Is Financial Advice Worth It?
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- Опубликовано: 15 июл 2024
- Tom Morgan has worked in the financial advice industry for 12 years. Recently he decided to go it alone, leaving the firm he’d been working with, because he has big concerns about how the industry works.
Tom’s website is here: www.orcawealth.co.uk/about
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Disclaimer:
This is not financial advice. The reason it’s not financial advice is because it’s not tailored to you. We explain the principles of building wealth but if you want personalised advice, it’s worth speaking to a financial advisor. As with everything financial, please do your own research. We really encourage that because no one cares more about your money than you and if you learn the basics then it will change your life.
Chapters:
00:00-00:37 - Intro
00:37-08:10 - Does the industry provide value?
08:10-14:57 - The St. James’s Place Model
14:57-15:54 - Hostinger Ad
15:54-19:59 - Fees
19:59-26:01 - Key questions to ask a potential advisor
26:01-29:23 - Is the industry properly regulated?
29:23-36:00 - Where should people go for guidance?
36:00-44:40 - What a financial plan could give you
44:40-48:21 - When could you stop saving?
48:21-53:01 - Advice for those just starting out
53:01-55:53 - Key takeaways
I have been self managing my retirement portfolio with about $1m in pension plans for 5 years now, unfortunately I've failed to outperform the last 2 years, and this has got me worried. Are there anyways I can turn this around or should I sell off?
Agreed, I'm closing in on retirement and have benefitted much from using an advisor thus far. I didn’t really start early, but have compounded my interest over 280% summing up approx. $800k since the rona-outbreak till date. At 50, I'm financially independent.
I'll be kind to leave just her name here ''Karen Lynne Chess'' a renowned figure in her industry with over two decades of experience. I'd suggest you research her further on the web.
I appreciate this. After curiously searching her full name online and reviewing her credentials, I'm quite impressed. I've contacted her via her webpage as I could use all the help I can get.
What's wrong with an index fund?
SPAM
I was excited for the first 20 mins thinking: ‘here is a new-breed of IFA that I could work with’, but then he discussed his fees and I realised it’s just another guy wanting to take a percentage of your ongoing wealth for a chat once or twice a year. Why not just extend the fixed fee hourly rate charge and have people pay for your advice.
Such a shame as I had high hopes for this episode.
There are fixed fee models out there. But many fixed fee models end up significantly more expensive than %. The planner is on boarding significant risk, alongside their time, software usage etc there are very few financial advice firms out there making crazy profits.
You’ve clearly not met the right adviser or have this view that they just ‘take your wealth’ for a chat once or twice a year. I’ve worked with my adviser for nearly 4 years, paid a % based fee and it’s been brilliant. Having worked with them for a few years, I can see it’s far more than just the occasional chat. I would never use a restricted adviser, the like of SJP or True Potential etc because they can’t tell me about anything but their offering and they seem more expensive based on my research before choosing my adviser. Independent makes so much sense as this podcast covers
Could you let me know how an adviser should charge and how much as I'm looking into this right now
@@khiburgess5848this video explains it well and sounds fair to me. It’s similar to my fees. Speak to a few to make sure the charges are reasonable and make sure they’re independent, but that’s my opinion. Ultimately, I chose my adviser because they were fair with costs and I built trust with them.
@@Jacob-ib6mu Using the Candid money Investment charges calculator, if you invest £200k lump then £1000 every month for 25 years a 2% management fee works out to over a million pounds based on a 10% return (SP500) or £500k based on a 6% return... Vanguard SP500 0.7% fee plus platform cost of 0.15% same figures and time period with a 10% return is £147k or £64k based on a 6% return. Why wouldnt you just pay somebody as a one off when you want to retire/start withdrawing money on how to do that most tax efficiently as opposed to paying this ongoing expensive fee for somebody to hold your hand... 500k-£1mill is a LOT of fees over a long period of time and can be the difference between ok and amazing imo. Whats £10k for a one off fee if it saves you £500k
Thanks for having me guys, loved it. Great podcast. Tom
Good luck Tom!
Thanks Tom. We loved having you on!
Good to see Tom. Looked after me as a financial planner for 5 years, loads of time for his clear thinking and talking 👍👍
No one is going to look after #1 better than yourself, I know it may not be for everyone but I believe everyone should take their personal finance seriously.
Now there's a rarity - an IFA/IPA who has a soul and a conscience. Great interview Damien. atb
Great podcast. I was was with SJP at the start of my investing career (didn't know any better). It was great for me to get a start. I had a very small amount to invest so I must have been lucky to get accepted. Looking back I was paying 5.5% fees and that was with a 2% discount. I eventually pulled every and went completely into the global index funds. Never looked back.
47:00 Having a heart attack at 52 like I did in January certainly has you asking these kind of questions ! 3 weeks into my post-stent recovery my employer announced they were looking to make 250+ people redundant through an enhanced package. I've taken the money and I leave in July. At the very least I'm taking the summer off but a really loud voice at the back of my head is shouting - “…you had a scare, how much longer do you have ? You live frugally, the house is paid off, you have twice the average pension pot saved already - Coastfire on the redundancy payout ! “ Hmmm....
ur relativley young but look at it this way . Did you ever see a tombstone that said "wish id have worked a year longer "
You don't need a planner - save ya money - just watch this RUclips channel instead!😆(subject to the disclaimer)
When you have the money it’s worth it. It’s like having an accountant, it’s a lot cheaper to study business law yourself and do your own calculations but is it worth it. Money is a tokenised storage of your time and energy. Sometimes you may want to focus your time and energy on another project and don’t mind paying someone else for their service.
My example is I have cleaners who come in once a week. There’s 4 of them, surely their profit margins will be better with just 2 or even 1. But it saves time and energy for them.
It was a great episode - inspiring and cementing my beliefs about what should be the right direction for the industry. I was watching with internal unrest why isn't there another chair I could sit in? lol. I made the same move last year on the way to support those in even worse positions, foreigners who came to the UK in the previous decade or two, working hard, contributing to society with a quite hefty chunk of money parked in their bank accounts or unallocated surpluses because they have no bloody idea how the finances and industry work in the UK. In most cases, in a different way compared to their country of origin. Great job guys! It's good to see that we use the same bit of technology - the IO. Good luck man!
Great episode…
One of the struggles is working out where to find the right advice…
If someone has a DB pension, an AVC associated with the DB when it was closed, a SERPS opt-out pension, a with-profits pension, a workplace DC pension - do they need Financial Advice? Financial Planning? Pension Advisor? Consolidation advice? Etc.
What really frustrates me is the message in the media of "if in doubt, see an independent financial adviser". That really doesn't make sense for the vast majority of people, given the fees involved.
I'VE BEEN GOBBLED UP🤣🤣🤣!! What a cracking line, loved the bants towards the end of this ... made me proper chuckle. Excellent podcast and I totally commend Tom for his honesty. You dropped some liquid gold in this pod, particularly loved you sharing the perspective of not forgetting WHY you're investing and to enjoy it along the way. Great to see you happy Tom, wishing you all the best with Orca Wealth.
Great piece of work Damo !
Big fan of your work and your format .Really interesting having Tom's imput .
Don't know how but I seemed to get on "the prospect list "of a large financial advice planning organisation They were very keen to keep "just to give you a call "every few months to see if I wanted to come on board!!!Going by what I've learned from Tom and you this evening I feel that if idd have been taken on as a client idd have had an expensive time in leaving
I don't think it's appropriate for me to name the company and feel for the poor sod who was wasting his time flattering my ego trying to reel me in .
On a reasant visit to family I advised my 20 something grandson of your top work and the power of compound interest and what time and regular investments could bring Great stuff keep up the good work .
Tom Morgan is straight up the GOAT
My IFA made more out of my pension than he made me! It's criminal how much IFA's charge & it's a monopoly re the fees they charge. There needs to be a cheaper version of the financial planning software availability that individuals can use.
Damien had Ramin Nakisa in his podcast about month ago. And he's got som financial tools on his website. You need to be member to use it but it's reasonable priced (£16 a month I think), and you can cancel anytime.
ruclips.net/video/VLzgrbSRDCc/видео.htmlsi=WRTfc2_7QrcWRA-W
I'd be almost certain that you'd be better off with a financial adviser including their fee, than going it alone.
Great normal talk and conversation that most people can follow and understand, great work guys.
I wonder if there is any scope for advisors just providing the first fixed charge part of the process - the planning. Then the individual goes off themself and follows that plan using their own platform and products. Maybe repeat that process for a fixed fee every so often or if a situation changes the plan.
Or is it that there is just not enough money in such a transactional arrangement for the advisor to take an interest.
maybe as his previous employer said that doesnt keep the lights on .............
as someone who worked in a AR firm and now works in an IFA, i cant say enough good things about this podcast! Had theses thoughts from late last year and now seeing others finally focus on cash flows and showing that advisers need to show there worth is perfect.
Honestly, the last few minutes of the podcast were bloody hilarious! 🤣 great episode, so refreshing to hear people like yourselves in this space, thanks for all you do.
Ongoing AUM fee is never justifiable and will cost the client massively in the long run. Just charge an hourly rate!
Including vanguard's fee, or the interest margin (which is effectively a percentage fee) on your NatWest bank account?
Agreed, see my other comment
Not necessarily. If you're a lower value client. A fixed fee might end up a massively higher percentage
this is one your best interviews going guys, very much appreciated and funny at the same time. He will now be known as the gobbling orca :)
I advise you guys to have a look at Dave Elder-Vass book 'Inventing Value'. A key issue to get clear is how to judge what is actually of value? I really like the argument that what Jo public need is education, particularly financial planning education.
Is it just me, didn't he say at the start of this interview there was no increased value using a financial advisor over a passive fund. So why would I want to use this advisor, or planner.
In the context of the stock market, yes. But I think there is a lot more than just the investing and making a return element. Which vehicles you use, how shall you use them, what to consider in different positions/ family circumstance and asset splits for tax efficiency and longevity. This is where the value of good advisor / planner comes in, it’s not just the investment choice
@@nishnosh yeah that all fine but one, do you use an advisor because you tend to just sell ETFs as your investment vehicle. And ultimately he said there is no difference between using an advisor over an ETF. Also you also let it be known that your finances are not the best because you have had to release funds when a big bill has come your way. Which would suggest that you are not really in a position to be a proper investor despite your RUclips blogs. I would not pay an advisor a lot of money which your guest was charging, a lot!!! To be told, well maybe put it here and here. Thanks a lot but no, I've been able to do that myself. Also you guest changed his stance from financial advisor to a financial planner. Which would suggest he is no longer using the regulations that he was once regulated under. Even if he stays under that banner his fees are still very high considering what an ETF would cost.
What a great podcast. Soon to be needing advice and thought provoking enough that need to get a clear view of my plan and to sort my current situation - Thanks
in addition to last just shown to my son (23). "I didnt know anything about this and why werent we taught in school" Dont want to mention an oxbow lake and the good that has done
What a great episode 👍
Great episode guys! Really enjoyed this one and best of luck with your new firm Tom!
More of this!!
I'm with SJP and wish I'd never heard of them tbh
Look like me, you are part of the 93 percentile who stay with SJP, according to the statistics, because we love it so much, I on the other hand, we stopped making payments to SJP 6 years ago this November so as of November, we will be taking out the lump sum we started with and putting it into our Vanguard account which charges next to nothing by comparison and every month. Thereafter, we will be taking you out or contributions and depositing them as well until we no longer with SJP
Same here! Like Damo and Tom said in the video, there's probably some good SJP advisers out there, but that wasn't my reality. I saw first hand the ridiculous fees which changed depending on how the adviser felt. Poor returns and when asked for further information I was frequently told it's because I didn't have enough invested. From watching Damo's videos, I started educating myself from the ground up. It all started to make sense, and the things my adviser said weren't important, clearly were and needed addressing. My adviser realised the game was up after I presented all my findings in a report and he struggled to answer my questions, it was at this point he started to become nasty. Told me to leave and that if I chose to self invest I'd lose all my money.
I transferred everything from my SIPP and ISA's (took the exit fee hit on the SIPP) to Vanguard and I haven't regretted it once. My portfolio is now thriving and I have full control over it. Through what I learnt from Damo I educated my dad on what was what, he also also decided to leave and told all his friends and family to do the same.
Worth mentioning, after I left I made a complaint directly to the SJP's head office on two separate occasions about the conduct of my advisor. They independently investigated the claims and found I was telling the truth and I was awaded over £2.2k in compensation. My advice would be to document any wrong doings (Emails, secure messages, etc.) and don't be afraid to stand up for yourself. Like the guys said in the video, these sharks are using you to harvest fees, they're not bothered about your actual investments. Best of luck my friend.
@@rocksy71 I've moved people from SJP who even with the exit charge have saved money with our advice/proposition!
Once again wonderful life advice. This is what a working fairer demos looks like. This is what will change Britain for the better. Great to share the fun you are having with us too.😂
ive just started with SJP but I have just invested my closed pensions, they have adjusted there costs to be competative with what my company pensions are charging. My live pension I am leaving in company - jus t to see what the comparison is. its all a learning curve!
Odd angle, but that part about the Church Organ. If it was in a bad state of repair then £50,000 maybe around a third of what’s needed to sort it out and there are few companies in the UK that can do the work.
Very good.
The SJP model is not the same as the IFA model
Really good video. I might be going against the grain, but a lot of the issue with people not planning their finances is down to personal apathy, and not through lack of information. In today’s world there is a huge amount of information about financial planning, especially on platforms like RUclips…more so than there has ever been in the past. There is a pervasive belief that it’s the finance industry or the government that should do more, but whilst that may be true to some extent, individuals bear most responsibility for their own planning. The information is there if they can be bothered to look for it.
Finally the one we have been waiting for the 🐐
I would council youngsters slightly differently - enjoy your 20s and don't get too bogged down in saving money. OK you lose some valuable compounding time but that's the time of your life when you can make really great memories. Travelling in your 50s or 60s just won't be the same. Youth is for being young - enjoy it and worry about money later!
Love your content, sorry to ask but what brand is that t shirt please? the one with the hologram on.
Wonder whats the biggest amount of money hes lost a client ? As the phrase was used "But thats not what keeps the lights on" it does come over a tad of a parasitical industry if theycant really beat a good old diversified ETF
Turkeys what all that about? Brilliant video so informative...
Great video and great to see Tom! Thanks.
Great video, when are you switching out T and bringing in Toby Newbatt?
This is a gem, you should invite him again! Now I'm subscribed to this podcast.
I know this pod doesn't get a lot of views but it's the best personal finance resource on the internet
Thank you lovely feedback! We do a lot more views on audio platforms like Spotify than we do on RUclips
So if my maths is right a pot of £600k would set you back £14,600 for setup, managing and the first year of coverage? That is a significant amount of money.
0.85% per year ongoing advice fee😮. At our Financial Planning firm , we target people with £750k+ and charge 0.3%. Sounds like he uses low cost trackers just to make the all in cost look better.
Thanks for the video, it is appreciated as well as Tom's time. However, he is charging a hellvua lot for his services, IMHO. £1500 + 2pc of 200,000 = £5.5k (minimum, more if over 200k). Plus 0.8% per year. Phew!
How much would think is fair or even how should he charge I'm looking into this and would appreciate your input.
@@khiburgess5848one quarter of the above would be a decent start
He seems like an honorable guy. But still, the average person can spend 1 hour watching a few youtube videos, open up a trading 212/vanguard account and achieve the same results for free. It seems like the whole industry is geared up to people who have just fallen into money or have saved their way into wealth and want to grow their money a bit more. Otherwise why would you get a financial advisor?
A lot of people here are moaning about the charges it would interesting if those who are critical could tell me how an adviser should charge and at what level assuming I were to go to Tom? People's insights would help me greatly.
Great convo. Would be good to know what the £200K threshold would be a combination of. Pensions? ISA’s? Real estate? A business? Cash? Commodities? All of the above?
@Making_Money_Podcast 🤣 Could've fooled me
I'm not sure that characterising investment choices as solely between actively managed funds v indexed funds is accurate. Allocation of money to investment sectors (actively management or index) and the weighting thereof is what every investor needs to grapple with. If you choose the right market to invest in you will make money.
Just one question to Damo, whould you ever use a IFA over the Vanguard whole world ETF?
I would use an IFA when i near retirement to help with tax planning and estate planning. I would not use one myself to help me invest. But i understand why many would
The idea of paying a percentage of my investment to someone who has to be beaten into “treating me fairly” is repulsive
I would be interested how should and how much should an adviser charge as I'm looking into this and your insights would be great
9:35
The thing is (IMHO) the ways you can structure your finances are limited. So I do not see what the value is in paying a few thousands to listen to advices like: maximise your SIPP contributions, don't forget to use your tax allowances, open a LISA, buy into ETFs regularly. In the end, the majority of the information is available for free.
I would caveat this by saying, "active management doesnt add any consisten value", UNLESS you are super wealthy and able to invest in Hedge Funds who are able to get returns in excess of 25% +. But obviously these funds. arenot available to average people.
Ha ha my gran is exactly the same! It’s now a running joke with the number of slippers I have bought her
To anyone considering this, a fee of 0.85% is incredibly high. Tom says you shouldn't pay an advisor to build your index fund because it makes no financial sense, financial advisors have no business taking a percentage of your earnings. It's a scam and even 0.85% will cumulatively MASSIVELY diminish your earnings. Check out Damien's own comments on Vanguard's increasing costs and why he moved.
I would be interested to know how should and how much should an adviser charge I'm looking into this and would be interested in your insights
So he quit to make money doing the same, but for himself.
Ok so I'm ready, I've done everything right but I'm one of the 90% so what you're telling me is I'm screwed.
12 years in the industry, wow...,
cant be arsed with wots app. twitter or facebook. financial advisors are lepors ...
Flangeinator, LOl. 😂
Yes, that had me chuckling too. I have very little clue about what's under the bonnet.
Flanginator is broke😂
Whatever " they " want you to do , do the opposite.
This IFA is asking for too much money. He talked about “responsibility” but not “accountability”.
How much would think is fair or even how should he charge I'm looking into this and would appreciate your input.
@34:30 Of course education can help you make money, through working hard. Stop thinking there is an easy get rich quick scheme through "investing money". Invest in yourself first and foremost. Learn! Seek out opportunities and take them. I wouldn't have what I have without knowing Pi.
That post makes you look really very uneducated.
As i watch this, SJP shares are down 56% over the last 12 months. It seems Mr Market doesn't think much of them either. The folks who watch these type of YT channels are sadly not the one's who would benefit from the professional financial planning IMHO.
God, please stop. I can't take any more. As much as I really enjoyed the video, the ending was totally epic.
Hilarious hes been gobbled up haha
Shocking episode, would alomost call it an insult, dont give these people "IFA" your money!!!
How much would think is fair or even how should he charge I'm looking into this and would appreciate your input.
I’m all for lads being laddish but if you want to be taken seriously perhaps rethink Timeyin offensive t-shirt. I’m off to subscribe to someone else.
Strong conflict of interest and heavily biased. SJP model is totally crooked.
🤣🤣🤣🤣
Get Dave Ramsay on !
Or get the other Damien from MTTM on.
Loved the podcast bro.
Why you guys are not doing short-form content ?
You can pull so much views by clipping valuable clips from here & editing it & uploading on tiktok & instagram,that’s how every podcast grows.
If u need help with that let me know what is best way to contact u guys.
Keep working Hard G’s 📈