How do you find an independent financial advisory?

[Mamma2828]

… beyond picking through a list of IFAs that are regulated?

This is not for me but for my family who have a large estate. They are inherently suspicious of paying for professional advice as they are terrified of being scammed out of their life savings.

My preference is to go with recommendations but I don’t really know anyone who uses them. With solicitors I was given a recommended list, checked Legal 500, the law firm website for specialist qualifications, LinkedIn, location of their law firms for so may family could meet them in person and spoke to them on the phone before I made a decision. So I’m hoping to do something similar with IFAs to reassure them but I don’t know where to start.

We went on Unbiased and interviewed a couple. Went with the one we trusted the most along with checking his qualifications /indemnities.

Meet many, find ones who are more a teacher than a seller. Pay for service, avoid ongoing fees unless wanting someone to manage it all.

Podcast about the financial advice process:
https://meaningfulmoney.tv/HB9

You could ask around but when we did that we realised that our friends are a bit clueless/uninterested in managing their money - hence why they employed an advisor - one set are paying a high percentage a year for advice, the other set had sought someone who suited the dh, who was incredibly risk averse - the advisor was a plodder.

We ended up doing a combo of self learning about investing and a tax advisor (my friend's bil who she didn't like but said he was very good at his job) we asked for a day rate rather than a percentage.

You don't have to give your advisor access to your funds, (but you'll have to do the transfers and the admin). If they are being paid as a percentage, I've always felt like this might affect the advice given, also you need to know a bit - to understand whether the advice given is "good".
I generally feel more comfortable with a day rate.
The solicitors might be able to recommend someone.

We avoided one that basically ignored us despite meeting twice for coffee - didn't think we had enough at the time and wasn't prepared to wait.

Now with someone who sees the long term partnership. Very open to casual emails, annual reviews. Manages a portion of our overall longterm finances. We keep some in reserve to manage ourselves, a good benchmark for evaluating their performance to be honest.

How does that work - do you chose investment to and then measure your outcomes against theirs? I’m not entirely convinced there’s method in that madness. I thought people chose advisors because they didn’t know what to do or couldn’t be bothered- do you think your advisor is exceptionally talented to beat a passive investing approach for example?

There are other reasons why people choose financial advisors to manage their portfolios, it isn't always because they don't know what to do or can't be bothered.

In our case, we have busy lives currently and it just isn't something we can keep an eye on consistently. So the bulk is managed, we keep our toes wet by doing a little bit on the side. So yes I can compare our relative performances and on that basis make a judgment call as to whether they are doing a good job and are worth the fee or not. e.g. they manage my SIPP, I still have a current employer pension - are they performing at a similar rate or do I need to adjust?

How often do you expect your FA to review your Sipp performance?

Continuously as we want them to outperform the market. If there are major market changes I expect them to address them with no further input required from me.

Individual review with us would be twice a year.

I think most people go with word of mouth. When I needed one, I asked around and chose the best option for me. Some were just not suitable.
I signed on with HFMC because they manage my PILs' funds well and have interational experience/knowledge. They know to make sure that my investments are compliant with UK and US tax law. Plus they know the wider family situation because they manage finances for several family members.

Do you feel comfortable sharing the percentage of your investment you pay to your FA on an annual basis?

Pretty certain it is under 1%. Are you in the market for one yourself?

We went with these guys

https://www.boosst.financial/individual.html

Fees were below market, no exit fees, and you could choose to pay for one off advice or to let them manage your portfolio.

No but your FA will have to chosen funds that consistently perform 1% more than passive funds to make them worthwhile that’s a tough ask. But it sounds like you have chosen something that suits you - maybe it doesn’t suit the Op and to understand whether your advice is going to suit the op, who doesn’t know what they need - we need to unpeel the layers.

Thank you all, it’s given me a bit to think about.

@Mamma2828 to come back to your original question - may be worth looking at the FT adviser top 100 but obviously it depends whether their methodology in making up the list matches your family's aims/priorities. Good luck

I don’t think IFAs can consistently perform above market. I think Warren Buffet is correct, just buy a tracker fund and wait! Best return lowest cost.

What an IFA can help with is how to make financial decisions that are efficient, e.g. pay off the mortgage or put more in pension now, etc. Their stock picks are likely only to track the market, but be less volatile. They can help organise taking lumps out of a DC pension, rather than buying an annuity. Etc.