How to find a 'Good' IFA

[Faratid]

A 'good' IFA is a contradiction in terms.
Even a free IFA will be looking to sell you a product that will cost you money.
You have, will have very little money to live on, so don't spend it financial advisers, then you'll have more.
Investments, savings etc., are a total fantasy for anyone on a low income, and will make no difference.
Do you own a house?
The only thing you should be investigating, at no cost, is how to reduce expenditure such as utility bills, rent/mortgage, credit cards/loans. And make sure you're getting all the benefits you're entitled to. I recommend a chat with Citizens Advice.

 

[yello]

Make sure your 'stamp' is fully paid up!

I was self-employed for years so I used to make sure I was paid up. Believe or not, I actually used to enjoy it - call it anal retentiveness. I have a memory of going into the post office to do it but I might be getting confused with the TV licence! Either way, there was something satisfying about it. It took me back to my childhood days and the savings account passbook that I used when I paid in my paper round money! There was something very reassuring about seeing the stamps on the card.

 

[yello]

A 'good' IFA is a contradiction in terms. Even a free IFA will be looking to sell you a product that will cost you money.

Harsh... but I am, as a general principle, inclined to agree.

I'm sure there are good ones out there (or at least, some better than others, and can be trusted) I guess you have to appreciate that they are obviously in the game to make a living for themselves, and take that into account. You are their income - but if their advice can make your situation better somehow then that might be a cost you're prepared to pay. It might not be simply about earning you something, or reducing costs, it'd could be a restructuring that's to your advantage.

But yes, if you've got sod all then there's obviously less for them to work with. And more chance that you'll walk out with lighter pockets.

That's what kind of bugs me about the general 'get financial advice' advice that's so often splashed about. It's glib and easy to say but isn't necessarily applicable. Cynically, I might say that it serves the industry more than the individual.

 

[PaulB]

A 'good' IFA is a contradiction in terms.
Even a free IFA will be looking to sell you a product that will cost you money.
You have, will have very little money to live on, so don't spend it financial advisers, then you'll have more.
Investments, savings etc., are a total fantasy for anyone on a low income, and will make no difference.
Do you own a house?
The only thing you should be investigating, at no cost, is how to reduce expenditure such as utility bills, rent/mortgage, credit cards/loans. And make sure you're getting all the benefits you're entitled to. I recommend a chat with Citizens Advice.

Offering advice, from that perspective, is a very big contradiction in terms.

You take advice from possibly the two most trusted names in financial matters to the general public - Martin Lewis or Paul Lewis - and what's the priority they'll strongly advise in a situation like this? Get yourself an IFA! I've found in my own way that my only mistake in being sceptical about IFAs was that I didn't get one ten years sooner. I can't advise this strongly enough to my younger colleagues and was even given a slot to talk about this very subject at one of our team meetings. To their financial cost, not one of them followed my strong advice. More fool them.

 

[ebikeerwidnes]

WHen my Dad died I ended up with some money - but no real idea how to invest it
I knew he had used an IFA but they were miles away from where I lived so I just looked on the WWW for someone local

Seems like I got a bit lucky and found one that keeps things reasonably simple.
However, my wife is looking toinvest the money from her Mum's will now - and she is very confused. It is weird to me how some people can have very responsible jobs dealing with complicated subject (like my wife) but when it comes to their own money they can't function at the same level.

I have even seen intelligent people with degrees and all sorts - but when it comes to money they can;t cope with 2+2!
When I worked in a big business I saw project leaders running major large projects - but couldn;t cope with the team's travel expenses because it was real money - when the computer equipment they wanted costloads more which was OK because I dealt with all that!

 

[Gunk]

The St James’s Place network of IFA’s is pretty good, most are very experienced and work off recommendations.

 

[yello]

It is weird to me how some people can have very responsible jobs dealing with complicated subject (like my wife) but when it comes to their own money they can't function at the same level.

I am one such person.

In my defence, I say that I just don't see the world in that way (if that makes sense) Simple banking and saving, yes, I can get my head around but the more complicated stuff.... I just don't speak that language. Even the technicalities of my own state pension bamboozle me. I just know what I've qualified for and am entitled to (at least, I think I get that) The whys and wherefores of it leave me cold.

The common language and jargon of IFAs, and financiers generally, is simply a foreign language to me. I have zero natural aptitude (nor interest tbh) for understanding it.

Yes, maybe I could be 'better off' by seeking financial advice but I figure I'm not so badly off now. And besides, I just don't/can't play that game. Even if it is to my detriment in the judgement of some people. I can live with that.

 

[mikeIow]

The St James’s Place network of IFA’s is pretty good, most are very experienced and work off recommendations.

Just came across this thread.
SJP are one of the most lambasted of all financial advisors. My very strong advice would be to avoid them at all costs (the costs would all be yours 😉)

You say their “network of IFA’s is pretty good”.
Not sure if you use them, but if you do, and they have given you the impression their are IFAs, then I’m sorry to say you’ve been duped.
They are most certainly NOT IFAs: they only sell their own products, at cost, & regularly come very low on any comparisons 🤦‍♂️
The I in IFA stands for Independent: the only choices for getting advice should be IFA or DIY 😉

You are locked in with a “rolling 6 year” period - ie, if you paid a premium to them last month, it will still cost you a chunk of money to transfer out within the next 6 years.
Countless threads on MSE and other forums about this: example here on MSE (others available, just search there), or here on Pistonheads.

Yes, you may get a very personable ‘advisor’ who buys you a lovely lunch once a year, but make no mistake, they are amongst the worst of advisors. I have a pal who uses one, and refused to contemplate that he might have fallen under their spell: he likes that cosy lunch (pre Covid), & continues to bury his head in the financial sand: after a couple of ‘interesting’ conversations, I avoid the topic now: it’s his money to throw away 🤷‍♂️
If SJP talk about wealth management, it is not your wealth they are focussed on 😜
The Sunday Times have been on their case for some time, exposing their tricks and shenanigans: thread here to read more (paywall, but you get the gist).

If you are too disinterested in your own finances to ‘take control’, & I do get that some people aren’t, then either find an Independent Financial Advisor, or a friend who is clearly good with their money to give you pointers (often tricky: Brits hate talking about our money!).

 

[simongt]

And of course, it's 'financial ADVICE'; if an IFA's advice goes base over apex, you're the only one who will lose, not them. With the current investment and interest rates being what they are, unless you are one of the lucky few with a shedload of cash invested, you will be taking a risk with your future whatever decision you make. I'm looking into what to do with two frozen company pensions right now; annuitie/s or drawdown pension are being suggested by two different IFA's who will only charge as and when I decide to give them the pleasure of playing about with my hard earned cash. My most important criteria is that the GLW, being 12 years younger that me, is provided for when I pop my clogs, something that my father and his father failed to do for their widows.

 

[PaulSB]

And of course, it's 'financial ADVICE'; if an IFA's advice goes base over apex, you're the only one who will lose, not them. With the current investment and interest rates being what they are, unless you are one of the lucky few with a shedload of cash invested, you will be taking a risk with your future whatever decision you make. I'm looking into what to do with two frozen company pensions right now; annuitie/s or drawdown pension are being suggested by two different IFA's who will only charge as and when I decide to give them the pleasure of playing about with my hard earned cash. My most important criteria is that the GLW, being 12 years younger that me, is provided for when I pop my clogs, something that my father and his father failed to do for their widows.

Which is precisely why one needs a good IFA who will give sound advice which can and often does protect the client. I've been with the same IFA for nearly 20 years. In that time we've become good friends and I would always trust her judgement on both financial and other matters. She has certainly helped us achieve a decent retirement and I'm far from wealthy. For example the funds we are in have actually grown during the last few months turbulence.

My advice would be drawdown for maximum flexibility. Once you have an annuity you're stuck with it.

 

[stephec]

Which is precisely why one needs a good IFA who will give sound advice which can and often does protect the client. I've been with the same IFA for nearly 20 years. In that time we've become good friends and I would always trust her judgement on both financial and other matters. She has certainly helped us achieve a decent retirement and I'm far from wealthy. For example the funds we are in have actually grown during the last few months turbulence.

My advice would be drawdown for maximum flexibility. Once you have an annuity you're stuck with it.

If you don't mind me asking would you be willing to let me know who she is please as you're not too far up the road from me?

 

[CharlesF]

Which is precisely why one needs a good IFA who will give sound advice which can and often does protect the client. I've been with the same IFA for nearly 20 years. In that time we've become good friends and I would always trust her judgement on both financial and other matters. She has certainly helped us achieve a decent retirement and I'm far from wealthy. For example the funds we are in have actually grown during the last few months turbulence.

My advice would be drawdown for maximum flexibility. Once you have an annuity you're stuck with it.

Please can you give some ideas on how to discover a "Good IFA". What questions to ask, what to look for, what to avoid. That will be a big help as I'm embarking on finding myself an IFA.

 

[alicat]

^^^^ Try the question 'how can you guarantee that the funds you advise me to invest in will deliver a better return after deduction of your fees than if I invest directly in a low-cost mutual fund like Vantage LifeStrategy?'

EDIT - it's Vanguard LifeStrategy. Thanks to @IaninSheffield for pointing that out.

 

[mikeIow]

Offering advice, from that perspective, is a very big contradiction in terms.

You take advice from possibly the two most trusted names in financial matters to the general public - Martin Lewis or Paul Lewis - and what's the priority they'll strongly advise in a situation like this? Get yourself an IFA! I've found in my own way that my only mistake in being sceptical about IFAs was that I didn't get one ten years sooner. I can't advise this strongly enough to my younger colleagues and was even given a slot to talk about this very subject at one of our team meetings. To their financial cost, not one of them followed my strong advice. More fool them.

Note that those smart gentlemen will also caution strongly against non-Independant FAs.
Earlier in the thread someone suggested SJP (St James Place) were IFAs - they very much are not (as I said before), and only today Paul Lewis sent this tweet, essentially a horror story with SJP at the heart 😱

It reads like you feel getting an IFA is the only option. It isn’t.

Decent IFAs are hard to find…..but people do need to invest, & starting with their work pension scheme plus perhaps ISA &/or LISA (depending where they are in life) doesn’t need an IFA. Spending a little time understanding finances is time well spent. Most people have financial situations that are not complicated enough to require an IFA, I would suggest.
Vanguard LifeStrategy for the ISA piece is an example of an investment that is low cost and simple to understand. Pick a risk level, but beware being too cautious: young people investing for longer term should really go more equity (LS80 or 100 level of thing).
Other low cost world trackers are also good.

 

[Once a Wheeler]

I found these people helpful. An initial meeting cost me nothing and I did not feel pressured into anything. That was ten years ago and in the end I decided to do my own thing but it was a useful step in sorting out my arrangements.

Keep that holiday money and any unused cash in Premium Bonds. With less than £10k you will probably not win anything; but on the other hand you could win a million, so worth the effort as running an online Premium Bond account is really easy and you cannot lose your cash apart from a miniscule amount of theoretical interest.

Do not forget your innate talents: is there a book you want to write? is there a song you want to sing? do you find cooking fun and like making up recipes? Do people turn to you for advice on any particular thing? If so, there may be some money-making activity in that area. Above all, keep doing things that keep the flame of hope alight — that is what powers a life at any age.

Added afterthought: Could you continue to work for a few years? If so, you can defer your state pension and it will increase by about 5% for every year you defer. So if you deferred till age 70, you would receive 125% of your basic state pension entitlement and subsequent annual increases would be calculated from that higher base, so it is a very good deal if you can work a few years extra. Click here for the basics on deferral.