This was the title of a communication written by a chap called “Dr.” Mike Tubbs in his Research Investments newsletter.
Like yours, my family makes a living in this sector so this type of stuff really boils my blood…
He goes on to tell his readers about a recent Which magazine survey covering the price and quality of financial advice in Britain.
Apparently, centre stage in the report are the high fees some IFAs charge for carrying out simple tasks such as giving advice on putting £60,000 into collective investments, such as unit trusts.
Tubbs goes on that clients of the “worst offenders” would have to realise a 7% return in year 1 just to cover the for IFA and fund charges. He concludes that as the FTSE only rose 12% in 2013 that means fees would have wiped out 58% of the gain.
It gets better, Tubbs has “a strange financial signal” which anticipates “a series of huge stock market rises” which can give “astonishing gains for investors”
http://www.miketubbsresearchinvestments.com/
Pardon my French but what absolute Boll**ks!
So the best advice is no advice?
Or even better the public should take individual stocks advice from various snake oil “doctors” claiming to have found the holy grail of investing!!
I don’t think so, but this is what you will get when you regulate the “golden advisor goose” to the point where you kill it.
Of course the only reason the IFA charges are what they are is due to the shambles or regulation and subsidising useless internet quangos such as the Money Advice Service etc.
Is Tubbs even regulated, I’m not sure? If so how can he get away with recommending no advice on their savings to the unwitting public?
The thing with trust is it evaporates slowly at first then very quickly hence institutions die slowly and then very quickly, that’s why insiders never see major upheavals coming.
Last chance to fill in the FCA survey and join 300+ of your fellow advisory business owners who want to give some ammunition to the parliament we hope can sort this PIGS BREAKFAST out. Deadline is lunchtime today – click here now: http://www.retiringifa.co.uk/fcacostssurvey.php
Please bullet point and comment below with what you would like to see included in the open letter to Andrew Tyrie at the Treasury Select Committee, all of your points will be included. Let’s hope Tyrie is the man to do something about this mess.
I did see it Steve, I agree with your points above. I have filled in the survey.
Hi Stephen
Fleet street publications have been going on about the end of the world invest in this invest in that
and meanwhile you pay them a large amount of your money for average returns.
As for this story well this IFA managed returns of 25% plus in 2013 and that is after ALL charges!
Plus I’m very expensive so he wouldn’t live with me for very long with his returns.
Keep up the good work
A quick check of the FCA register suggests he is not authorised.
Is this just another scheister playing games at the expense of the rest of us who have passed our exams, paid our fees and try our best to look after our cliens in a professional manner?
What research has Which conducted into Dr Mike Tubbs would be my first question?
John
Hi Steve,
The following points would make good sense to put to them.
1. With regards to payment to the FSCS scheme by regulated firms, it is
very unfair to impose this on firms that have not actively been involved
in schemes such as Arch Cru and Key data as a matter of principal
against structured investments. Surely the costs of these schemes should
only be met by firms that have sold these products.
2. The paperwork that needs to be produced and amount of time that has
to be taken on a simple RWL letter on a fund switch or ISA/Bed & ISA is
hugely disproportionate to the amount that can be fairly charged to the
client for the advice. Much simplification is needed of the process.
3. As the IFA advisory force is quite substantial in comparison to the
bank advice sector and the level of complaints is correspondingly
lower, it is appropriate that more smaller IFA practitioners are invited
to join the FCA panel (paid for their time) to assist the FCA in
redevoping the rule book.
4. The RDR has meant that it is now impossible for lower and middle wage
earners to afford financial advice due to the cost of compliance
imposed on regulated firms. An example of this is personal pensions
whereby the advice element on a regular premium contract was paid by the
provider over 4 years. The client now has to pay an up front fee which
could be perhaps £1200 to cover the cost of the advice and initial
meetings. This applies equally to regular contribution ISA and
collective funds.
5. A blaring anomaly with RDR is that on an index linked/reviewable
protection product (including whole of Life), if the client asks for
advice on whether they should increase the sum assured in line with
their personal circumstances, then the commission paid would stop and
the adviser would receive no remuneration for their advice (even though
commission is still allowed on protection products). If they do not ask
for advice, then the commission continues. This is either a blatant
breach of the initial contract with the IFA by providers or a case where
the FSA had no idea of the implications on introducing the RDR.
Hope these help
115234 – Fleet Street Publications Limited
Funny this is the company but Dr Tubbs is not an authorised individual
Steve
I realise that you only send out these emails as a marketing tool but they do a good service in highlighting a number of important issues (to your email base).
Another one for you to consider and use for your emails is Fisher Investments who advertise extensively on the web
Sign up for the free report and have a read of a very convincing report as to why your pension drawdown should be in 100% equities
http://www.fisherinvestments.co.uk/WebAlley/alleyletter.aspx?country=GB&wherefrom=ukremarketing$ukgoo$nopop&PC=GOOUK29K28&cc=M029&tycode=fiuk5&gclid=CKCxg_fGwbwCFWfLtAodewkA3A
Basically what they are saying is that everyone with drawdown should give them a discretionary mandate to run an aggressive 100% equity content portfolio for their drawdown fund.
Mathematically I agree that they are 100% correct in their assumptions for long term potential outcome BUT their marketing strategy which is an “advert” rather than “advice” does not of course have to take regard of each client’s “attitude to risk” or “capacity for loss” (be that temporary apparent loss or permanent actual loss caused by panic at unacceptable downside volatility) – they just issue a report and accept execution only type instructions.
Another example of potential clients reading/hearing what they want to hear and not really understanding the issues. Indeed, how can clients understand the value of an IFAs services if they don’t actually understand just how damned complex the pension and investment world is and some marketeers make it sound “Oh so simple to make loads of money”