Should I get rid of my Financial Advisor?

[ConsiderTheOyster]

Inherited a sum 5 years ago while poor as a church mouse - no concept of what to do with it so plonked it in with the first FA I met that didn’t make my skin crawl.

Its split between 2 ISAs, 2 pensions and a GIA that is feeding the ISAs until it’s gone.
Emergency fund is in premium bonds and I kept a chunk in cash. This was April 2020 and terrifying.

As time went on I could see that the investments were doing rather well as I’d lucked out on timing. I put a toe in the water with Trading 212 and gradually got what I think is the hang of it. I was fiddling with pocket money numbers to start with but now all the cash has been split between Vanguard and Trading 212. The Vanguard account is 100% in the FTSE global all cap Acc. Trading 212 is in the S&P.

I don’t know if I’ve just learned enough to be dangerous. I could afford for all of what’s in my own sandpits to blow up so I’ve been too risky, I realise this, but I’d not do that with the lions share they currently charge me to do no work with. I’m fully comfortable with ups and downs now and know not to panic and withdraw when crap happens like Ukraine. I understand that a globally distributed fund is going to do better than trying to play the market and even if I just dumped it all in a 60:40 Vanguard Lifestrategy I think it would do better over time without the FA fees .

I’m 50 and not planning on retiring - once that gets closer I would want help to give me peace of mind that I’m not going to run out with my draw down rate but for the next 15 years I’m just doing accumulation- what help are they to me?

Apart from anything else I’ve been given a new guy to work with that’s not my cup of tea and speaks to me for an hour a year tops.

I’m aware I may be Dunning Kruggering my way into poverty…?

any advice?

how big are the fees your FA is charging? that is the key thing to look at. and what value do you get for your fees?

My FA does all the paperwork so I can do my taxes easily and I have an annual review meeting to discuss investment strategy and then he implements the trades and sorts out my pension etc. and it is definitely worth it just for the peace of mind of having it sorted.

@parietal hi - embarrassingly I don’t know the fees structure- I did as I was told when I first invested it but I can see many thousands of pounds in fees each year. I have my annual review soon and need to get him to break that down for me - on the statement there are lots of a bit here and a bit there and it’s bewildering. Whereas the two online platforms it’s clear as day and cheap as chips. 🤷‍♀️
I’m genuinely confused as to what he thinks the service he is offering to me is now. I understand my risk tolerance, I don’t need talking down when it dips and I’ve got a 15 year window - I don’t know if the wizard of oz is actually doing something behind the curtain or not and it’s really awkward when I’ve only spoken to him a couple of times to get him to justify his job!

I think it all depends on the amounts at issue and the level of the fees. I looked into getting an IFA a few years ago and had an initial meeting with one but didn't take it forward as I wasn't convinced what she was offering was good value for money for the sums I had to play with.

Well done for educating yourself. You need to get the fee structure from your FA and then compare with Vanguard / Trading 212 on this site: https://www.candidmoney.com/calculators/investment-charges-impact-calculator It's eye opening!

I also fully recommend the UKPersonalFinance sub on Reddit for advice and information if you decide you're ready to take more control - this certainly doesn't need to mean taking more risk.

FA is a non job as an independent person - always use the bank or a proper form of accountants

Accountants are not authorised to give financial advice. And why would you use a bank / they can only advise on their own products.

I'm an American HNWI. IMO it's best to pay your financial advisor a flat fee by the hour rather than a percentage of the money invested. It's much easier to control costs and it increases the likelihood that you're getting unbiased advice.

Oh yes, so much better to find an FA yourself than have the help of your accountant or the safety of a decent bank

You did not mention referrals, of course you don’t look for a financial adviser on Facebook TikTok etc!

What do you mean by safer banks? Last time I checked the compensation limit is the same for all authorised bodies and investments.

Honestly, if you have to think twice to get this and think I'm talking about amounts invested in individual banks not established banks then ...

Frankly, I have no idea what you are talking about but I was not at all talking about investing in actual banks. Any investments through a bank don’t usually invest in the bank itself but other regulated investments.

I’m the OP and this has got a bit weird. I’m not talking about banks or accountants. I’m looking at whether I should be paying an FA during the accumulation phase for the next 15 years when I’m fairly happy with a globally diversified fund all cap for 5 years and then move toward a lifestrategy product before re-employing financial advice when I want to actually start taking stuff out.

I wouldn't pay a financial adviser to tell me to take out a stock market tracker and stay there for years. Advise is generally more geared towards diversified portfolios, and potentially shares in individual companies, with an aim to beat the market.

I would suggest that the adviser should be letting you know the exact fee structure and what they are reviewing and recommending to earn this money.

Now that your funds have been set up and are progressing, does your FA actually do anything for you? I got zero feedback from mine (apart from a round robin when Russia invaded Ukraine). When I query this lack of attention to my investments,they said it was because my total investment was too small (about £150k) and that they only stayed in regular touch with people who held much greater holdings.
The only contact I got from them was the form of quarterly statements showing their commission. So I decided to rely on DH’s tutelage instead and transferred the holdings on to IWEB and put a massive amount into Vanguard.

You sound as though you know a lot more about investing than me OP so if this sounds similar to your FA, then I’m sure you can do without them.

Legally Fa have to disclose fees annually

https://v2.unbiased.co.uk/enquiry/match-intro/financial-adviser?gl=1%2a4bv6ft%2aagclaw%2aR0NMLjE3Mzc3NTUwODcuRUFJYUlRb2JDaE1JbXYtemthcVBpd01WWXBaUUJoMXZ4aU13RUFBWUFTQUFFZ0laRHZEX0J3RQ..%2aagclau%2aNzc3NDAwNTIwLjE3Mzc3NTUwODc.%2aaga%2aMTQ5ODYxNzc4OC4xNzM3NzU1MDg3%2agaaQ2N5W5958L%2aMTczNzc1NTA4Ni4xLjAuMTczNzc1NTA4Ni42MC4wLjA.

Most good Fa will report annually and call (even smaller clients to see how things are going)

What do you mean?

Accountants are not authorised to give financial advice.

A bank will only sell its own products.

A good IFA is worth their weight in gold.

Most don't charge an hourly fee. If they belong to a larger platform they will be charging a % of investment value for looking after a client.

I'd ask your IFA to send you a breakdown of all costs, per fund and per year. Then you can compare them with the cost of investing yourself.

You should have a good relationship with your IFA and be able to talk to them. It doesn't sound like this is the case?

But I'd have an honest chat about the value they provide. Good luck!

You sound like you've made up your mind really and are just looking for confirmation.

Personally I've DIY'd for the last 20-odd years in a mix of index trackers and am comfortable with that. Had good solid returns and paid low fees (currently a bit under 0.5% per year for platform and fund fees all added up). I use Fidelity who aren't the cheapest or the most expensive.

It depends on the person though. A family member inherited a chunk of money and we encouraged them to put it into a manager's hands because they would otherwise spend all their time worrying about it. Obviously the fees are higher but it meets their needs.

Sounds like you know what you’re doing. Bin off the FA because you’re paying him to do what you’re perfect able to do yourself.

This doesn’t make sense. A good IFA is well worth the money. I’m not going to ask my bank for advice on my pensions or where to invest my savings.

How much money are you talking about?

Under 250k definitely
Up to 500k most probably

Beyond that I'd want an IFA.
Mine is excellent if you want a referral and the fees are clear transparent and easy to understand and they help me access great products i would feel confident or know how to access on my own

Do you know how many exams an IFA has to sit and the regulations they have to abide by. It is most certainly not a non job....