# Financial advice - where to go?



## onekeano (28 Mar 2011)

A friend of mine is taking a voluntary redundancy package - I think they are mad as they have no job lined up but the reasons are quite complex  so cest la vie!

The amount involved is c.€75k and they have spoken to their bank who needless to say have a very good deposit rate lined up for when the cash comes through 

I have advised my friend a) to get independent (ie. paid for) advice with what to do with the money and b) no matter what do not put all their eggs in 1 basket.

My friend lives at home is not married, has no mortgage / kids etc.

My questions are:
- where is the best place to go for such independent advice for savings / investment?
- how much are they likely to charge?
- are there any recommendations in the AAM community for investing all or part of this kind of sum?

Thanks
Roy


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## wbbs (28 Mar 2011)

Best recommendations are probably on this site, look at the best buys in savings accounts thread.

As you say don't put all of it in one place, I would be inclined to spread it between the non Irish banks myself but everyone has their own views on this and unless someone has a crystal ball there is no adviser, independent or not, who can give the right answer.

Post Office 3 or 5 yr accounts have the best non taxed return, but, it is government guaranteed same as Irish Banks so again how much faith you have in the state comes into play.


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## Thrifty (29 Mar 2011)

Go to the financial regulator's site or www.itsyourmoney.ie - can get list of independant financial advisors and lots of info on financial products


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## mercman (1 Apr 2011)

Thrifty said:


> can get list of independant financial advisors and lots of info on financial products



Can't find a list of advisors on the site but a list of types of advisors. The list of types are commission driven and if this type are used will act as a 'look after themselves approach'. There are enough posts on AAM about using the types of advisor on AAM and the problems that go with them.

As a pointer, DO YOUR OWN RESEARCH. Invest in products that carry a minimum commission payable on an annual basis and keep away from glossy brouchures which do not carry the full information. Irish Finance Law is somewhat short on providing full facts and figures. Where I come from, it is called pure rip off selling.

Best things to invest at present IMO are ETFs or direct investment in Forestry. Do not be afraid or embarassed to ask questions, as in reality it is your money, not to be shared with dilinquent and crooked sales people who will be very happy to take the money from you.


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## Dave Vanian (20 Jun 2011)

Black Rock said:


> *An Authorised Advisor* is obliged to recommend the most suitable investment product available in the market, regardless of whether or not it holds an appointment from the relevant product producer.
> 
> Authorised Advisors are regulated by the Central Bank / Financial Regulator and you can view their register at http://registers.financialregulator.ie/DownloadsPage.aspx.
> 
> ...


 
Within that register, a percentage are terrible at what they do. A percentage are mediocre. A percentage are good. A percentage are excellent. 

Posting a link to a register is of no use to someone who is seeking a recommendation. They might as well look up a phone book.


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## Gekko (20 Jun 2011)

Silly question, but how do you know that an authorised advisor isn't just spinning you a yarn and collecting a commission?


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## mercman (20 Jun 2011)

Gekko said:


> Silly question, but how do you know that an authorised advisor isn't just spinning you a yarn and collecting a commission?



Because in this mad country, there are no proper rules, regulations or Laws to prevent an investor been defrauded. The Financial Services Ombudsman is a puppet service for the Financial Providers. And just in case there are those that might doubt this, who pays to keep the Financial Ombudsman's office open. Guessed correctly == The Financial Providers each pay an annual fee to keep the Ombudsman's office in existence. A bit like turkeys voting for Xmas.

After losing a small fortune by an Institution in this country, it is now up to me to bring a civil case against the providers to ensure this type of thing never happens to others.

OP for the amount you have intimated, it might be best to keep a proportion in cash and to Invest in ETFs, which have much lower Fees than Investment funds in this country.

But 'Do your own research' and leave nothing to anybody else, and finally get everything in writing.


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## Dave Vanian (21 Jun 2011)

Gekko said:


> Silly question, but how do you know that an authorised advisor isn't just spinning you a yarn and collecting a commission?


 
Don't confuse Authorised Advisor with Fee-Based. Many Authorised Advisors work on commission all the time. 

The designation Authorised Advisor simply means that the firm is authorised to provide advice on all products of a particular type, as distinct from a Multi-Agency Intermediary who can only advise on the products of companies with whom an agency appointment letter is held. 

In practice, I've encountered many AAs who are de facto MAIs as they simply don't recommend financial products of companies that don't pay commission, but will instead come up with other reasons not to recommend them. Which makes a mockery of the system.

Another misconception is that an AA is authorised to provide advice on a wider range of services than a MAI.  Not true.  An AA can only provide advice on the type of products that she has suitable experience and training to advise on.


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## farmerette (21 Jun 2011)

Gekko said:


> Silly question, but how do you know that an authorised advisor isn't just spinning you a yarn and collecting a commission?


 
+100 

very few financial advisors are without an agenda of thier own


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## mercman (21 Jun 2011)

farmerette said:


> very few financial advisors are without an agenda of thier own



Correct !! But there is a Consumer Code to be adhered to. If if an adviser is found to be acting outside the code of conduct, his / her licence will be revoked. Surprisinly enough the authorities do act on this but IMO the Financial Providers deserve to have their wings clipped as well, rather than make the small fry bear the brunt of the sentence.


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## MyAdviser (21 Jun 2011)

Hi Onekeano, as an AA myself I won't talk about what I do but instead give you a few tips for your friend.

(1) Ask any prospective adviser do they review all providers of investments and savings plans? AA's do and they should be able to show you the results of their search including Rabo Direct etc. 
(2) Ask do they charge fees or commission or both?
(3) Ask for a client specific nil commission quote for any investment/savings plan. This will show you the projected valuations based on no commission being charged. Then ask for the same quote but with the advisers’ commission. You can now see the impact of the advice cost on your plan. 
(4) Ask what process the adviser has to assess your needs. They should be able to show you sample reports and examples of solutions possible and take on board all of your financial health not just this one issue - most of the time other factors impact on such decisions.
(5) Don't mention deposits at first - just leave it open that you are looking for advice about what to do with the lump sum. If they don't mention deposits or only skip over them you should then assess what they motivation is. Commission only advisers usually don't get paid for deposits or if they do it is usually much lower than investment based plans. If they do cover deposits then they should be able to advise you on the currency risk, sovereign risk, counterpart risk, provider risk, inflation risk and exit risks. 

It is possible to see what an adviser is being paid for their work via disclosed fees or client specific illustrations/projections. You can then decide if their process and steps taken on your behalf are worth that cost. 

I hope this helps.

Michael Kiernan


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## mercman (21 Jun 2011)

MyAdviser said:


> (1) Ask any prospective adviser do they review all providers of investments and savings plans? AA's do and they should be able to show you the results of their search including Rabo Direct etc.
> (2) Ask do they charge fees or commission or both?
> (3) Ask for a client specific nil commission quote for any investment/savings plan. This will show you the projected valuations based on no commission being charged. Then ask for the same quote but with the advisers’ commission. You can now see the impact of the advice cost on your plan.
> (4) Ask what process the adviser has to assess your needs. They should be able to show you sample reports and examples of solutions possible and take on board all of your financial health not just this one issue - most of the time other factors impact on such decisions.
> (5) Don't mention deposits at first - just leave it open that you are looking for advice about what to do with the lump sum. If they don't mention deposits or only skip over them you should then assess what they motivation is. Commission only advisers usually don't get paid for deposits or if they do it is usually much lower than investment based plans. If they do cover deposits then they should be able to advise you on the currency risk, sovereign risk, counterpart risk, provider risk, inflation risk and exit risks.



No disrespect Michael, but your post is pretty pointless/useless and irrelevant in the Financial market in Ireland. I tried all the pointers you suggested and got ripped off up to my eyeballs. Most of the agents working for the big companies in this country only see one thing -- FAT COMMISSIONS. This acts as a drug to many of these and they will do anything to get their fix.


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## MyAdviser (22 Jun 2011)

*Avoiding being ripped off*

MercMan, you obviously have a strong view based on your own experience and I'm sorry about that. If a prospective advice client followed what I suggested then they would know how much they are being charged for the advice and their product. The quality of that advice does vary - just like any industry and although you knew what you were being charged you feel the advice was very poor for that price. At least you knew what it was costing you. Most clients I work with have no idea how much they are being charged (until I show them). Even though they received illustrations with remuneration tables they still don't know, don't bother to look, trust the adviser. What I have suggested will educate a client and that has to be better than just hoping for the best.

This is worse for policies that I come across that were pre 2001 when commission disclosure came in. At least these days the information is there. Those older plans still pay huge commission on top up's and indexations based on the original contract. The client has never had anyone explain what is happening and when they consider switching they are faced with significant differences between the transfer value and the nominal value of their plan - this gap has the effect of keeping them in the old bad value contract. 

Finally shop around for advice and ask each prospective adviser for the above info. It will help you avoid being ripped off. We may not agree on this but I hope you appreciate where I'm coming from. 

Michael Kiernan


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## Bronte (22 Jun 2011)

Gekko said:


> Silly question, but how do you know that an authorised advisor isn't just spinning you a yarn and collecting a commission?


 
Not a silly question at all.  Facts are there is no one looking out for your interest better than yourself.  Most advisors are looking for what gives them the better commission/fee etc.  A lot such as those in the banks only recommend their own products.  Do your own research.  Know the fees, know how the product works and if you don't understand it then don't buy it.


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## paperclip (22 Jul 2011)

OP, I'm in the same boat as your friend. I think they'd be mad not to take it!

Anyway, I've been looking around on here for a bit, looking for advice on what to do with my lump sum... There's excellent advice on here, but to really understand it, and learn about investing takes time... it's a big learning curve.

So, I was advised to get some professional financial advice. This seems like the best option for me. I've no idea about the stock market etc... so would have no problem paying someone to help me decide the best thing to do with my cash.

After reading the posts on here, it now seems like it's probably not the best option after all. 

I was hoping to get an actual recommendation, but it seems most people are just warning about unscrupulous advisors, looking after their own interests...

Michael Kiernan offers the best advice on here, on how to avoid these guys.

It seems, you have to know your stuff, in order to get advice on this stuff.... Isn't that what I'm supposed to be paying for.... not having to learn about this stuff?

So, let me see if I have this right. I go to an independent advisor. They get commision for selling me certain products?

If this is the case... why wouldn't they sell me what ever makes them richer?

Is it not possible to just pay them a flat fee, hence removing the temptation to just work for the commision?

Also, has anyone used an advisor they can recommend?


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## wbbs (22 Jul 2011)

The trouble is I don't there is such a thing as good advice anymore because the future financial situation is too uncertain, you would need a crystal ball.   It was good advice to buy bank shares when I bought them, we all know how that ended.


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## Marc (22 Jul 2011)

http://www.askaboutmoney.com/showthread.php?t=156835

This thread covers a new qualification that some advisers in Ireland have taken.

Re the last post

It was never good advice to buy bank shares. Buying the shares in a single company exposes you to company specific or stock specific risk.

This is what economists call an ideosyncratic risk. You don't need to take it and you are not "paid" by the market for taking it.

Stock specific risk can be avoided by diversification.

Diversification is good and prudent advice. Buying bank shares is not and never was good advice.

*"Diversification - the only free lunch in investing*" 
 -Harry Max Markowitz, American economist and a recipient of the John  von Neumann Theory Prize and the Nobel Memorial Prize in Economic  Sciences.


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## MyAdviser (22 Jul 2011)

Selecting an Advisor is a tricky business - where do you start? There are fee only advisors but the main down side is that the fee always seems to be large at the start compared to the commission alternatives. It is hard to compare one offering to another and the fee always feels like an additional charge - at least that has been my general experience re client reaction to fees. It takes time to explain the charges - annual management charge, sometime entry costs with allocation rates below 100%, and policy fees. Fee only should deliver no commission, improvements in higher allocation and lower annual charges due to no fund based commission. Policy fees if they apply are usually fixed. 

It is this saving on commission that makes the fee look good especially for larger cases. Financial Planning Advice includes investment strategy advice and it is in that area that issues like diversification are covered. Financial Planning is so much more that investment strategy. Marc is right - "it was never good advice" re buying Bank Shares during one of the most volatile periods anyone has ever seen - it was betting. 

Transparency, Honesty, Experience & Expertise are key to selecting a financial advisor and they can give you a sense that they know what they are taking about. Referral is a great way to help in this area but is not always possible. One test of prospective advisors honesty is to ask them for a quote for an "Executive Pension" - assuming your premium amount and retirement age. An executive pension is a one person company pension and does not have to disclose commission. Then ask them how much they are being paid by the provider of that Executive Pension. You then ask MyAdviser.ie to check it for free. You just complete the online form or email us the quote and we will tell you within 24 hours exactly how much you are being charged - no strings attached. If there is a gap with what they told you them you know that their honesty is questionable - if they lie re a small test then would you be willing to invest your trust with them? 

If you didn't want to use us you could instead ask the same broker for a Personal Pension from the same provider for the same term and amount. You would need to do this after the Executive one as Personal Pensions must disclose commission. The details must be the same and most providers have exactly the same options re charges for Executive or Personal Pensions - so the outcome should be the same re your projected fund and charges. 

As I write this I feel it is very complicated for a typical client to do - it can be tricky. It is easy for a professional advisor as this is our business. Maybe it is a bit like a mechanic - how do you know they are doing a good job? Is that new part that costs 300 euro really necessary? You just don't know.

At least one positive re financial services is that regulations that are there can tell you what you are paying for advice - you may need a little help to understand where to look but it can be done. The amount of money involved in say a pension makes it worth spending the time to learn and this forum is a good step in that direction. 

A professional transparent advisor can do all this work for you but before you invest your money you need to invest your trust. How do you know they are delivering comparative value for the service provided? Fee based or commission based is not actually a deciding factor. Know what is being paid for the advice is key - as is the overall cost of the solution. This will help avoid bias towards one plan over another. Pre 2001 there was no commission disclosure so no one knew what was going on. Now you know much more - you just need to be able to navigate the standard documents and know what to look for. 

I am not sure if this forum has a section on "How to know what your adviser is being paid" but I would be happy to draft one covering the quotes/illustrations to look for and how to read them. This would include getting around the non-disclosure requirements with Executive Pensions. 
Hope this helps.

Michael


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## wbbs (22 Jul 2011)

By the way I didnt buy the bank shares during what would be considered a volatile period, had them quite a while and also I did not buy just bank shares.   To be fair they were considered a 'safer' bet than most.


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## MyAdviser (22 Jul 2011)

Wbbs, sorry for the assumption - there were a lot of people being advised to buy Bank shares when they looked like relative great value compared to history - €1 euro for BOI shares is not looking like great value now. The diversification point always stands and that includes asset diversification. Regards Michael


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## paperclip (11 Aug 2011)

I just rang http://www.investrcentre.com/

They recommended that I sign up online, 149EURO per year. 

They said it's full of info, and there's a blog where they answer your questions.

And then later, get 1 on 1 advice if I need it.

I'm inclined to just go for the 1 on 1 if I'm doing anything at all.... I just need to know what to do with a lump sum.

Has anyone any dealings with them?


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## mercman (11 Aug 2011)

Personally haven't used them, (yet), but they do hold a good name in the industry, which is alot more than can be said for a number of the very large institutions who simply want you to feed them with money rather than a positive performance.


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## Sumatra (16 Aug 2011)

Why would you pick just one name from the list? 

Unfortunately at present we don't have independent intermediaries here who act as the agent of the client.


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## Marc (10 Sep 2011)

Sumatra makes an excellent point. In Ireland in common with many jurisdictions around the world advisers are only required to exercise a suitability standard of care.

This means that recommendations must be suitable for the client. It doesn't mean that an adviser must select the lowest cost option for example.

Conflicts of interest such as commission payments are disclosed but not fully understood by many prospective investors and few advisers operate on a fee only basis as an agent of the client. Furthermore the Central Bank does not currently differentiate between advisers on the basis of their remuneration method.

Investors looking for an adviser who puts their client's interests above their own must seek out an adviser who operates under a voluntary fiduciary standard.

[broken link removed]


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## mercman (11 Sep 2011)

Marc said:


> Conflicts of interest such as commission payments are disclosed but not fully understood by many prospective investors and few advisers operate on a fee only basis as an agent of the client. .
> 
> Investors looking for an adviser who puts their client's interests above their own must seek out an adviser who operates under a voluntary fiduciary



And do you really think that it is possible to find such a person in this country. Take it from me that any level of honesty operating in the Irish market simply does not exist -- and that is from the bottom level to the top. In fact I'd say that one may have a better chance dealing with some of the smaller entities than the larger ones.

On the basis of the name AAM, there really should be a thread if not a complete section where persons can place their past happenings in writing to give the public a display of the meaning Caveat Emptor.


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## Brendan Burgess (12 Sep 2011)

mercman said:


> And do you really think that it is possible to find such a person in this country. Take it from me that any level of honesty operating in the Irish market simply does not exist -- and that is from the bottom level to the top. .



Hi Mercman

I am disappointed with the standards of advice and integrity in almost all professions in this country.

But to go from that to "there is no such thing as a competent and honest advisor" is simply wrong.

There are honest advisors who act in the clients' interests.
There are competent advisors who give good advice.

There aren't many, but there are some.

Brendan


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## Bronte (12 Sep 2011)

Brendan Burgess said:


> There are honest advisors who act in the clients' interests.
> There are competent advisors who give good advice.
> 
> There aren't many, but there are some.


 
But the problem is they are so hard to find.  Why is that?  Why does the industry have such a bad reputation.


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## Rory Gillen (13 Oct 2011)

Fee-based advice is a rarity and it is a shame. Commission-based selling is all there is outside accountancy practices. If you are a subscriber to my website www.investrcentre.com then you can avail of my own fee-based advisory service. The webite sub is currently €149 per annum. The one-to-one advisory service costs €399. Both include VAT. Enquiries to info@investrcentre.com 



*Rory Gillen, Founder*


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## Marc (17 Nov 2012)

Slight generalisation there Rory. I for one have been operating as a fee-only adviser in Ireland since 2008.

For an initial second opinion meeting  at my expense please feel free to contact me directly.


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## mercman (17 Nov 2012)

Bronte said:


> Why does the industry have such a bad reputation.



I have only revisited this thread today. I think I might be able to answer this. The reason is quite simple. The Financial Providers are simply unable to accept this and their agents have made vast and massive mistakes.

One reputable international company operating in this country took on new senior staff. They believed what they were told and the person concerned received an accredited managerial position. However the fact that their (person concerned) Financial licence was revoked because of serious breaches of the Consumer Code and the law, and the person concerned has found a loophole in the law. The International company knew nothing about this and they (person concerned) are allowed to continue bluffing the public, the Regulator and the Central Bank.

I know of a number of these cases and in cases the persons concerned are back selling the same Financial products which they were selling prior to their dismissal. 

So somebody tell me why are these persons allow to act in the manner they did ? Get their hands slapped and start again in another guise.

Answers please as I would really love to know why and how can they or should they ???


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## Rory Gillen (19 Nov 2012)

onekeano said:


> A friend of mine is taking a voluntary redundancy package - I think they are mad as they have no job lined up but the reasons are quite complex so cest la vie!
> 
> The amount involved is c.€75k and they have spoken to their bank who needless to say have a very good deposit rate lined up for when the cash comes through
> 
> ...


 
If you are a member of GillenMarkets.com you have the option to see myself for one-to-one advice. I am fee-based. You can email info@gillenmarkets.com regarding costs.

I understand one is not supposed to market on this website but a direct question requires a direct answer.

*Rory Gillen
*


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