Independent financial advisers and 'your' moneyPosted by Anthony Martin
If IFAs are so clued up, why do they share my penchant for pale blue v-neck jumpers?
The more you read (and try to understand) the financial advice delivered by the media, the more you realise that it would probably be easier to pick up a degree in bio-chemistry or, at least, engineering, than find a home for your carefully saved pennies. The ability to add up, take away, balance a cheque book, earn money and pay taxes gives you no insight into the mysteries of bonds, trackers, pensions and hedge funds. So trying to grasp the whys and wherefores of investment planning, pensions, inheritance tax avoidance and such is all a bit of a risk. Enter the IFA, the man who can find his way through hedge funds, and is willing and able to guide you through the maze. Unfortunately ‘risk’ is a much-used part of his vocabulary.
Now I am all for professional advice. I hold those who are ‘specialist’ in high esteem. I trust doctors to give me a correct diagnosis and the right antidote for anything from heat rash to post-hip replacement discomfort. I trust lawyers to tell me if I can make my neighbour cut down the tree that is leaving my kitchen in 24-hour darkness. I trust dentist to crown me, further education teachers to enlighten me, and dance instructors (should I ever feel the need) to ensure I know the difference between a foxtrot and a fandango. I also expect my pros to look the part – doctor complete with stethoscope, lawyer with greying temples and poised pen, a dance teacher to come complete with skin-tight trousers and patent pumps. Stereotypes yes, but then that’s faith in the familiar.
So what do I expect of a financial adviser? Well for starters, that he has sufficient command of the language not to confuse ‘you’ and ‘we’ – this is, after all, my money we are discussing, not our money. And that he can cut through any jargon and say something straightforward like: “Put your 10K here and I guarantee it will become 15K in two years (well okay, that’s a bit optimistic, but you know what I mean). I want him to tell me what steps I should take to stay afloat during retirement, not to warn me of the sink-or-swim possibilities. Without mentioning the word ‘risk’ three times in a single sentence.
Would you buy a home/car/operation from a man who says that there’s just as much chance of it collapsing/breaking down/failing as there is in it doing what you expect? Would you buy a new dishwasher without a guarantee? Of course not.
So why would you want to put your trust and dosh in the hands of someone who, judging by his clothes has not earned enough to treat himself to a Savile Row suit. If an IFA does have an inside track, wouldn’t he be racing to hit the golden jackpot himself? Why isn’t he driving a Roller and wearing Patek Phillipe? Why does he look like, well, me? He crosses his arms when I cross mine. Leans forward as I do. Shares the same penchant of pale blue V-neck jumpers.
Good heavens, I am sitting opposite myself. Or am I? My line of conversation is more of the grandchildren/gardening/what-the-government-is-up-to type. His is of differing growth rates three percent, five percent and even nine percent per annum (his joke, not mine). I had one investment where the management charge was greater than the growth. My asset was shrinking each year and if I wanted to cash it in they would charge me to give me back my own money – or what was left of it. The underside of the mattress looks decidedly attractive.
For years our money has been going into various pension pots. My wife’s main pot was run by a certain late publisher named Maxwell and we also had an early IFA who was last heard of in Spain having trousered clients' money (not ours but friends who we had introduced).
I used to think others strange when they said “Pensions forget it, put your money into property and never mind the tax relief”. Why, oh why didn’t I listen to them? Now I know why, it was that lovely man who dressed like me, talked like me and laughed at my jokes.
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