How to keep your investments inhouse

Complete Nonsense

IFA should stick to managing clients risk not assets they neither have the qualification or time to do such a task. Do clients actually think you are an investment manager? I think not. £130,000 spent on research etc, I would love to see the breakdown of this figure, how is it quantified? using the standard IFA cost of £150 per hour that is around 867 hours per annum spent on research thats 16 hours per week is that enough? I doubt it. Why wouldnt you want to let INVESTMENT PROFESSIONALS do what they are paid to do 24 hours a day 5 days per week 52 weeks of the year. Spend your £130,000 elsewhere on things such as risk assesment tools/Extra Paraplanner and Admin. Lets all be honest Financial Advisers picking funds etc is a complete ego trip, its not the 90's markets don't just go up.......... "I step down off my soapbox"

Posted by: This Worries Me

Stick to your day job!!

couldn't agree more with previous post. Imagine a GP thinking he can do brain surgery because he goes to a few lecture every quarter and meets with the surgeons to understand how they do it! Utter madness. IFAs whould stick to tax planning, holistic financial advice, retirement strategies, debt counselling,inheritance tax mitigation schemes, critical illness, permanent health insurance, schoole fees planning. Leave the money mangement to the experts and if you don't believ they are any good, then they should use passive instruments. IFAs have got enough on their plate without trying to make asset allocation calls and picking the "best" funds.

Posted by: Daniel Ferguson

They missed the point...

I'm sure Peter's expenditure is pretty much like ours, wher the money is pent on in-house investment analysts that we employ. Having spent the last twenty years with us our clients, like Peter's, now have £3/5/700,000 accumulated in their pensions/portfolios and what they both want & need is professional management & guidance. We bought giant slugs of Axa 10 year corporate debt yielding 11%+ back in 2009 for clients' SIPPs; we bought Barclays shares at £1, Murray International whilst it was still at a discount and have been offered stock in Lansdowne's new share class issue. What we have come to realise is that there is a clear schism within our sector, when I look around at IFAs I recognise little in common with our company and what we do for clients on a daily basis. I suspect Peter's business is the same. There's financial planning, and there's investment management - not sure what the point is of anything else. After years of communicating unit linked disappointment to clients it is liberating to have the resources to do the job properly. Read Charley Ellis, read up on dividend investing, and make sure you are happy to quote in big letters to clients the TER's of their portfolios, including the adviser fee. If you were a client with £X00,000 in your pension what would you want from your adviser? A hug?

Posted by: Doug Brodie

Two Tribes

But which shoudl you fall in? It appears to me a lot depends upon the general make up of your client base. Most of our clients have investable free assets of £100k to about £400. For the lower end, bespoke portfolios is certainly not going to be appropriate and hence for these I would agree with Daniel Fergusons observations. Larger cases, a more bespoke approach MIGHT be appropriate, but the time spent doing the extra research required for a very small proportion of ones clients is not good use of time if you have a discretionary fund manager you trust who will do it for you. On another note, taking teh Keydata being an intermediary issue to it's logical conclusion, the Jupiter Merlin Portfolio's are provided by Jupiter as an Intermediary rather than a fund, if an IFA says their default for clients is to reccomend clients hold an appropriate Jupiter Merlin Portfolio on Transact and the IFA then just adjusts the overall portfolio to maintain asset allocation correctly to balance off portfolio cash and share holdings, will this mean the IFA firm would have to describe themselves as "Restricted" as if you think about the fact Jupiter Merlin is Intermediating other funds?

Posted by: Nameless

Difference?

Whether it is outsourcing to a DFM or managing in-house the requirements upon an IFA are the same. One must have sufficient knowledge to determine what investment strategy is appropriate and whether the solution is valid. Both need to be reviewed regularly otherwise clients attitude to risk could become mismatched. In both routes the IFA is taking a strategic decision leaving, in the most part, day to day tactical decision making to a fund manager (very few DFMs actually do this so is left to underlying fund managers). Just imagine an FSA visit - "and what investment strategy do you have Mr IFA? IFA: I outsource everything to ABC DFM FSA: Oh and how did you decide upon ABC? How regularly do you review their portfolios? How do you ensure they are compatible with your clients requirements and attitude to risk?"

Posted by: KB