Why it’s time to upgrade from your IFA

Lee Goggin, Co-Founder of findaWEALTHMANAGER, explains why upgrading from an IFA to a leading wealth management institution is likely to represent the best choice for your money.

A wide range of High Net Worth Individuals come to us to find a wealth manager. Many are new to professional wealth management services, some are dissatisfied with a current provider and wish to look at alternatives, and others are looking to diversify their investments across several institutions. We also see a good proportion who are currently using an Independent Financial Advisor to take care of their investments and financial planning, and have come to believe it may be time for them to upgrade to a wealth management institution.

We always advise this latter group to think about whether their IFA can really deliver the performance and service they require at the lowest possible cost. You may have made a good start with an IFA, and many do a sterling job for their clients, but there is also every chance that your evolving needs mean you’ve outgrown this model of financial advice and a full-service wealth manager is the better choice for your money going forward.

Layered fees

What many IFA clients may not realise is that it is difficult for an IFA to compete with a wealth management institution since the majority already delegate the management of clients’ investments to a larger firm on what is known as a Discretionary Fund Manager basis. IFAs must then add their own advisory fees on top of this to arrive at a Total Expense Ratio often significantly higher than could be achieved by going direct to the underlying money manager.

You might find that you can reduce your annual fees by 1 percent or more by going direct rather than paying layered fees; larger firms are also often able to offer quite substantial discounts for larger portfolios. Over time, seemingly small differences in costs will compound to make a verylarge difference to your net gains

You might find that you can reduce your annual fees by 1 percent or more by going direct rather than paying layered fees; larger firms are also often able to offer quite substantial discounts for larger portfolios. Over time, seemingly small differences in costs will compound to make a very large difference to your net gains. Maximising returns and minimising fees simultaneously is the key to growing your wealth.

What to expect from wealth management fees gives invaluable guidance for new and existing clients looking to compare providers on cost.

Is the proximity premium worth paying?

You may really like the fact that your IFA lives close by, but bear in mind this might also mean fees that are very much higher than necessary. Ask yourself: Is this proximity premium really worth the drag it will prove on the long-term performance of my portfolio?

The leading wealth managers on our panel include firms which have extensive regional networks, those with offices in several key UK cities and those based solely in London. In all, we can offer coverage of 200 locations across the UK and we are likely to be able to introduce experts very close to where you live.

And, after all, you may need to travel a little way to access the very best expertise for your financial profile and needs, but this is no great sacrifice considering the stakes involved.

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Top Tip

People fear that changing wealth adviser will mean a lot of hassle and expense, but it’s actually a far quicker and smoother process than you might imagine. Institutions are adept at making transfers as easy as possible but read our Guide to changing wealth manager to get a fuller picture of the short steps involved.

Lee Goggin - Co-Founder

Lee Goggin

Co-Founder

Better “bench strength”

The value of the highest quality financial advice cannot be overestimated. Trust and longevity of relationships are invaluable, but arguably both have to be predicated on knowing you’re getting access to real expertise. Your adviser is not supposed to be your friend.

A full-service wealth manager will be able to field the full complement of investment management and financial planning professionals required to tackle even very complex issues, providing the kind of one-stop-shop solution our busy users are increasingly looking for

I’d argue it can be difficult for individual advisers to be absolutely expert in every area affluent clients may need guidance in. In contrast, a full-service wealth manager will be able to field the full complement of investment management and financial planning professionals required to tackle even very complex issues, providing the kind of one-stop-shop solution our busy users are increasingly looking for.

Broader benefits

Alongside far greater expertise generally being on offer, I also like to point out the broader benefits that come from upgrading from an IFA to a full-service wealth manager.

You will still have personal relationships with dedicated advisers, but you will also have so much more besides with the backing of a firm dedicated to private client wealth management. This includes the softer side of things, such as educational events and hospitality, but more importantly access to a wider range of products and services.

Even the “simplest” of clients could generally do with some sophisticated tax advice, particularly around mitigating Inheritance tax

As your wealth management needs evolve you may need a Lombard loan, private client mortgage or other credit line; the establishment of a Family Investment Company, or help from a firm equally comfortable handling a complex business sale as managing a SIPP. Even the “simplest” of clients could generally do with some sophisticated tax advice, particularly around mitigating Inheritance tax. Can you get all of this from a one-man-band, or even a small practice?

Upgrade how your money is managed

If you feel like a wealth management upgrade is in order, you can explore what leading wealth managers can offer you in no time at all, and at no cost.

Simply tell us a few details and our smart matching tool will select a shortlist of three best-matched wealth managers for you to compare. Our shortlist will represent firms which are all a good factual match, so you can see which institution and adviser feels right for you.

You owe it to yourself to get the best performance, fees and service standards for your money. Make sure you are by comparing providers today.

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