Finding a good IFA

[Buckmoon]

I’m just about to inherit a large sum of money from my DM. I don’t know exactly how much, but probably about £2 million.

How do I find a decent IFA? DM had some investments with St James’s Place and she wasn’t very impressed with them, so I don’t want to use them for advice… but I don’t want to just google either.

Have a listen, or watch, of this episode from Meaningful Money about how to find and what to ask a financial adviser: meaningfulmoney.tv/2021/05/04/the-financial-advice-checklist/

There are some listings services which may help you narrow down. Look for a financial planner.
www.vouchedfor.co.uk
www.unbiased.co.uk

I used unbiased to find some companies. It's a personal thing but for me I didn't want a one man band as I was worried that I would just get one opinion. I also didn't want a massive company but one that had a few FA's and other financial services.

I then checked their credentials eg that they were registered.

I then had an appointment where we discussed my situation generally and what I wanted and what they could provide. I wasn't charged for the first couple of meetings as they said we both needed to make sure we were a good fit and they could provide what I was after.

Sorry for the loss of your DM

My partner is an IFA.
Definitely avoid places like St James Place. They aren’t truly independent- they only advise on their own investments and can’t cover whole of market opportunities. Their fees are also very high.

PP have good advice. You shouldn’t have to pay upfront and need to speak to an advisor to get a good feel for them. Definitely look for one that is independent and can access whole of market opportunities.
Also worth noting that there’ll be a small % ongoing fee - this covers the IFA to continue reviewing and looking after your portfolio. For a good IFA the fees will be more than covered by investment gain and ongoing review advice given but can be a surprise if you’ve not sought advice like this before.

My husband is a Chartered Financial Planner, look for one of those.
Like all the PPs, avoid SJP and look at vouchedfor and unbiased. Contact a few that sound good and see which one you prefer before making a decision.

Sorry about your Mum. ❤️

My mother had investments with an IFA for years, the adviser never called out to see them, and charged them 1% per year!
Her friend had used SJP, so she decided to go with them. I did some reading and wanted to make sure she wasn't ripped off.
He set up ISA's for them both, and charged 1% to set them up, I looked at the IFA paper work and he charged them 5% to set up a prudential investment.

SJP worked out cheper by the time you added in his 1% and the prudential investment.

The SJP adviser sees them annually without fail, and also helps with their self assessments.

I see they have bad press, however, the one my mum has really is good. I would no write them off, however, have a meeting with a few, ask for their charges in pounds shilling and pence, also ask what they can do for you in addition to just setting up the investment

I would have thought that, for that amount, it's probably worth seeing if you can pay a fixed fee, rather than a percentage.

After all, 1% of £2M is £20k, so you'd hope to pay a lot less than this, especially for the ongoing annual review.

SJP aren't independent though. There's a big difference.

@BarbaraofSeville - Agreed - Unless you have a massivley complex financial situation, I would struggle to see how one could justify £20k a year for a review.

I understood that @tattychicken - However, my parents IFA recommended nothing other than Prudential Bonds and ISA. I think lots of IFA's may be independent, however rely on a few providers?

I may be wrong

@fromdownwest It does sound like the IFA was pretty poor. That's why it's really important to speak to several before choosing one.

I'm sure the individual SJP chap was nice, but they are tied into products so not IFAs, despite what they say, and are not highly thought of in the business.

Agree with BarbaraofSeville, ensure you pay a fixed fee / rate per hour not a % - it will be much cheaper. 1% of £2m = £20k which is a lot .... and think how much you'll pay over 10, 20, 30 years - £200K, £400k, £600k. Also, most work for the IFA will probably be in the first year when they get to know you, your objectives, risk tolerance, etc. and set things up. After that, it's likely to be a periodic review and tweaking, and £20k a year for this would be an astronomical hourly rate.

Echo what others have said - you want an advisor who is independent, not tied to pushing certain products only.

Thanks all. Really helpful.

Definitely ask for local recommendations My husband is an IFA. Make sure they are an IFA and not one that's tied to a bank or estate agent etc.
If you want to send me an DM I can put you in touch

Would look for a Chartered Financial Planner Level 6. Get 3 different firms to pitch. You are a very valuable client

You want an independent advisor, not a company like SJP who sell only their own products

Issues to cover include tax, investment choice, risk, your age, dependents etc

Are you varying the will? This alone is a potentially massive issue

I would even consider paying a qualified accountant specialising in tax to review your choice as a one-off project

This is a VERY large sum

I second looking for a Chartered Financial Planner at a Chartered Firm.
St James Place are not independent.

Varying the will? I don’t know what that means I’m afraid.
I feel very unsure about it all.

Varying the will is a very common device and an important way of reducing Inheritance Tax IHT

For example - if you don’t need all the money and your own estate is likely to be subject to IHT, then if you have descendants, you could divert part of your inheritance to them now. Otherwise IHT is paid on your death too

But a forum like this is to point you in a sensible direction only because the issues are complex and significant

Understood. Thank you @AnotherOldGeezer.

@fromdownwest

My mother had investments with an IFA for years, the adviser never called out to see them, and charged them 1% per year! Her friend had used SJP, so she decided to go with them. I did some reading and wanted to make sure she wasn't ripped off. He set up ISA's for them both, and charged 1% to set them up, I looked at the IFA paper work and he charged them 5% to set up a prudential investment.

SJP worked out cheper by the time you added in his 1% and the prudential investment.

The SJP adviser sees them annually without fail, and also helps with their self assessments.

I see they have bad press, however, the one my mum has really is good. I would no write them off, however, have a meeting with a few, ask for their charges in pounds shilling and pence, also ask what they can do for you in addition to just setting up the investment

I'm sorry to say this is not quite the whole story

https://www.thisismoney.co.uk/money/investing/article-4724976/amp/St-James-s-Place-accused-muddling-costs-probe.html?ico=amparticleRelateddwithimages

The fees with an IFA are fixed and discussed at outset. If you are happy you pay the fees

Please ask locally for recommendations, try unbiased, meet a few and get their proposals and fees in writing. Make sure they are Independent and Chartered.

Good luck with your search