How do you know if your IFA is doing their best?

[SoTiredNeedHoliday]

Just that really. I am not sure and think I need to get a review of our finances by someone independent. How else do you know?

Do you have an annual review with them? If so, how did it go and were you happy with the gains (if any?).

Most IFAs use fairly standard model investment portfolios, depending on your goals, attitude to risk, age etc. This allows them to review the performance collectively across their clients. Unless you are a high net worth client with a more bespoke service?

Of course it’s always possible another IFA could do better, and could be worth shopping around if you’re not sure you’re getting the best bang for your buck.

How long have you been with them? Were they recommended to you? How much experience do they have?

how have your investments done? What % have they made this year? Have you talked to your IFA about your expectations?

You can ask another IFA to review your investments, sure., but it will cost you.

I feel the fees are very high for the returns we are getting.

In that case, you need to shop around. You need to be happy with the person you entrust with your money.

Our IFA worked for a company that sold out to an outfit called Superbia, which appears to be a relatively new company intent on buying up smaller independents. We let it run for a year to see the effect on our portfolios, however, at the last review earlier this year the IFA recommended switching one of our larger funds (six figures) to a fund operated by (surprise, surprise) Superbia. At that point, we no longer considered him to be independent, and that Superbia are probably shaping up to run on the same model as SJP.

We left; the trust had gone, and we are currently in the process of swirching to another adviser.

Most IFAs don't consistently outperform standard index trackers after fees and don't really add any value unless you have a substantial 6 figure sum to invest so you could significantly reduce the fees you pay by switching to passive funds offered by the same company.

But if you do fall into this category, perhaps their fees will be negotiable seeing as you're probably paying them thousands of pounds a year.

Are you with SJP by any chance?

You don’t need an IFA. Look up rebel finance school on Facebook or you tube. Watch their course (from episode 6 onwards if you’re already fairly financially savvy, from the start if you’re not), leave your IFA and do it yourself via a global index tracked fund

absolutely not! They are a nightmare

We used to have a pro active financial advisor until the company was bought over by Lloyd Ascot. The advisor we got was absolutely useless...we could not believe how bad he was. We left and now deal with Fidelity directly.

What level are you operating at?

My Financial Advisor does my tax return online with me and I'm hugely grateful. My savings are in an NS&I Income Bonds account. (I'm v. risk averse.) They were recommended to me by my sister and her husband (who's pretty damn knowledgeable.) You might be richer than me,

Unless you're a seriously high net worth individual, please just educate yourself. IFAs are expensive and their fees are eating into your returns.

As a previous poster has mentioned, passive funds are cheaply available and work for most people. And diversify.

@savvy7 I agree with that. We used an IFA as we want to manage IHT and also plan for our children's education and early adulthood

If you are looking to manage IHT then I’m assuming you have substantial assets ie more than £1m. If this is the case and you are worried about leaving a big IHT bill with not enough cash in your estate to pay it, then a good financial planner with tax knowledge or input is essential unless you are able to educate yourself in financial planning and the tax implications. However you should first do a logic check to make sure you really do have an IHT issue.

If you do then I would look for a local firm of accountants who have a wealth management service with access to a tax expert rather than a typical IFA.

Knowing that your IFA is doing their best is not a great concern really. Their best might be garbage.

When it comes to investments most IFAs (and FAs) cannot and do not beat a simple low-cost index tracker, so you would likely have a better return by doing this yourself.

Warren Buffett has advised his wife to do this (just buy index trackers) once he is dead.

Tax and estate planning and trusts etc. are a different matter altogether.

So investments handle yourself, but the rest it doesn’t hurt to get some more specialized advice from an IFA or accountant as necessary. For example, if you have a house and no mortgage but do have car finance at 10.9% then you need your head looking at 😂You should get a short term mortgage at 5%. Wealthy people often have mortgages purely because it’s the cheapest way to borrow money.

I knew someone at university that took out the student loans simply to buy US stocks with it, they made a killing since 2002 and haven’t had to pay any of the loan back - they run their own Ltd Co. but they choose for their company to not pay them enough to hit the student loan repayment level. Their student loan debt will eventually be wiped from existence. Remember these systems are set up by rich people to take advantage off with the low and middle classes being the ones paying for them.

An IFA's job is not really about performance. They are not investment managers.

Their job is to put a strategy in place to assist you in meeting your goals. This may or may not include an investment recommendation. The strategy may involve some assistance with tax reduction and using allowances to your advantage.

I guess if you fail to meet your goals due to poor performance or high charges you know your IFA has let you down.

So, this is interesting. I've just received a letter from Ascot Lloyd re "Review of Historic ongoing service charges" and asking if I want to be included in their review. Yes I do.

Found this https://citywire.com/new-model-adviser/news/ascot-lloyd-sets-aside-17m-for-ongoing-advice-redress/a2474719

My DH who had much more investments with them has not had the letter. So, if you have been disappointed with them in particular, perhaps give them a call.

No harm getting another ifa to review your investments then see what they say. They could come up with new ideas or basically the same as you have now. You don't need to switch.

I had a review which spelt out how best to consolidate my fragmented pension pots and I more or less followed the advice myself. Their fees were shocking in comparison with others, otherwise I might have gone to then.

With Trump and world economic instability I'm very risk averse and I think I will be until he's out of office.

I'd also rather pay by the hour than a percentage of what they look after, which can be a rip off.

Ohhh, this is interesting.

We have money in a trust with Ascot Lloyd that for various reasons would be difficult to move, at least in its entirety, and yes, they are pretty crap. We haven’t received any letter about this.

We do however have a review meeting with them this morning (that we have had to chase for, despite it being in the T&Cs that we should have one annually) and so I will ask them about this, and hopefully watch them squirm.

I manage a 7 figure portfolio for our business, but I am too nervous to trust on a IFA to arrange our portfolio and I wouldn't trust an IFA to do an independent review of another IFA - there's a big incentive on them to want your business and they will always find something to improve upon.
Years ago (before the investment platforms) we used to use advisors and we had to challenge a few of their dodgy decisions - one startling example was when we wanted to invest £2000 in Ireland, they charged us £1200 for their advice because they didn't know anything about the Irish market so they expected us to bear the full cost of the research without informing us beforehand - they agreed that it was unreasonable but they continued to make 6% a year off our investment - those were the bad old days but I've been bitten and I don't trust them- it doesn't reduce work for me to use them - I'd be checking their homework all the time.

I think for the nervous (probably all private investors), passive investing using a global index fund is the best way to go, choose one with low fees from one of the big eft providers and leave it. It's much easier than you even imagine - the new platforms like Interactive Investor are very easy to use. A bit of work from you upfront to educate yourself and they you can leave it to look after itself.

I just received a cheque for circa £2k for not receiving appropriate advice from Ascot Lloyd.

Hi OP. A good IFA will live up to the old adage 2 ears, 1 mouth, and have you, and your goals front and central. They won't use it as an opportunity to boast about their expertise or how wealthy they and their clients are.

They will use this to formulate a plan and keep this under review. Cashflow planning will make up a big part of this, and should be revisited at least annually at your reviews.

Charges-wise, 0.5%-1% for ongoing advice is reasonably standard, but this will cover the ongoing review process and additional fees are only likely to be payable on a new piece of planning, rather than tweaks to the existing plan.

A good IFA will also be unafraid to tell you they can't help you and not take you on as a client. If fees will be uneconomical or unjustifiable etc.

People here seem to be obsessed by investment returns. While this is not to be ignored, you need to be careful comparing apples with pears and use appropriate risk benchmarks. An IFA will have some degree of investment expertise but they are not investment managers and in this day and age are unlikely to construct a portfolio, instead using model portfolio funds and discretionary investment management. Don't compare temporary success of DIY'ers with an investment selected based on your risk tolerance, capacity for loss, timescale and objectives.

Furthermore, missing out on tax allowances such as ISA allowances, pension contribution allowances, CGT annual exemptions, making use of spouses allowances etc. is a huge own goal.

Read reviews, get referrals from friends, stay away from big networks, especially SJP.

The FCA specifically say they are NOT negotiable!

Indexing is a very legitimate investment strategy but indexing is more than a single tracker. Advice isn’t about investing it’s about navigating your financial
landscape.

A good balanced review!

I run a 9 figure portfolio and we index.

Advice is not about investing.