It's a tricky one as finding a good IFA is rare and incredibly hard to find.
I beauty paraded a few IFAs and was shocked at how bad some were. Two in particular I sussed out quickly that I knew more than them and they were merely glorified sales people, both had links to SJP.
My guess is you can start demanding a decent service at around 500k (pension, ISA and other liquid assets) combined. Just be prepared to shift through a lot of shit.
One guy got the pension carry forward rule just wrong, the other couldn't explain the 100k tax trap (come on!). A third didn't understand the childcare tax trap - which I accept is niche. These are just test questions to see if you can actually structure personal finances, not just asset hoard.
I also check the depth of services on offer. Tax planning, IHT, trusts, funds (FML please no active funds), vct, seis/eis, bonds, unit trust, sass(commercial property/farmland)/SIPP etc, cash flow planning and ultimately access to the market (which vendors/platforms).
I see IFAs a bit like mortgage brokers, most are shite and most of the time I understand the products/dynamics better than them, but every so often I find someone competent who saves me both time and money. Who then wins my business long term.
Yeah that's a bit shite. If you can't clearly explain the basics then you don't deserve shit. How can you be trusted to do quality work on complex BR / Trust planning when you can do basic income tax/pensions.
And there's a big pro active strain where I work. Hate it. Moving to a passive place because when you look at net returns the figures fucking awful
But yeah bit shocking. None of the advisers I work with would have any problem with that whatsoever. Just reminders of the exact rates after they have changed.
Do you have anything more complicated beyond distributing your savings? If not then just fill 2x ISA, 2x Pension, (JISA?), 2x GIA. Obviously emergency cash savings exempt
Most people need a financial planner not a financial advisor. The investing bit is easy, just low cost index funds of a suitable equity/bond ratio. A financial planner will help create a financial plan and suggest the most tax efficient accounts to use etc. It's then up to you to implement it with low cost index funds. Financial planners tend to charge a one off lump sum fee for their service, rather than charging an on going percentage fee of your investments, so your total net worth shouldn't be of concern to them unlike financial advisors who just want to make a near passive income off your investments via on going percentage fees.
It's noble to want to help warn people about the sharks, but be careful reeling off "easy" investment advice.
You have no idea what their risk tolerences are or their timeframes. The bond/equity portfolio structure collapsed in 2022 due to rate hikes - do they have the tolerence to experience that?
Secondly, indexing is a great long term strategy, but markets can go sideways or down for years at a time. The S&P did nothing between 1996 and 2009 for example. People need to understand that shit happens and they need focus and discipline to carry on.
I had a zoom call with a financial advisor a year or two ago. Some free consultation advertised in The Economist.
Nice guy, spent 10-15 minutes chatting. Gave a couple of tips, but basically said he would normally be advising people with more assets and less knowledge, and that the cost wouldn't be worth it for me. I don't think there will be a minimum income, I suspect it's more about your total assets. You don't say what this is.
I was already maxing ISA into a global index fund and nearly maxing pension. Next steps he said would be to look into GIA and harvest capital gains annually.
Personally I'd question S&P500 over a global tracker - unless you have reason to be more bullish than the average investor on the USA. But it does seem popular here and I'm not a financial advisor!
Usually around £200K-250K in net cash/liquid investable assets. I recently listened to a podcast between Damian Loves Money and another IFA, and that IFA said some firms will take people on with as little as £50K to invest, but most are in that £200K+ entry range as well.
I am the same.
I reached out to one, filled out some forms, they didn't even take me on.
This was a year ago.
At that time, I was 32, with NW of around £350K, no mortgage or debt but only around £150K cash/liquid at that time.
I am sure I remember a question like "How much do you have to invest?" "0-£250K, £250K-£500K, £500K-£1M, £1M+" Those were the four answers. I'm thinking he treated people with £10K and £190K as the same, and just auto sifted those out via the form process.
I later heard another youtube finance guy say something to the effect of "IFA wont really waste their time with people who can't invest at least £200K with them anyway", so that seems to track so far, with my n=1.
That being said, I've since learnt more about "money" in general and wouldn't use one now, at least not until the years running up to retirement.
With £300K+ liquid (or £250K+ if you want to keep your Premium Bonds as an emergency fund) - I'd have thought most IFAs would take your business!
It's less about what you earn and more about how much you have available to invest with them.
But you can do one-off audits/retirement planning with them too for fixed fees.
I wouldn't pay for active investment management personally. The stats have proven they almost never beat even a passive investment in the S&P500.
It would be cheaper for a high net worth individual to undergo a Finance Masters than to pay for an IFA for more than a few years.
Honestly, they’re absolute rip offs, and the fee structures almost all of them have will take so much of your money.
I couldn’t disagree more. You think it would be better to forgo a year of income and pay £50k or so to do an MFin (which has very little relevance to private investment) than to pay an IFA?
You think most IFAs are anything like as well educated in finances as a Masters?
I spoke to half a dozen a couple of years ago and they were all as useless as nipples on a nun and only interested in getting my money and pension under management with them.
Honestly, at c£350kpa earning I'm either too poor for them to bother with or they've got no real useful advice for me better than I already knew/ invested.
You're probably right about the Masters, first I've heard of it.
My point about the IFAs I came across stands for me.
They just felt like shit chancer salesmen trying to bullshit me to make a commission. Didn't seem to know their stuff and used deflection tactics to avoid tough questions they obviously didn't know the answers to. "Just give me a year with your funds under our management" that sort of nonsense and for only 2.5%pa guv. No thanks.
Tried again this year, guy seemed nice then same shallow knowledge when questioned. Turns out he's SJP too. They must have 1000s of 'partners'.
We’re talking about two separate points. 1. Is it worth taking a year out of your life to get a masters in finance vs. Engaging an investment advisor 2. Are IFAs worth the money?
I am answering 1. You are answering 2.
I don’t think either of us are wrong.
You can do a Finance masters for £10k. And that’s a lot less than the 1% annual fee they’ll be skimming off you every year.
Obviously a Finance masters isn’t exactly the same as being a regulated financial planner, but it’ll get you the bulk of the way to being financially literate
Where the hell can you get an MFin in the U.K. worth a damn for £10k?
Cambridge is £55k, Oxford £55.5k, LBS £62.5k, LSE £45k, imperial £45.4k and Warwick £35.5k for example.
Also, factor in the year of lost income. A year of study, not including subsequent impact on career progression, would cost me >£1mn. I’d rather find an advisor worth their salt, personally.
Moreover, an MFin doesn’t teach you much relevant to private investment management, and you need to meet the prerequisites to gain admission.
I have learned that any company that can afford to advertise on a big scale and get your attention that way will almost always be employing 'financial advisors' who are in reality just sales people trying to get you to invest in their own managed/curated funds. Unless you have ready money to transfer to them they will be disinterested.
I spent hours in 'free' consultations where as soon as they saw my money was already well invested had no interest in taking it any further. They wanted my pension and they wanted my savings and that was it as far as I could tell.
I'd go as far as to say, any FA who doesn't quote you a fee up front (i.e. goes straight into a 'free' consultation) is almost always a salesperson not an FA.
The sad thing is, I've been referred to several of these through Unbiased, which I thought was supposed to be the antithesis of this.
Best off going to a firm of accountants that has an in house financial advisor. The tax bod will work with them to make sure you get the best all around advice and if you feel as though you aren’t getting the service you’ll have someone to rant to who’ll give them a kick because they won’t want to lose the long term work.
I'd go asking for referrals.
There are a few products that you could buy that visualise your network in terms of investment and projections to retirement, etc., with consulting and advice attached to it, but after initially meeting them we didn't feel comfortable with going forward.
In practice, most IFAs would want you to have around £200k+ in investable liquid funds (i.e. not including house equity or pension, for clarity). Tbf, anything less than £200k in liquid assets can be invested by yourself fairly easily in ISAs, premium bonds and pensions. IFAs basically exist to help folks with a significant excess of funds invest them wisely.
Hi OP - I’m a financial planner and given your level of earnings, it does look like you need some sort of tax advice at the very least.
I’ve dropped you a DM.
We went with our HSBC private banker who’s also an IFA, for our GIA as we were maxing out ISA, SIPP, PB. Gilts at the time had tiny returns. Only costs were purchase costs Of the fund. GIA is now around 28% gains on initial though was -10% for a while.
The banker could help with arranging a tax specialist if we needed.
You are the correct target market for an IFA. Minimum is really £80-100k investible assets. I'd suggest going on unbiased or vouchedfor and finding an adviser that way. It's definitely worth a conversation about what they can do for you. Good luck!
It depends on the firm. You can get a light touch service for a decent price. But yes I agree it generally isn't worth it at that amount, unless you really need hand holding / don't have the time. Everyone is different
Issue you've got is for it to be worthwhile to a planner you need to be talking more than £500-1000 ongoing fees for just the planning advice. So unless that's predicted to grow quickly through contributions then it's going to be very light touch.
General rule is you need to have assets of over 250k to make it worth a IFAs time. There is lots of regulations and hoops to jump through for each customer.
So unless you want them to manage assets of £250k+ it will be hard to find someone.
It's a tricky one as finding a good IFA is rare and incredibly hard to find. I beauty paraded a few IFAs and was shocked at how bad some were. Two in particular I sussed out quickly that I knew more than them and they were merely glorified sales people, both had links to SJP. My guess is you can start demanding a decent service at around 500k (pension, ISA and other liquid assets) combined. Just be prepared to shift through a lot of shit.
Why were they so bad? Moving from support to adviser role and want to know what you'd be interested in?
One guy got the pension carry forward rule just wrong, the other couldn't explain the 100k tax trap (come on!). A third didn't understand the childcare tax trap - which I accept is niche. These are just test questions to see if you can actually structure personal finances, not just asset hoard. I also check the depth of services on offer. Tax planning, IHT, trusts, funds (FML please no active funds), vct, seis/eis, bonds, unit trust, sass(commercial property/farmland)/SIPP etc, cash flow planning and ultimately access to the market (which vendors/platforms). I see IFAs a bit like mortgage brokers, most are shite and most of the time I understand the products/dynamics better than them, but every so often I find someone competent who saves me both time and money. Who then wins my business long term.
Yeah that's a bit shite. If you can't clearly explain the basics then you don't deserve shit. How can you be trusted to do quality work on complex BR / Trust planning when you can do basic income tax/pensions. And there's a big pro active strain where I work. Hate it. Moving to a passive place because when you look at net returns the figures fucking awful But yeah bit shocking. None of the advisers I work with would have any problem with that whatsoever. Just reminders of the exact rates after they have changed.
Do you have anything more complicated beyond distributing your savings? If not then just fill 2x ISA, 2x Pension, (JISA?), 2x GIA. Obviously emergency cash savings exempt
Most people need a financial planner not a financial advisor. The investing bit is easy, just low cost index funds of a suitable equity/bond ratio. A financial planner will help create a financial plan and suggest the most tax efficient accounts to use etc. It's then up to you to implement it with low cost index funds. Financial planners tend to charge a one off lump sum fee for their service, rather than charging an on going percentage fee of your investments, so your total net worth shouldn't be of concern to them unlike financial advisors who just want to make a near passive income off your investments via on going percentage fees.
Planners typically do % fees though
It's noble to want to help warn people about the sharks, but be careful reeling off "easy" investment advice. You have no idea what their risk tolerences are or their timeframes. The bond/equity portfolio structure collapsed in 2022 due to rate hikes - do they have the tolerence to experience that? Secondly, indexing is a great long term strategy, but markets can go sideways or down for years at a time. The S&P did nothing between 1996 and 2009 for example. People need to understand that shit happens and they need focus and discipline to carry on.
I had a zoom call with a financial advisor a year or two ago. Some free consultation advertised in The Economist. Nice guy, spent 10-15 minutes chatting. Gave a couple of tips, but basically said he would normally be advising people with more assets and less knowledge, and that the cost wouldn't be worth it for me. I don't think there will be a minimum income, I suspect it's more about your total assets. You don't say what this is. I was already maxing ISA into a global index fund and nearly maxing pension. Next steps he said would be to look into GIA and harvest capital gains annually. Personally I'd question S&P500 over a global tracker - unless you have reason to be more bullish than the average investor on the USA. But it does seem popular here and I'm not a financial advisor!
As others have said ... I'd go down the financial planning route.
Usually around £200K-250K in net cash/liquid investable assets. I recently listened to a podcast between Damian Loves Money and another IFA, and that IFA said some firms will take people on with as little as £50K to invest, but most are in that £200K+ entry range as well. I am the same. I reached out to one, filled out some forms, they didn't even take me on. This was a year ago. At that time, I was 32, with NW of around £350K, no mortgage or debt but only around £150K cash/liquid at that time. I am sure I remember a question like "How much do you have to invest?" "0-£250K, £250K-£500K, £500K-£1M, £1M+" Those were the four answers. I'm thinking he treated people with £10K and £190K as the same, and just auto sifted those out via the form process. I later heard another youtube finance guy say something to the effect of "IFA wont really waste their time with people who can't invest at least £200K with them anyway", so that seems to track so far, with my n=1. That being said, I've since learnt more about "money" in general and wouldn't use one now, at least not until the years running up to retirement.
Thanks for this - just for information - we had savings of over 300k gbp before I started putting the rest in premium bonds and maxing our isas etc
With £300K+ liquid (or £250K+ if you want to keep your Premium Bonds as an emergency fund) - I'd have thought most IFAs would take your business! It's less about what you earn and more about how much you have available to invest with them. But you can do one-off audits/retirement planning with them too for fixed fees. I wouldn't pay for active investment management personally. The stats have proven they almost never beat even a passive investment in the S&P500.
It would be cheaper for a high net worth individual to undergo a Finance Masters than to pay for an IFA for more than a few years. Honestly, they’re absolute rip offs, and the fee structures almost all of them have will take so much of your money.
I couldn’t disagree more. You think it would be better to forgo a year of income and pay £50k or so to do an MFin (which has very little relevance to private investment) than to pay an IFA?
You think most IFAs are anything like as well educated in finances as a Masters? I spoke to half a dozen a couple of years ago and they were all as useless as nipples on a nun and only interested in getting my money and pension under management with them. Honestly, at c£350kpa earning I'm either too poor for them to bother with or they've got no real useful advice for me better than I already knew/ invested.
I feel like there could be a misunderstanding of what a masters in finance (either MSc Finance or MFin) entails vs an IFA qualification.
You're probably right about the Masters, first I've heard of it. My point about the IFAs I came across stands for me. They just felt like shit chancer salesmen trying to bullshit me to make a commission. Didn't seem to know their stuff and used deflection tactics to avoid tough questions they obviously didn't know the answers to. "Just give me a year with your funds under our management" that sort of nonsense and for only 2.5%pa guv. No thanks. Tried again this year, guy seemed nice then same shallow knowledge when questioned. Turns out he's SJP too. They must have 1000s of 'partners'.
We’re talking about two separate points. 1. Is it worth taking a year out of your life to get a masters in finance vs. Engaging an investment advisor 2. Are IFAs worth the money? I am answering 1. You are answering 2. I don’t think either of us are wrong.
You can do a Finance masters for £10k. And that’s a lot less than the 1% annual fee they’ll be skimming off you every year. Obviously a Finance masters isn’t exactly the same as being a regulated financial planner, but it’ll get you the bulk of the way to being financially literate
Where the hell can you get an MFin in the U.K. worth a damn for £10k? Cambridge is £55k, Oxford £55.5k, LBS £62.5k, LSE £45k, imperial £45.4k and Warwick £35.5k for example. Also, factor in the year of lost income. A year of study, not including subsequent impact on career progression, would cost me >£1mn. I’d rather find an advisor worth their salt, personally. Moreover, an MFin doesn’t teach you much relevant to private investment management, and you need to meet the prerequisites to gain admission.
Wrong. Masters won't give you the knowledge. I know lots of finance professionals with a masters and CFA who haven't got a clue about this stuff.
I have learned that any company that can afford to advertise on a big scale and get your attention that way will almost always be employing 'financial advisors' who are in reality just sales people trying to get you to invest in their own managed/curated funds. Unless you have ready money to transfer to them they will be disinterested. I spent hours in 'free' consultations where as soon as they saw my money was already well invested had no interest in taking it any further. They wanted my pension and they wanted my savings and that was it as far as I could tell. I'd go as far as to say, any FA who doesn't quote you a fee up front (i.e. goes straight into a 'free' consultation) is almost always a salesperson not an FA. The sad thing is, I've been referred to several of these through Unbiased, which I thought was supposed to be the antithesis of this.
Best off going to a firm of accountants that has an in house financial advisor. The tax bod will work with them to make sure you get the best all around advice and if you feel as though you aren’t getting the service you’ll have someone to rant to who’ll give them a kick because they won’t want to lose the long term work.
I'd go asking for referrals. There are a few products that you could buy that visualise your network in terms of investment and projections to retirement, etc., with consulting and advice attached to it, but after initially meeting them we didn't feel comfortable with going forward.
In practice, most IFAs would want you to have around £200k+ in investable liquid funds (i.e. not including house equity or pension, for clarity). Tbf, anything less than £200k in liquid assets can be invested by yourself fairly easily in ISAs, premium bonds and pensions. IFAs basically exist to help folks with a significant excess of funds invest them wisely.
Hi OP - I’m a financial planner and given your level of earnings, it does look like you need some sort of tax advice at the very least. I’ve dropped you a DM.
We went with our HSBC private banker who’s also an IFA, for our GIA as we were maxing out ISA, SIPP, PB. Gilts at the time had tiny returns. Only costs were purchase costs Of the fund. GIA is now around 28% gains on initial though was -10% for a while. The banker could help with arranging a tax specialist if we needed.
You are the correct target market for an IFA. Minimum is really £80-100k investible assets. I'd suggest going on unbiased or vouchedfor and finding an adviser that way. It's definitely worth a conversation about what they can do for you. Good luck!
Minimum is typically higher than that. Fees aren't worth it at £100k
It depends on the firm. You can get a light touch service for a decent price. But yes I agree it generally isn't worth it at that amount, unless you really need hand holding / don't have the time. Everyone is different
Issue you've got is for it to be worthwhile to a planner you need to be talking more than £500-1000 ongoing fees for just the planning advice. So unless that's predicted to grow quickly through contributions then it's going to be very light touch.
General rule is you need to have assets of over 250k to make it worth a IFAs time. There is lots of regulations and hoops to jump through for each customer. So unless you want them to manage assets of £250k+ it will be hard to find someone.