The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[muppet]

There's nothing to stop anybody speaking to an adviser about their pension pot within a group plan. If you have a significant period of time to retirement there is generally no need to panic if your fund falls, just wait for the markets to recover.  If you are about to retire it is a very different matter, that's why you should not be in equity based investments, which was my original point.

Do these financial advisers give free advice or are they another leech sucking more blood from your pension pot? Are you an adviser and if so did you see the crash coming

This is the attitude that I was getting at in my original post. The guys on the bar stools won't pay an adviser a couple of hundred quid and moan as their pension pot loses thousands. Sensible stuff.

How much would it have been worth to have an advisor worth his salt the night of the Lenihan/Cowan Bank Guarantee?

No adviser would have known and you know it. As I've said earlier if you have 10 + years to retirement then you would have recouped their losses from that time already if they had the foresight to sit tight. Those who were on the cusp of retirement at the time should not have been exposed to the risk.  Good advisers wouldn't have known what was round the corner ( to think otherwise is stupid), where the adviser earned his/her corn would have been to have taken the client away from exposure to such risk.

I think you misunderstood me.

It is easy to call advisors a waste of money and to dismiss using them. But that is too simplistic. If, obviously with hindsight, we could go back and put an advisor worth his salt in that room with Lenin & Cowan, how much would it have been worth to us?

[mikehunt]

Saving for the future is a good idea obviously so I have nothing against them in theory. However the last person that will benefit will be the contributors. There are numerous parties involved and all want their fees. I include solicitors, brokers,trustees, inv managers, auditors, regulators. Some fees are mandatory, others like financial advisers are optional.

If profits are made then mgr takes a percentage of this and this can be a hefty cut. However losses are not penalised. Fixed fees are still in place. The risks far outweigh the potential benefits imo. While it is important to encourage performance there should be penalties for poor performance. There is nothing to stop reckless speculating.

It is tax efficient but that is govt policy and nothing to do with the parties involved. What Irish Life done recently where people have been told their pension is worthless and demanding massive reinvestment has been kept unsurprisingly quiet.

[mackers]

I think you misunderstand my point also. A financial adviser would not have been worth a cold penny to you that night, I never said he would. My point has been fairly consistent all along. A 40 year old in 2008 would have been better invested in equities that night as he has already regained the losses experienced in the subsequent period. The majority of stock markets are now at higher levels than they were in 2008. A 65 year old in 2008 would have been a lot worse off if he was invested in equities at that point. He could not wait for markets to recover the way a 40 year old could. The 65 year old should not have been in equities, no matter what the stock market conditions.
A good financial adviser would not have had a 65 year old invested in equities that night, he should have had that client out of equities from his 60th birthday onwards.

[mikehunt]

There's nothing to stop anybody speaking to an adviser about their pension pot within a group plan. If you have a significant period of time to retirement there is generally no need to panic if your fund falls, just wait for the markets to recover.  If you are about to retire it is a very different matter, that's why you should not be in equity based investments, which was my original point.

Do these financial advisers give free advice or are they another leech sucking more blood from your pension pot? Are you an adviser and if so did you see the crash coming

This is the attitude that I was getting at in my original post. The guys on the bar stools won't pay an adviser a couple of hundred quid and moan as their pension pot loses thousands. Sensible stuff.

That's too simplistic.  In that case if everyone had a good financial adviser then all would be ok or at worst losses would be minimised. I didn't hear many advisers seeing the crash coming. All I remember is how bank shares were a must in any portfolio as they were only going one way.

[TabClear]

Saving for the future is a good idea obviously so I have nothing against them in theory. However the last person that will benefit will be the contributors. There are numerous parties involved and all want their fees. I include solicitors, brokers,trustees, inv managers, auditors, regulators. Some fees are mandatory, others like financial advisers are optional.

If profits are made then mgr takes a percentage of this and this can be a hefty cut. However losses are not penalised. Fixed fees are still in place. The risks far outweigh the potential benefits imo. While it is important to encourage performance there should be penalties for poor performance. There is nothing to stop reckless speculating.

It is tax efficient but that is govt policy and nothing to do with the parties involved. What Irish Life done recently where people have been told their pension is worthless and demanding massive reinvestment has been kept unsurprisingly quiet.

Don't disagree with you about the one sided nature of the  fee structure. The reality is though that if you choose to invest your money on your own there is nothing to stop you doing that? No fund management fees involved?

[Hound]

There's nothing to stop anybody speaking to an adviser about their pension pot within a group plan. If you have a significant period of time to retirement there is generally no need to panic if your fund falls, just wait for the markets to recover.  If you are about to retire it is a very different matter, that's why you should not be in equity based investments, which was my original point.

Do these financial advisers give free advice or are they another leech sucking more blood from your pension pot? Are you an adviser and if so did you see the crash coming

This is the attitude that I was getting at in my original post. The guys on the bar stools won't pay an adviser a couple of hundred quid and moan as their pension pot loses thousands. Sensible stuff.

How much would it have been worth to have an advisor worth his salt the night of the Lenihan/Cowan Bank Guarantee?

No adviser would have known and you know it. As I've said earlier if you have 10 + years to retirement then you would have recouped their losses from that time already if they had the foresight to sit tight. Those who were on the cusp of retirement at the time should not have been exposed to the risk.  Good advisers wouldn't have known what was round the corner ( to think otherwise is stupid), where the adviser earned his/her corn would have been to have taken the client away from exposure to such risk.

I think you misunderstood me.

It is easy to call advisors a waste of money and to dismiss using them. But that is too simplistic. If, obviously with hindsight, we could go back and put an advisor worth his salt in that room with Lenin & Cowan, how much would it have been worth to us?

There were paid advisors giving advice to Lenihan and Cowen, Merrill Lynch, but they were ignored.

Merrill Lynch (who have got a lot wrong in advising the govt, including the eircom share price!) advised that the guarantee was needed but that it should only be in respect of deposits.

BOI and AIB clubbed together and advised  the guarantee should cover all deposits and bonds, but that Anglo and Nationwide should be excluded and let fail.

Anglo told them everything was grand and it would all blow over.

So Lenihan and Cowen decided to guarantee the whole shooting match. There was a huge amount of mistakes and incompetence in the years leading up to that night, but it was those two who made the biggest error in the history of the state that night.

[mikehunt]

Saving for the future is a good idea obviously so I have nothing against them in theory. However the last person that will benefit will be the contributors. There are numerous parties involved and all want their fees. I include solicitors, brokers,trustees, inv managers, auditors, regulators. Some fees are mandatory, others like financial advisers are optional.

If profits are made then mgr takes a percentage of this and this can be a hefty cut. However losses are not penalised. Fixed fees are still in place. The risks far outweigh the potential benefits imo. While it is important to encourage performance there should be penalties for poor performance. There is nothing to stop reckless speculating.

It is tax efficient but that is govt policy and nothing to do with the parties involved. What Irish Life done recently where people have been told their pension is worthless and demanding massive reinvestment has been kept unsurprisingly quiet.

Don't disagree with you about the one sided nature of the  fee structure. The reality is though that if you choose to invest your money on your own there is nothing to stop you doing that? No fund management fees involved?

If I were investing money I would invest in a simple low risk govt bond or an ord post office savings scheme. Obviously if you want a higher rate then go for a more risky investment but surely the idea is to save for the future so should not be invested in high risk stuff like equity anyway.  That's my simplistic thinking on it. 

[muppet]

There's nothing to stop anybody speaking to an adviser about their pension pot within a group plan. If you have a significant period of time to retirement there is generally no need to panic if your fund falls, just wait for the markets to recover.  If you are about to retire it is a very different matter, that's why you should not be in equity based investments, which was my original point.

Do these financial advisers give free advice or are they another leech sucking more blood from your pension pot? Are you an adviser and if so did you see the crash coming

This is the attitude that I was getting at in my original post. The guys on the bar stools won't pay an adviser a couple of hundred quid and moan as their pension pot loses thousands. Sensible stuff.

How much would it have been worth to have an advisor worth his salt the night of the Lenihan/Cowan Bank Guarantee?

No adviser would have known and you know it. As I've said earlier if you have 10 + years to retirement then you would have recouped their losses from that time already if they had the foresight to sit tight. Those who were on the cusp of retirement at the time should not have been exposed to the risk.  Good advisers wouldn't have known what was round the corner ( to think otherwise is stupid), where the adviser earned his/her corn would have been to have taken the client away from exposure to such risk.

I think you misunderstood me.

It is easy to call advisors a waste of money and to dismiss using them. But that is too simplistic. If, obviously with hindsight, we could go back and put an advisor worth his salt in that room with Lenin & Cowan, how much would it have been worth to us?

There were paid advisors giving advice to Lenihan and Cowen, Merrill Lynch, but they were ignored.

Merrill Lynch (who have got a lot wrong in advising the govt, including the eircom share price!) advised that the guarantee was needed but that it should only be in respect of deposits.

BOI and AIB clubbed together and advised  the guarantee should cover all deposits and bonds, but that Anglo and Nationwide should be excluded and let fail.

Anglo told them everything was grand and it would all blow over.

So Lenihan and Cowen decided to guarantee the whole shooting match. There was a huge amount of mistakes and incompetence in the years leading up to that night, but it was those two who made the biggest error in the history of the state that night.

Actually, I was aware of that. They ignored the guy from Merrill Lynch didn't they? He then released a statement disassociating himself from the guarantee or something afterwards.

Here is some of the story: http://www.rte.ie/news/2010/0716/133404-banks/

Our problem is that at the end of that night, Lenihan (my predictive text corrects this to Lenin!) & Cowan were the last two in the room when the decision was made. I'd still argue we would have been far better off if we could have forced a heavyweight who knew his stuff on the two clowns. Instead the two took it upon themselves.

[TabClear]

Saving for the future is a good idea obviously so I have nothing against them in theory. However the last person that will benefit will be the contributors. There are numerous parties involved and all want their fees. I include solicitors, brokers,trustees, inv managers, auditors, regulators. Some fees are mandatory, others like financial advisers are optional.

If profits are made then mgr takes a percentage of this and this can be a hefty cut. However losses are not penalised. Fixed fees are still in place. The risks far outweigh the potential benefits imo. While it is important to encourage performance there should be penalties for poor performance. There is nothing to stop reckless speculating.

It is tax efficient but that is govt policy and nothing to do with the parties involved. What Irish Life done recently where people have been told their pension is worthless and demanding massive reinvestment has been kept unsurprisingly quiet.

Don't disagree with you about the one sided nature of the  fee structure. The reality is though that if you choose to invest your money on your own there is nothing to stop you doing that? No fund management fees involved?

If I were investing money I would invest in a simple low risk govt bond or an ord post office savings scheme. Obviously if you want a higher rate then go for a more risky investment but surely the idea is to save for the future so should not be invested in high risk stuff like equity anyway.   That's my simplistic thinking on it.

And thats your risk profile, you would be classed as risk averse, i.e. willing to accept a lower income when you are retired on the basis that it is more certain. Nothing wrong with that, but the statistics would show that on average longterm you would be better investing in equities. The "on average" is the key, you could be unlucky and need to buy an annuity when the market crashes. (however, as Mackers has said, a good adviser will have rebalanced your portfolio into low risk products by then.)

I do think however it is unfair to classify advisers as "leeches" because they are facilitating people who dont share your mindset and who are willing to take more risk in the hope of a bigger pay off. Your strategy is straightforward, as you say stick it into goverment bonds. You can do that yourself and just leave it until maturity and dont need a 3rd party manager. If you are in equities you do need to be aware and take actions based on market trends that affect your portfolio, hence the fees to get someone else to do this for you. By definition these advisers are dealing with the riskier side of things and that is why you hear the horror stories.

What I am in complete agreement with you on is with regard to the advisers who dont listen to thier clients wishes and invest in products completely wrong for the individual because it pays them greater fees. There are cowboys  in every trade however but that does not make them all like that.

[mackers]

What I am in complete agreement with you on is with regard to the advisers who dont listen to thier clients wishes and invest in products completely wrong for the individual because it pays them greater fees. There are cowboys  in every trade however but that does not make them all like that.

Agree completely on all that you have said except for the last paragraph.  The UK government (not sure about the South) have banned commission from all pension and investment products thereby alleviating any concerns that a client may have on why an adviser is telling them to take a certain product.  The adviser will be charging the same advice fee no matter what product is recommended and the charge is explicit.

[johnneycool]

What I am in complete agreement with you on is with regard to the advisers who dont listen to thier clients wishes and invest in products completely wrong for the individual because it pays them greater fees. There are cowboys  in every trade however but that does not make them all like that.

Agree completely on all that you have said except for the last paragraph.  The UK government (not sure about the South) have banned commission from all pension and investment products thereby alleviating any concerns that a client may have on why an adviser is telling them to take a certain product.  The adviser will be charging the same advice fee no matter what product is recommended and the charge is explicit.

Yeah, but in my experience these independent financial advisers try to get you on the bells and whistles, Life assurance, payment protection and what not.
You really need to be on your guard when dealing with financial advisers as they're all a shower of (unregulated!) shíte.

[mackers]

What I am in complete agreement with you on is with regard to the advisers who dont listen to thier clients wishes and invest in products completely wrong for the individual because it pays them greater fees. There are cowboys  in every trade however but that does not make them all like that.

Agree completely on all that you have said except for the last paragraph.  The UK government (not sure about the South) have banned commission from all pension and investment products thereby alleviating any concerns that a client may have on why an adviser is telling them to take a certain product.  The adviser will be charging the same advice fee no matter what product is recommended and the charge is explicit.

Yeah, but in my experience these independent financial advisers try to get you on the bells and whistles, Life assurance, payment protection and what not.
You really need to be on your guard when dealing with financial advisers as they're all a shower of (unregulated!) shíte.

I'm not going to waste half my day today by trying to correct unsubstantiated rants like I did yesterday.  The only comment I have to make on the above is that while you may think all advisers are sh1te as you put so eloquently, they are most definitely (heavily) regulated sh1te.

[CiKe]

Saving for the future is a good idea obviously so I have nothing against them in theory. However the last person that will benefit will be the contributors. There are numerous parties involved and all want their fees. I include solicitors, brokers,trustees, inv managers, auditors, regulators. Some fees are mandatory, others like financial advisers are optional.

If profits are made then mgr takes a percentage of this and this can be a hefty cut. However losses are not penalised. Fixed fees are still in place. The risks far outweigh the potential benefits imo. While it is important to encourage performance there should be penalties for poor performance. There is nothing to stop reckless speculating.

It is tax efficient but that is govt policy and nothing to do with the parties involved. What Irish Life done recently where people have been told their pension is worthless and demanding massive reinvestment has been kept unsurprisingly quiet.

On a mutual fund? Normally there is a fixed expense ratio. If you're talking about hedge fund 2% mgmt fee and then 20% carry fair enough but hedge fund investments not available in most (all?) pension plans.

[mikehunt]

What I am in complete agreement with you on is with regard to the advisers who dont listen to thier clients wishes and invest in products completely wrong for the individual because it pays them greater fees. There are cowboys  in every trade however but that does not make them all like that.

Agree completely on all that you have said except for the last paragraph.  The UK government (not sure about the South) have banned commission from all pension and investment products thereby alleviating any concerns that a client may have on why an adviser is telling them to take a certain product.  The adviser will be charging the same advice fee no matter what product is recommended and the charge is explicit.

Yeah, but in my experience these independent financial advisers try to get you on the bells and whistles, Life assurance, payment protection and what not.
You really need to be on your guard when dealing with financial advisers as they're all a shower of (unregulated!) shíte.

I'm not going to waste half my day today by trying to correct unsubstantiated rants like I did yesterday.  The only comment I have to make on the above is that while you may think all advisers are sh1te as you put so eloquently, they are most definitely (heavily) regulated sh1te.

How do your charge your clients?

i) a fixed rate 
ii) charge as a percentage of the investment or
iii) charge based on profits earned because of the advice you provided?

[mikehunt]

Saving for the future is a good idea obviously so I have nothing against them in theory. However the last person that will benefit will be the contributors. There are numerous parties involved and all want their fees. I include solicitors, brokers,trustees, inv managers, auditors, regulators. Some fees are mandatory, others like financial advisers are optional.

If profits are made then mgr takes a percentage of this and this can be a hefty cut. However losses are not penalised. Fixed fees are still in place. The risks far outweigh the potential benefits imo. While it is important to encourage performance there should be penalties for poor performance. There is nothing to stop reckless speculating.

It is tax efficient but that is govt policy and nothing to do with the parties involved. What Irish Life done recently where people have been told their pension is worthless and demanding massive reinvestment has been kept unsurprisingly quiet.

On a mutual fund? Normally there is a fixed expense ratio. If you're talking about hedge fund 2% mgmt fee and then 20% carry fair enough but hedge fund investments not available in most (all?) pension plans.

Don't know what percentage is charged but I'd imagine there's incentive to perform and they would take a cut of any profits, maybe not as much as a hedge fund but can't imagine it's just a fixed rate irrespective of performance. Plenty of pensions invest in hedge funds.