Paying for The Professionals

I generally try to avoid politics in this blog, but is it possible in Britain to talk about the NHS and private medicine without it being seen through a left or right wing prism? Years ago, in my twenties and at the start of my career, I caused a bit of a stir at work when I tried to find a way to opt out of BUPA when the company instituted it as part of our benefits package. Ah, the principles of youth! Suffice to say I didn’t follow it through, I stayed in the scheme, and had cause to thank my lucky stars I hadn’t opted out when I had to use the service a few years later. I still felt a bit guilty about it though, jumping queues because I was able to afford to.

I was lucky enough to have company funded private medicine for almost all of my working life, but it all stopped when I stopped working. I’ve seen and used the benefits of it, and it’s a pretty nice bonus when someone else is paying for the service for you and your family. Paying for it yourself though, that’s a different question, especially when there looks to be a free alternative that might be every bit as good.

Psychologically though, I wonder, because I did have to pay privately for dental root canal work last year, which cost the best part of a thousand quid. Previously I’d had this done on the NHS, but I still can’t shake the feeling – and it’s only a feeling, not a fact in any way shape or form – that the private dental treatment was, somehow, “better”. Perhaps this was to do with the peaceful ambience of the surgery compared to the busy chaos of my local dental practice. Perhaps it was because the dentist seemed nice and relaxed and took his time, ensuring I was always comfortable and informed about what he was doing. Perhaps it was because he used a lot nice shiny new equipment with laser beams and stuff. Perhaps, in other words, private dental treatment was a triumph of marketing over expertise?

Another instance where I think I paid over the odds for professional advice was when I retained an expensive lawyer over a potential dispute with a former employer. He charged me a small fortune and I didn’t learn much more than a good search of Google and forum advice wouldn’t have given me, but somehow I still think it was some of the best money I ever spent. Again though, the palatial offices, the lawyer’s fine suit, his good hair, his expensive watch, his Mont Blanc fountain pen, his erudite pontification on my situation (while the clock ran up the money), they all combined to give me the impression that this firm knew its stuff much better than anyone on the MSE forums. I followed his advice to the letter and felt it served me well.

Other financial bloggers have written about the glory that is Youtube videos which show you how to repair stuff. I’d admit they’re fantastic too and have saved me a pretty penny, but I look at the kitchen tap I fitted versus the ones properly fitted by professionals and I wonder when, not if, it’s going to start dripping? And is it on slightly squint? I just can’t say that my repairs give me the peace of mind that paying for a tradesman, with the experience and knowledge of his years, lends to his work.

I’ve never needed the services of a good accountant, but people tell me they can be worth their weight in gold. In fact, they tell me that even if I think I don’t need one it only shows how much I do, because I’m clearly ignorant of tax affairs. I must admit I’m kind of tempted by this advice because, no matter how much I Google, I can’t get my head around such simple tax subjects as ensuring you’re claiming back the right amount of higher rate tax relief on your pension. I have the gnawing doubt that a thousand pounds spent on a decent accountant might pay me back ten fold in years to come.

But, there’s one area where I think the fees will never justify the advice, and that’s when it comes to Fund Management. Give me low cost trackers every time. They can brand it all they want, elevate their star performers to the level of top footballers, write pages of high fallutin’ analysis in glossy reports and tell you “Here’s what you could have won”, if only you’d put your money with this financial genius. It’s all bollocks, and it’s one professional service that’s not going to get any of my hard earned cash, ever.

3 thoughts on “Paying for The Professionals

  1. if you’re careful who you hire – tradespeople usually do a good job, they will definitely be quicker than you, but they’re not incentivised to do a great job, they are incentivised to do an acceptable job in as short a time as possible. That’s how it is possible for a DIYer to do a better job than a professional. I’m sure your tap is fine..

    I noted that Lars Kroijer also advises on the good-sense in hiring a tax-accountant and the bad-sense in hiring a fund-manager..

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  2. I’m concerned when I pay a ‘professional’ but their interests aren’t aligned with mine. For example a dentist: he or she will make more money by fixing problems, not by preventing them. A driving instructor will sell you more lessons by teaching you to fail a test, not to pass it. It takes a long time for the customer to figure out that they’ve been played.

    At least when I was considering using an IFA I knew enough to identify who didn’t have my interests in mind, or who made simple mistakes that I picked up on, or who was only there to sell me more stuff that I didn’t need. When I think of how many smart people I know don’t trust themselves enough to do without an IFA and hand over a fortune in fees it bothers me that they are paying for a service that I wouldn’t take if it were free.

    For the tax into a pension query, I find that the calculation they sent me last year with my refund cheque (assuming you don’t do SA) is a good place to start. In previous years I called them up and explained exactly what I wanted to do (put all my 40% pay into my SIPP) and they were incredibly helpful and we went through the whole calculation together. I don’t know if I was lucky that day or unlucky since but I’ve not had the best of luck with them recently.

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  3. Excepting the comments around alignment of interests, I don’t think there’s anything wrong with paying a professional to do something for you even if you could do it yourself. Say I took a week off from my business to decorate my home, fine if there’s not much happening and I can engineer the time, but if I have clients willing to pay me $x for my time and the decorators are going to cost me less in time/$ than I can charge my clients I’m happy to make the trade ! What I find more challenging is finding what I consider to be the right professionals providing good services at fair prices, and thus avoiding that nagging doubt that I might have got a better deal elsewhere.

    PS Glad to see you still finding time for the blog I always enjoy reading your posts Jim.

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