Hopefully readers eyes are opened to the risks of IFAs, and we can all perhaps agree that is a helpful thing if it means more consumers seek out the good advisers — and are prepared to pay their transparent hourly or fixed fees, instead of going for the superficially attractive ‘free’ option of commission-based fees.

Thanks to everyone for taking the time to contribute to this debate.

It’s Financial Planning Week soon – w/c 21st November – so quite timely

BTW, IMHO most of the “buy this fund” comments I see tend to come from Asset Managers and Brokers rather than IFAs. Journalists in my experience seem quite adept at seeking comment from the right type of IFA. Maybe I’m reading the wrong (or rather right!) articles. Anyway, to illustrate my point, here is a great article by Matthew Pincent (FT) with an IFA offering truly altruistic commentary – http://www.ft.com/cms/s/0/538f5f3c-e5ff-11e0-b196-00144feabdc0.html

My comments aren’t deliberately inflammatory as such, though I admit they are written in a thought-provoking fashion. Also they were written in the full heat of my anger at this character.

If you’re one of the good IFAs then I’m pleased to hear it. The market is going your way, and you don’t need my endorsement.

IFAs who have grown fat for decades shoveling unsuspecting customers into whatever product pays them the best rate though deserve everything that’s coming to them.

Personally I’ve never heard among my friends of anyone who has had a good experience with IFAs, though again I accept they’re out there. It’d be a bit strange, though, wouldn’t it, if we could say the same about doctors or dentists. “Some of them won’t leave you worse off than when you went in”.

I accept that it’s the system as much as the individuals involved, but the fact is that system has repeatedly failed its customers, whether at the level of the regular financial scandals we’ve seen over the past 20 years or day to day examples like my friend’s experience above.

If this one article on the Internet at least causes a few people to do some reading before going to visit an IFA, that’s great. I don’t apologize for presenting the facts as I see it, especially when the newspapers’ money pages are full of high-profile IFAs each and every weekend suggesting readers buy this or that fund, instead of suggesting they invest in passive funds like all the evidence suggests — and without a similar balanced caveat (to that I’m challenged for not including) that *as a group* IFAs have been creaming off 1-3% or (much) more per year from their clients for decades based on what financial firm provides them the biggest kickback.

It’s bad enough that the fund managers et al themselves are so opaque. It’s a disgrace that the interface with the public has just made things worse.

Happily I don’t need to even argue my point, because as you know the government has done it for me, with the post-RDR era due to sweep away the whole rotten edifice of commission-based advice in a ringing endorsement of my personal point of view that it stinks.

(EDIT: Forget to say that the adverts under the banner are fed in by Google Adsense, and regularly change)

To say that the number of decent IFA’s is akin to the number of criminals who call the police when they see someone getting mugged, is disgraceful.

However, what makes me think this article is more about self publicity than giving a balanced opinion is that you don’t actually believe what you write. A glance at the affiliate banner above your article for “Which Advisor” pointing people in the direction of IFA’s confirms it.

And when your friend does take ‘advice’ from his unqualified, uninsured, armchair dabbling ‘investor’ down the pub based on no fact find, no established process and no attitude to risk assessment, I hope you write in similarly vitriolic terms.

But the issue for me is:

* That this is someone encountering professional financial advice for the first time, who gets unsuitable advice and is gouged for 3-7% for it.

* That the same sort of advice would certainly have been given at £500, £1,000 or £10,000 a month, which is more typical of an investment schedule. So your argument doesn’t really stand there.

* This was a family friend. What is it in his heart that stops him saying: “Put £50 every month in an FTSE 100 tracker and save the rest in cash for a few years and come back to me for a more detailed plan when you’ve more income to save”

I know advisers will respond that in general they can’t give that sort of advice due to risks and regulations. To the extent that’s true, then it doesn’t stop the whole system being rotten. And anyway, he could still have recommended something safe, balanced, and very cheap like the 20% equity option from the new Vanguard LifeStrategy funds:

http://monevator.com/2011/10/18/vanguard-lifestrategy/

(Not that fund because it wasn’t available when this piece was written, but a similar proxy).

Thanks for adding to the debate.

Completely empathise with the need to create headlines to get heard. It’s something we’ve wrestled with in our first few weeks of PR activity. There’s a very tricky balance to strike between warning against the bad, and inspiring to seek out the good. We’ve learned a ton on this in recent weeks….!

Looking forward to future posts!

The opportunity for the good IFAs is manifest, in that the competition is so dubious.

One day this post will hopefully seem an anachronism. “What is his problem?” new 20-something savers will ask in 2022 or whenever. I look forward to that day.

But for now, with the industry still fighting RDR and memories of everything from 8% kick-back commission bonds to investors funneled into unsuitable Unit Trusts for the fees to shocking experiences like my friend had above — the equivalent I’d say of a 19th century quack dentist pulling out all the teeth because of one rotten molar — I think there’s still some time before then!

Good luck with the new service, and I genuinely help it helps the very best IFAs rise to the top, because my postbag suggests that’s much needed!

Thanks for stopping by.

This blog post, and the comments, highlight two key points. First, some advisers are unscrupulous, as is the case in all walks of life. However, many are excellent (I’d include Pete Mathews – above – and many other IFP members I’ve met in this bracket). Second, like it or not, for the vast majority of the public the choice is either do nothing or go to an adviser. That said, fortunately, with the rise of the internet – and blogs like this one – a new breed of “Validators” (term coined by Forrester) is emerging who educate themselves online before seeking professional advice.

The key questions are therefore – 1) how do we best attract, engage and inform validators online 2) how do we connect people with the many good advisers out there?

(2) is where VouchedFor comes in (though in time we hope to address 1 also). Our site includes only fee-based advisers, lets clients leave reviews and ratings on the adviser. You are right to point out (on the Independent) there are challenges in delivering a perfect rating system, and we intend to keep working on how we do this. That said, I’ll confidently say that already the site gives you a far better % chance of finding one of the better advisers than any alternative.

Thanks again for your comment and, again, great blog!!

And people have said the title of this article is over the top…