountifa.co.uk.

[IR35 Avoider]

Seconded. Don't waste your money. A post on the bulletin boards there will usually be enough.

Thirded. Especially as it sounds like you want to pay them to pick investments for you. Investment advice is a bizarre specialism, in that it must be the only sphere of knowledge in which paying for expert advice is actually likely to lead to worse outcomes than if you'd gone it alone. This is not just me pontificating; a consequence of the efficient markets hypothesis is that it should be impossible in principle to improve returns on capital by paying someone to direct where it should be invested. Whether that person is an active fund manager choosing securities or an IFA choosing a fund manager makes no difference.

[Sockpuppet]

I think they need a test please delete.

[Lockhouse]

My view is it is not worth paying an IFA anything. Firstly I question their independence (unless fee based) but more importantly you can get all the info you need to make equally reasoned choices with some (initially fairly basic) research of your own.

I recommend Motley Fool (I am unconnected in any way)

http://www.fool.co.uk/

They have straightforward guides which explain the basics and excellent bulletin boards. Any questions I had had already been asked and answered at length by others on the Board.

Seconded. Don't waste your money. A post on the bulletin boards there will usually be enough.

[the guy with the bowtie]

My view is it is not worth paying an IFA anything. Firstly I question their independence (unless fee based) but more importantly you can get all the info you need to make equally reasoned choices with some (initially fairly basic) research of your own.

I recommend Motley Fool (I am unconnected in any way)

http://www.fool.co.uk/

They have straightforward guides which explain the basics and excellent bulletin boards. Any questions I had had already been asked and answered at length by others on the Board.

[Bluebird]

depends where you are, I use BatesMillfield in Bristol - they seem to do a lot with contractors

[Denny]

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