Question
I'm fed up with being ripped off by IFA's since being widowed 7 years ago. Realised its happened twice now.
I was interested to hear about Bestinvest. Are they a fund/investment management company themselves or not?
I'm trying to get my head around the different types of companies within the industry to understand who I'd be paying money to and for what?
I'm considering using them pending a reply to an email I've sent to them, but am not sure if they'll only advise on their own investments? Can they also do insurance products etc and full range of tax wrappers?Answer
I’m sorry to hear about your bad experiences. While they’re not representative of all IFAs, I fear far too many people are still not getting the advice, value and service they deserve.
The good news is that provided you keep your eyes open and know what to look out for, it’s fairly easy to spot when a financial adviser (or product provider) is trying to take you for a ride – allowing you to walk away. Raising awareness of these issues is my main motivation behind running this site.
You should find our financial advice page helpful in explaining the difference between different types of advisers, but a quick summary below:
Bestinvest is an IFA but also offers discount broking amongst its services and is unique in offering full initial commission rebates with independent advice on fund portfolios of £50,000+, paid for by trail commissions. I think this advice tends to be restricted to fund investments (e.g. it wouldn’t include protection or inheritance tax advice) although it probably does include advice on fund investments held in pension and investment bond wrappers. I’m sure they’ll clarify when replying to your email. Bestinvest does run its own funds of funds, but also offers access to other funds in the marketplace. The latter is probably a better deal if you get advice as it'll be cheaper (lower overall annual fund charges).
Alternatively, consider using a fee-based IFA who charges an hourly rate or, if the sums involved are modest, a percentage-fee. You might have to speak to several before finding one that you feel you can trust and offers value for money, but it’s worth taking the time to find a good one. You certainly don’t want to get ripped-off again and a good IFA who charges a fair fee and looks after you long term can be worth their weight in gold.
I'm fed up with being ripped off by IFA's since being widowed 7 years ago. Realised its happened twice now.
I was interested to hear about Bestinvest. Are they a fund/investment management company themselves or not?
I'm trying to get my head around the different types of companies within the industry to understand who I'd be paying money to and for what?
I'm considering using them pending a reply to an email I've sent to them, but am not sure if they'll only advise on their own investments? Can they also do insurance products etc and full range of tax wrappers?Answer
I’m sorry to hear about your bad experiences. While they’re not representative of all IFAs, I fear far too many people are still not getting the advice, value and service they deserve.
The good news is that provided you keep your eyes open and know what to look out for, it’s fairly easy to spot when a financial adviser (or product provider) is trying to take you for a ride – allowing you to walk away. Raising awareness of these issues is my main motivation behind running this site.
You should find our financial advice page helpful in explaining the difference between different types of advisers, but a quick summary below:
- Independent financial advisers (IFAs) – can recommend products from the whole of the market. They must offer a fee option, although many still offer commission as their default option. If fees, they might charge a percentage or hourly rate.
- Tied advisers – can only recommend products from one company.
- Multi-tied advisers – can only recommend products from a selected range of companies.
- Discount brokers – generally offer no advice but can transact most products in the marketplace and refund some of the commissions they receive.
- Product providers – the companies that run the financial products offered by advisers, e.g. unit trust managers and insurance companies. Their products will incorporate fees and quite possibly sales commissions. But although they might also offer their products for sale direct to the public, the cost is likely to be the same as buying via an adviser.
Bestinvest is an IFA but also offers discount broking amongst its services and is unique in offering full initial commission rebates with independent advice on fund portfolios of £50,000+, paid for by trail commissions. I think this advice tends to be restricted to fund investments (e.g. it wouldn’t include protection or inheritance tax advice) although it probably does include advice on fund investments held in pension and investment bond wrappers. I’m sure they’ll clarify when replying to your email. Bestinvest does run its own funds of funds, but also offers access to other funds in the marketplace. The latter is probably a better deal if you get advice as it'll be cheaper (lower overall annual fund charges).
Alternatively, consider using a fee-based IFA who charges an hourly rate or, if the sums involved are modest, a percentage-fee. You might have to speak to several before finding one that you feel you can trust and offers value for money, but it’s worth taking the time to find a good one. You certainly don’t want to get ripped-off again and a good IFA who charges a fair fee and looks after you long term can be worth their weight in gold.
Read this Q and A at http://www.candidmoney.com/questions/question156.aspx
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