R
rainyday
Guest
BarryH
All I would like some investment advice for a sum of €30,000
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I have recently retired and have some spare cash, approx €30,000 which I would like to invest. I have already signed up for the SSIA so would like other investment suggestions. Ideally, I would like a continual flow of income rather than investing in something which will tie up my cash longer term (say 5-10 years). Can anybody advise me what to do? Thanks
MyAdviser
Investing for an Income
--------------------------------------------------------------------------------
BarryH, one suggestion would be to invest your money in a with profits bond and set it up to withdraw the bonuses each year (4%-5% net return). The underlying investment is typically in a diversified fund containing mainly equities but also gilts, cash and in some cases property.
The advantage over direct investment in such assets is that the with-profits funds are designed to smooth out the year on year returns thus making them less volatile.
The advantage over investing in guaranteed products like deposits is the potential for a reasonable income and the possibility over say 10 years of additional bonus on your capital.
The disadvantage is that you don't know for sure what the income rate will be until the start of each year. This type of investment would be cautious but may suit your needs.
Whatever you do give yourself a boost by buying your investment after checking out all the alternative providers some are more expensive than others and get discount on the entry charges.
Hope this helps.
Regards Michael
www.myadviser.ie
Mithrandir
Oh oh
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Listen, Michael, this raises hackles every time its raised, and I don't necessarily agree with it, but the Regulator insists that financial advice may not be given by any intermediary without first 'knowing the client', i.e. fact find. This I've learned long time back includes ones website, hence web based advice is also covered.
The above exchange is just the type of thing the Central Bank is looking for. The advice they will point out is given without any knowledge of the consumers overall financial strength, targets, aspirations, and risk tolerance. You've advised With Profit investment in a vacuum, they will argue. Please, please don't take my word for it, check it out yourself.
The CB guidelines are adding to the cost of advice clearly, in an effort to impose an advisory process standard. The result is that websites from commercial operations cannot give recommendations. The technology to automate financial planning leading to web site advice is still raw. Sorry for the bad news. Barryh needs to be first quizzed on his position, age, and all that kind of stuff.
Hawkwing
Baloney
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MyAdviser was not giving investment advice other than the recommendation to shop around and get best discounts. Surely the CB is not going to clamp him in irons for that!
The rest of the post was merely describing a certain product and contained no advice element; it’s up to BarryH what to make of it.
That fact that the description omitted to point out that these products are seriously underwater at the present time is a more serious regulatory breach, not of the CB intermediary framework, but of the Trade Descriptions Act (if we have such a thing here). However, MyAdviser would have the defence that the product providers do not reveal this information in the first place.
Mithrandir
Advice
--------------------------------------------------------------------------------
Sorry Hawkwing but the above constitutes advice. I've openly and publicly debated on this matter from the same platform as the Central Bank, and that's my opinion based on that experience.
There are two things, Advice & Information. The above is advice. Barryh, sought advice on income generation, My Advisor, advised With Profits. No talk of Deposits, Corporate Bond Funds, European Government bond funds, other smoothened funds etc. Just With profit, hence it’s a straight sector recommendation.
Hawkwing, a word of advice - learn the difference between giving information and giving advice under the IIA. Better to learn it right, than to learn it during a CB audit.
Liam D Ferguson
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Surely giving an opinion to an anonymous poster on a public access website such as this would not be deemed "advice" in the same way as sitting down with a client in a professional capacity? I know Brendan Burgess has sought clarification from the CB about the regulation of AAM and while I don't know what the response was, I'm sure that if the CB had told Brendan to stop any area of AAM, he would have moved swiftly.
Mithrandir
AAM and Advisors
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The IIA is light on AAM, it appears to shade the exemption as a publication, so Brendan is fine. But firms like you, and MyAdvisor who, are not anonymous and are acting commercially, i.e. self promoting and who are regulated entities under the IIA are an entirely different matter. The IIA requires the CB to ensure that all advice produced by regulated firms complies with it.
It doesn't matter if you're giving the advice 'free' on AAM or 'free' on the street, at the office etc. It still is giving advice. The lack of response to AAM may indicate that the CB ain't too concerned, or it may simply be that it hasn't decided to act on AAM yet. As for getting as definitive position in writing from the CB on AAM, I'd say forget it. The CB prefers to act stealthily, quietly and confidentially. If any regulated firm provides advice without fulfilling the requirement to know your client, i.e. fact find, the firm leaves itself exposed to the CB.
AAM contributors that are not anonymous will be regarded as acting as an extension of their business activities on AAM. Hence published advice like that above is just the same as advice on file at the office. There is no difference.
NotMyAdviser
CB
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He's an unregistered user. How could the CB prove that the advice actually came from MyAdviser or Michael in this instance.
Mithrandir
Good Point
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You've raised an interesting point about evidence. I'm stumped, gotta admit. But the IIA is very clear on the issue raised. Since my last post I've treble checked and the position is clear, firms who use AAM openly are engaging in advertising and giving advice and the CB rules on the advice process apply.
MyAdviser
Advice - Get the Facts before
--------------------------------------------------------------------------------
Mithrandir, you seem very concerned that Central Bank rules and the IIA are implemented and I commend you on that. I agree that all advisors on AAM should be careful about the difference between advice and information. That said, I don’t agree with your interpretation of that difference. The CB and IIA rules must be implemented and both Liam and I are clearly doing so. To suggest anything else is wrong.
After a conversation with the CB this morning they seem happy that the provision of general information about product types/groups/sectors (I used this particular with profits example) is OK once a particular product is not recommended. In this example there are other investment types that could suit BarryH’s needs and thank you for mentioning some of them.
All I was doing was making one suggestion that he could consider not a product recommendation. I think the idea that an advisor cannot speak to a person about general issues on investment, protection or pension, without meeting the full fact find, terms of business etc is of no benefit to consumers. And the regulations would seem to back that up.
Where a person asks specific questions about a particular product, then these can be clarified by an advisor once no opinion or recommendation is given about the suitability of that specific product.
The IIA, under the definition of Advice (page 7 & , specifically excludes from its definition
“advice given in a newspaper, journal, magazine or other publication, including electronic publications, where the principal purpose of the publication taken as a whole is not to lead persons to invest in any particular investment instrument or deposit or to deal with any particular provider of investment business services.”
I am happy to register on AAM and will do so straight away because any inference that I am using that to hind behind is misplaced. I am though concerned that Mithrandir is in some way involved in speaking on the topic of what is and is not advice – clearly you need to get your facts straight before your next engagement. The medium by which advice is given is irrelevant, the key issue is - has advice been given. Quite clearly the rules allow AAM to continue and professionals like myself and Liam are free to help people as best we can to be aware of their options.
I hope this clarifies the point but if not maybe this issue can be taken out of this area and continued elsewhere.
BarryH, there are other options to generate an income including direct investment in equities and take the dividend or buy into a high dividend fund which does the same thing (pretty much) but allows smaller investors access to a much wider spread of equities. Both of these options will deliver an income but the income will fluctuate and your capital is not guaranteed. Best of luck with your investment.
Regards Michael
myadviser.ie
NotMyAdviser
Advice
--------------------------------------------------------------------------------
Hi Michael,
Just to be clear, I wasn't suggesting for a minute you were unregistered for any ulterior motive. I simply asked, given that that was your status, how the CB (if it wanted to) could categorically attribute the offending "advice" to you.
In fact I agree with the line taken by both yourself and Liam. I see little or nothing on either of the threads to which Mithrandir has taken exception (i.e. got on the high horse about) that would constitute "advice".
Mithrandir
CB Give Conflicting Information
--------------------------------------------------------------------------------
Listen I'm not on any high horse. The first time I raised this, and related issues in December 2000, as a projection on how the CB would apply the IIA in 2001, it caused consternation. But the predictions were proved correct, particularly on the S10 vs. Restricted demarcation. I didn't do so to prevent anybody doing their thing.
Instead I had pre-knowledge for the very simple reason that I too argued the position unsuccessfully in 97' and was forced to seek a Section 10 authorisation. What's disturbing about your post is that giving advice has been perceived by you as being linked to a product selection. That's the very ground upon which I lost the argument. See it isn't.
You gave a recommendation. That's advice. If it wasn't you could provide a generic estimate of the current value of, say, pensions held at different IRR% into the future, and even estimate potential income drawdowns, and say, Hey I didn't recommend a product. You could tell a consumer to but geared property funds instead of large stock European trackers, and say Hey I didn't recommend a specific product. That's bollox of course, because advice under the IIA has been given nonetheless.
Much depends on who one speaks to at the CB, how you word your question, and if their prepared to put the opinion in writing it seems. But the reply you've given is directly opposite, not to replies I've got, but direct action by the Bank.
MyAdviser
Re: CB Give Conflicting Information
--------------------------------------------------------------------------------
Mithrandir, you are wrong and your continued tone and lack of desire to stick to the written word of the IIA never mind its intent is a disservice to this forum and to the consumers who derive value from it.
That said, I would be happy to continue this discussion on a separate thread so that those who are interested can contribute. If any of the moderators are following this would it be possible to open a separate thread?
NotMyAdviser, no offence taken - I just wanted to make sure my actions could not be misunderstood.
Regards Michael
www.myadviser.ie
Mithrandir
No Problem
--------------------------------------------------------------------------------
Myadvisor, I actually wish I was wrong, but as recently as this week I spoke to very senior CB sources, and had the issue reconfirmed. I've no problem in fleshing the issue further, but please, only where we stick to the substantive issue.
(Your last post implies an unacceptable motive to my comments, and suggests its anti-consumer behaviour, clothes I think that hardly fit. So please let’s try to help each other understand the position?)
All I would like some investment advice for a sum of €30,000
--------------------------------------------------------------------------------
I have recently retired and have some spare cash, approx €30,000 which I would like to invest. I have already signed up for the SSIA so would like other investment suggestions. Ideally, I would like a continual flow of income rather than investing in something which will tie up my cash longer term (say 5-10 years). Can anybody advise me what to do? Thanks
MyAdviser
Investing for an Income
--------------------------------------------------------------------------------
BarryH, one suggestion would be to invest your money in a with profits bond and set it up to withdraw the bonuses each year (4%-5% net return). The underlying investment is typically in a diversified fund containing mainly equities but also gilts, cash and in some cases property.
The advantage over direct investment in such assets is that the with-profits funds are designed to smooth out the year on year returns thus making them less volatile.
The advantage over investing in guaranteed products like deposits is the potential for a reasonable income and the possibility over say 10 years of additional bonus on your capital.
The disadvantage is that you don't know for sure what the income rate will be until the start of each year. This type of investment would be cautious but may suit your needs.
Whatever you do give yourself a boost by buying your investment after checking out all the alternative providers some are more expensive than others and get discount on the entry charges.
Hope this helps.
Regards Michael
www.myadviser.ie
Mithrandir
Oh oh
--------------------------------------------------------------------------------
Listen, Michael, this raises hackles every time its raised, and I don't necessarily agree with it, but the Regulator insists that financial advice may not be given by any intermediary without first 'knowing the client', i.e. fact find. This I've learned long time back includes ones website, hence web based advice is also covered.
The above exchange is just the type of thing the Central Bank is looking for. The advice they will point out is given without any knowledge of the consumers overall financial strength, targets, aspirations, and risk tolerance. You've advised With Profit investment in a vacuum, they will argue. Please, please don't take my word for it, check it out yourself.
The CB guidelines are adding to the cost of advice clearly, in an effort to impose an advisory process standard. The result is that websites from commercial operations cannot give recommendations. The technology to automate financial planning leading to web site advice is still raw. Sorry for the bad news. Barryh needs to be first quizzed on his position, age, and all that kind of stuff.
Hawkwing
Baloney
--------------------------------------------------------------------------------
MyAdviser was not giving investment advice other than the recommendation to shop around and get best discounts. Surely the CB is not going to clamp him in irons for that!
The rest of the post was merely describing a certain product and contained no advice element; it’s up to BarryH what to make of it.
That fact that the description omitted to point out that these products are seriously underwater at the present time is a more serious regulatory breach, not of the CB intermediary framework, but of the Trade Descriptions Act (if we have such a thing here). However, MyAdviser would have the defence that the product providers do not reveal this information in the first place.
Mithrandir
Advice
--------------------------------------------------------------------------------
Sorry Hawkwing but the above constitutes advice. I've openly and publicly debated on this matter from the same platform as the Central Bank, and that's my opinion based on that experience.
There are two things, Advice & Information. The above is advice. Barryh, sought advice on income generation, My Advisor, advised With Profits. No talk of Deposits, Corporate Bond Funds, European Government bond funds, other smoothened funds etc. Just With profit, hence it’s a straight sector recommendation.
Hawkwing, a word of advice - learn the difference between giving information and giving advice under the IIA. Better to learn it right, than to learn it during a CB audit.
Liam D Ferguson
--------------------------------------------------------------------------------
Surely giving an opinion to an anonymous poster on a public access website such as this would not be deemed "advice" in the same way as sitting down with a client in a professional capacity? I know Brendan Burgess has sought clarification from the CB about the regulation of AAM and while I don't know what the response was, I'm sure that if the CB had told Brendan to stop any area of AAM, he would have moved swiftly.
Mithrandir
AAM and Advisors
--------------------------------------------------------------------------------
The IIA is light on AAM, it appears to shade the exemption as a publication, so Brendan is fine. But firms like you, and MyAdvisor who, are not anonymous and are acting commercially, i.e. self promoting and who are regulated entities under the IIA are an entirely different matter. The IIA requires the CB to ensure that all advice produced by regulated firms complies with it.
It doesn't matter if you're giving the advice 'free' on AAM or 'free' on the street, at the office etc. It still is giving advice. The lack of response to AAM may indicate that the CB ain't too concerned, or it may simply be that it hasn't decided to act on AAM yet. As for getting as definitive position in writing from the CB on AAM, I'd say forget it. The CB prefers to act stealthily, quietly and confidentially. If any regulated firm provides advice without fulfilling the requirement to know your client, i.e. fact find, the firm leaves itself exposed to the CB.
AAM contributors that are not anonymous will be regarded as acting as an extension of their business activities on AAM. Hence published advice like that above is just the same as advice on file at the office. There is no difference.
NotMyAdviser
CB
--------------------------------------------------------------------------------
He's an unregistered user. How could the CB prove that the advice actually came from MyAdviser or Michael in this instance.
Mithrandir
Good Point
--------------------------------------------------------------------------------
You've raised an interesting point about evidence. I'm stumped, gotta admit. But the IIA is very clear on the issue raised. Since my last post I've treble checked and the position is clear, firms who use AAM openly are engaging in advertising and giving advice and the CB rules on the advice process apply.
MyAdviser
Advice - Get the Facts before
--------------------------------------------------------------------------------
Mithrandir, you seem very concerned that Central Bank rules and the IIA are implemented and I commend you on that. I agree that all advisors on AAM should be careful about the difference between advice and information. That said, I don’t agree with your interpretation of that difference. The CB and IIA rules must be implemented and both Liam and I are clearly doing so. To suggest anything else is wrong.
After a conversation with the CB this morning they seem happy that the provision of general information about product types/groups/sectors (I used this particular with profits example) is OK once a particular product is not recommended. In this example there are other investment types that could suit BarryH’s needs and thank you for mentioning some of them.
All I was doing was making one suggestion that he could consider not a product recommendation. I think the idea that an advisor cannot speak to a person about general issues on investment, protection or pension, without meeting the full fact find, terms of business etc is of no benefit to consumers. And the regulations would seem to back that up.
Where a person asks specific questions about a particular product, then these can be clarified by an advisor once no opinion or recommendation is given about the suitability of that specific product.
The IIA, under the definition of Advice (page 7 & , specifically excludes from its definition
“advice given in a newspaper, journal, magazine or other publication, including electronic publications, where the principal purpose of the publication taken as a whole is not to lead persons to invest in any particular investment instrument or deposit or to deal with any particular provider of investment business services.”
I am happy to register on AAM and will do so straight away because any inference that I am using that to hind behind is misplaced. I am though concerned that Mithrandir is in some way involved in speaking on the topic of what is and is not advice – clearly you need to get your facts straight before your next engagement. The medium by which advice is given is irrelevant, the key issue is - has advice been given. Quite clearly the rules allow AAM to continue and professionals like myself and Liam are free to help people as best we can to be aware of their options.
I hope this clarifies the point but if not maybe this issue can be taken out of this area and continued elsewhere.
BarryH, there are other options to generate an income including direct investment in equities and take the dividend or buy into a high dividend fund which does the same thing (pretty much) but allows smaller investors access to a much wider spread of equities. Both of these options will deliver an income but the income will fluctuate and your capital is not guaranteed. Best of luck with your investment.
Regards Michael
myadviser.ie
NotMyAdviser
Advice
--------------------------------------------------------------------------------
Hi Michael,
Just to be clear, I wasn't suggesting for a minute you were unregistered for any ulterior motive. I simply asked, given that that was your status, how the CB (if it wanted to) could categorically attribute the offending "advice" to you.
In fact I agree with the line taken by both yourself and Liam. I see little or nothing on either of the threads to which Mithrandir has taken exception (i.e. got on the high horse about) that would constitute "advice".
Mithrandir
CB Give Conflicting Information
--------------------------------------------------------------------------------
Listen I'm not on any high horse. The first time I raised this, and related issues in December 2000, as a projection on how the CB would apply the IIA in 2001, it caused consternation. But the predictions were proved correct, particularly on the S10 vs. Restricted demarcation. I didn't do so to prevent anybody doing their thing.
Instead I had pre-knowledge for the very simple reason that I too argued the position unsuccessfully in 97' and was forced to seek a Section 10 authorisation. What's disturbing about your post is that giving advice has been perceived by you as being linked to a product selection. That's the very ground upon which I lost the argument. See it isn't.
You gave a recommendation. That's advice. If it wasn't you could provide a generic estimate of the current value of, say, pensions held at different IRR% into the future, and even estimate potential income drawdowns, and say, Hey I didn't recommend a product. You could tell a consumer to but geared property funds instead of large stock European trackers, and say Hey I didn't recommend a specific product. That's bollox of course, because advice under the IIA has been given nonetheless.
Much depends on who one speaks to at the CB, how you word your question, and if their prepared to put the opinion in writing it seems. But the reply you've given is directly opposite, not to replies I've got, but direct action by the Bank.
MyAdviser
Re: CB Give Conflicting Information
--------------------------------------------------------------------------------
Mithrandir, you are wrong and your continued tone and lack of desire to stick to the written word of the IIA never mind its intent is a disservice to this forum and to the consumers who derive value from it.
That said, I would be happy to continue this discussion on a separate thread so that those who are interested can contribute. If any of the moderators are following this would it be possible to open a separate thread?
NotMyAdviser, no offence taken - I just wanted to make sure my actions could not be misunderstood.
Regards Michael
www.myadviser.ie
Mithrandir
No Problem
--------------------------------------------------------------------------------
Myadvisor, I actually wish I was wrong, but as recently as this week I spoke to very senior CB sources, and had the issue reconfirmed. I've no problem in fleshing the issue further, but please, only where we stick to the substantive issue.
(Your last post implies an unacceptable motive to my comments, and suggests its anti-consumer behaviour, clothes I think that hardly fit. So please let’s try to help each other understand the position?)
)