Genuine independent financial advice

[levtweeney]

Originally Posted by tspill

This is my point. What exactly does it "work" as? That is the question I cant find a credible answer to that supports it as investment. It cant be as a currency - it has simply failed at this and is far too unstable to support this (IMO). It is very different from the $ and £ and other stable and country backed currencies.

So to me it is simply an "investment" with absolutely nothing to support it. It has even less than "gold". And that makes it a "speculation".

BTC is much more easily manipulated than most "normal" investments. Again, they cant really be compared.

Having read extensively on BTC in recent months, I have re-concluded my view on this. However, I have bought some for a bit of fun and if I am honest, FOMO (Fear of missing out). And I am doing well. But I have zero expectations on it. If it drops, I will buy a bit more.

The one thing it has done is drive some seriously good technologies. And to me this is where the value is - the companies behind some of this technology.

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Yep I’ve been looking at crypto currencies for years now and have avoided buying into them due mainly to advice I hear on the internet about how it is the Wild West of investment and it’s going to go boom eventually. And in all this time it has went up and up and up.

I have friends who hold Ether and have for years and they have seen their investment increase in value massively. I like the idea of Ethereum much more over Bitcoin, I like how it is being adopted by some of the biggest online players such as Amazon, Microsoft and even banks like JP Morgan are heavily involved.

I agree with others I too have a fear of missing out. This reminds me of property values in the early 80’s. If you bought early property prices went through the roof and people made fortunes. Crypto currencies feel like that to me.

I think I might just give it a punt

[ansi41]

How do IFA's get paid?
I think I would feel more comfortable paying for someone's time rather than if, for example, putting money into a certain investment, the IFA would get paid a percentage of the "deal" as such. So they could suggest I invest in something because they would get more money that way, rather than it being the best thing to do, if you see what I mean.
I think the former was what happened to my parents, as it was a really bad investment that lost them thousands (I realise no investment is risk free, but this was really bad advice).

[tspill]

Originally Posted by ansi41

How do IFA's get paid?
I think I would feel more comfortable paying for someone's time rather than if, for example, putting money into a certain investment, the IFA would get paid a percentage of the "deal" as such. So they could suggest I invest in something because they would get more money that way, rather than it being the best thing to do, if you see what I mean.
I think the former was what happened to my parents, as it was a really bad investment that lost them thousands (I realise no investment is risk free, but this was really bad advice).

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I believe that this commission based selling is a thing of that past. If so this is a very good thing. So I don't believe that IFAs get pay back from choosing different investments.
Maybe one of the IFAs on her can confirm this?

My understanding is that they only get paid by clients (you and me) and therefore they have no financial gain reason to choose one investment/supplier over another.

So hopefully what happened to your parents should not happen now.

PS. I want to say that I have nothing against IFAs at all. They can be very useful (and maybe even essential) for those that don't want to do this themselves. And I have even suggested that some go this route if they aren't sufficiently knowledgeable or confident in their own ability.
It is like anything - plumbing, joinery, car servicing etc.etc. You can pay a professional or you can learn to do it yourself.

[HFJohnson]

Originally Posted by tspill

I believe that this commission based selling is a thing of that past. If so this is a very good thing. So I don't believe that IFAs get pay back from choosing different investments.
Maybe one of the IFAs on her can confirm this?

My understanding is that they only get paid by clients (you and me) and therefore they have no financial gain reason to choose one investment/supplier over another.

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That's correct, being paid a commission to use a certain investment product was stopped a few years ago now. Instead we usually charge a percentage or fixed initial fee and then an ongoing fee based on a percentage of the fund each year. If an investment goes up in value we get more so its in our interests to choose the best.

[FlorayG]

Well this has just got me more confused
So there is no professional who can advise on all the different options?
I just want to know the costs and benefits of each
I don't want to be advised by someone who only knows about one option

[disney332]

Originally Posted by FlorayG

Well this has just got me more confused
So there is no professional who can advise on all the different options?
I just want to know the costs and benefits of each
I don't want to be advised by someone who only knows about one option

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Post 11

No IFA would talk about investments generically or not without going through a due process. Regulated investment or not.

If they did they risk being struck off the register.

Your best friend could be Mr Google

Disney332

[mitch84]

Originally Posted by FlorayG

Well this has just got me more confused
So there is no professional who can advise on all the different options?
I just want to know the costs and benefits of each
I don't want to be advised by someone who only knows about one option

See more...

You need to do your research and make a decision yourself.
IFA’s may charge you a fee to see you, but that’s not how they make their main living.
Research it and see what you feel comfortable with. It’s so personal

I’m an accountant, and very risk adverse with my own money. It’s either in property or in a savings account, end of. The only shares I have ever dappled in are companies i’ve worked for at the time, who have offered me then for a huge discount. No way in a million years would I buy Bitcoin, just way too rogue for me.
If I had £100k I’d have a buy to let property.

[YorkshireT]

I am sure there are some decent ones but one I know is rolling in cash and he does not do much work- clever of him, but someone is paying for it.
I had one advising me on my pension 18 years ago and it was OK but not great. Turns out he took a hefty commission which when he went out of business seems to have transferred to another business who my pension provider continued sharing data with. Got some compensation for that one, along with some charges refunded.
I had another few come to see me (I now turn them away) and one told me to put most of my cash into this fantastic guy called Woodford. I didn’t like what I was hearing.
I now invest my pension myself in one with multiple funds available and once a year study all the funds, performance, percentile benchmark etc and move the investments around a bit. It may be coincidental but since I took this approach I’ve done much better.

[tspill]

Originally Posted by mitch84

You need to do your research and make a decision yourself.
IFA’s may charge you a fee to see you, but that’s not how they make their main living.
Research it and see what you feel comfortable with. It’s so personal

I’m an accountant, and very risk adverse with my own money. It’s either in property or in a savings account, end of. The only shares I have ever dappled in are companies i’ve worked for at the time, who have offered me then for a huge discount. No way in a million years would I buy Bitcoin, just way too rogue for me.
If I had £100k I’d have a buy to let property.

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BTL would be considered high risk in investment terms. A single asset in a single asset class.
Add to this that the government is making it more and more difficult.
I am not saying it is bad - but it is far from low risk. Been there and done that and have the scars. Most that get into BTL never really consider the risk.

[tspill]

Originally Posted by FlorayG

Well this has just got me more confused
So there is no professional who can advise on all the different options?
I just want to know the costs and benefits of each
I don't want to be advised by someone who only knows about one option

See more...

Maybe start by explaining exactly what it is that you want to achieve with the money that you have? That is the starting point. Making any decision (either with or without an IFA) without fully understanding this will almost certainly result in a big mistake being made. This is the first question you need to answer clearly. If you don't know the answer to this, you aren't really ready to move forward.
Every investment you make needs to have a purpose.

Some examples
1. I need £x to buy a house in y years.
2. I need the investment to return £5000/year from age 60 and keep up with inflation from that point until age 67 when the state pension kicks in.
3. I am 20 years old with 45 years before I need the money, so I want the highest growth possible and am happy with the high risk involved. But am OK as in 45 years it will all be OK.
4. I have £1000 and want a bit of fun - invest in Bitcoin.
5. I have £5000 and fancy a week in Vegas learning to play the tables.

Everyone will have different objectives. You need to define yours. When you know this, then the next step is to look at options as to how achievable/realistic this is. And if it is, then what investment strategy might achieve this and what risk there is and what would you do should things not pan out as expected.

So I think you need to take a big step bach and define what you want to achieve.

You talk about options. But options to do what? That's where to start. Once understood, options can be considered. The other thing you need to understand is your tolerance to risk. How would you feel if your investments dropped 50% the week after you invested? Many, many people are invested way beyond their tolerance for risk. Things go bad and they sell as they get scared. That is the worst possible thing they can do, but they emotion takes over and they make vary bad decisions. This happens the time.

I will give you the basics of mine. I use a "bucket" approach.
My wife and I are retired (early at 53 and 54).
1. I needed to cover 2 years with zero income. Solution I had 2 years expenditure in easy access savings. Inflation risk is OK as short term and inflation is low.
2. My DB pension kicks in at 55. OH's DB pension will be at 60. I need cash to top up my pension to meet expected expenditure for 5 years. Solution - I have 5 years cash top up in savings. Inflation will hit this, but I accept that risk.
3. 60 to 67 - Need top up money until state pension kicks in. Solution - I have reasonably low risk investments - I use Vanguard Lifestrategy 40 for this pot.
4. Beyond 67 - DB and SPs will cover our main expenditure. Solution is I have a set of higher risk investments that I know I can cope with.

My strategy is to always have 5 years need in cash so will sell investments each year to top this up. If investments have failed to grow by inflation I won't sell and sell double the next year. I can do this for 5 years without being forced to sell and hence massively reduce the risk of having to sell at a loss.

I will review and adjust each year. Things go well and maybe I can spend more (another holiday). Or things don't and we need to tighten out belt for a bit.

I have a lot more detail behind this, but this is my strategy and what I am doing to meet this plan.

I have completely redone this strategy as we both retired a bit earlier than expected. And we are now in a decumulation phase where as previously we were in accumulation. I didn't start to change my investments at all until I had completely locked this strategy and plan down. I have now started moving my investments and savings around to meet this plan. This process will take a year to complete.

Every one of my investments and deposits has a defined and clear purpose. I know what I need each to do to achieve what I require. And I can therefore measure each against this and adjust as needed if they do worse/better than expected (or than I need). And I fully understand the risk profile of each.
This allow me sleep at night.

I considered other strategies, but these weren't for me. For example, a non-bucket strategy where you say invest in equities and bonds with a particular split (e.g. 60:40). And you sell from the side that has increased the most to get the cash you need. Or invest 100% in equities and accept the risk. And that you sell when you need - even if prices drop, the theory being that the majority remains invested in the long term and the growth will more than cover short term losses from selling low.

But the first things any advisor is going to ask you first are -
1. What are your objectives
2. What is your tolerance to risk.