IFA Increasing my charges
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naive_investor
Posts: 23 Forumite
For years IFA has charged 1% on new investments and annual 0.5%. He now tells me that other customers are paying 0.75% and that in order that they are 'Treating Customers Fairly' they must increase my fees.
We have say 200K invested and increasing by 20k a year isa and the growth of value of the pot. So he earns £ 1200 per anum from us. The new charge would make that £1700
In exchange we get an annual two hour consultation and a rebalance of the portfolio. (The portfolio is a standard one though unique to their company). They use Fidelity as a platform.
Now I know his services have to be paid for but this straw may break the camel's back!
Even if I renew, I think I may open a separate Fidelity 'unadvised' account and self invest other cash, pension and ISA contributions and a future SIPP in that rather than through him (though using his advice which I consider I will have paid for). In short I think this is a bad move for us both. He is going to end up losing money even if I stay.
What should I do?
We have say 200K invested and increasing by 20k a year isa and the growth of value of the pot. So he earns £ 1200 per anum from us. The new charge would make that £1700
In exchange we get an annual two hour consultation and a rebalance of the portfolio. (The portfolio is a standard one though unique to their company). They use Fidelity as a platform.
Now I know his services have to be paid for but this straw may break the camel's back!
Even if I renew, I think I may open a separate Fidelity 'unadvised' account and self invest other cash, pension and ISA contributions and a future SIPP in that rather than through him (though using his advice which I consider I will have paid for). In short I think this is a bad move for us both. He is going to end up losing money even if I stay.
What should I do?
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Comments
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Personally I would stop paying and do your own research, you could even maintain the portfolio based on the existing proportions but it's a lot of money to pay each year if you're not really getting a lot of benefitRemember the saying: if it looks too good to be true it almost certainly is.0
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I agree, drop the IFA and go DIY....either use the existing portfolio and allocations as a template or maybe even look to save more money if you have actively managed funds by replacing them with some trackers.“So we beat on, boats against the current, borne back ceaselessly into the past.”0
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naive_investor wrote: »Even if I renew, I think I may open a separate Fidelity 'unadvised' account and self invest other cash, pension and ISA contributions and a future SIPP in that rather than through him (though using his advice which I consider I will have paid for).
A rather pointless halfway house - he can't advise you properly if you have investments you're not telling him about, as he doesn't have a true picture of the extent of your assets, how much you can afford to invest, how diverse your portfolio is, etc. If you're going to go DIY then go DIY.
Are you sure he's an Independent Financial Adviser? It is possible for an IFA to use a single platform and set of model portfolios as long as they have properly considered and discounted all the other options, but an IFA who does that has a tenuous grip on the label. Check that he isn't a Restricted adviser.
The bit about 'Treating Customers Fairly' is just flimflam though you can't blame a guy for trying to deflect blame for putting the prices up. There is no regulation whatsoever that would prevent him keeping you on 0.5% and new customers on 0.75%. He is putting the price up because he wants to maintain his profit margin and he thinks you'll pay it.
What you should do is simple: If you're happy with him and think it's worth another 0.25% a year, pay it; if you're not, find another IFA who charges 0.5% (plenty still do); if you don't want advice at all, go DIY.0 -
I would congratulate the advisor and or firm for their new ambitious and worthy mission statement and that you are willing to assist them in achieving their cause by moving your assets elsewhere; are there any forms they need you to sign?naive_investor wrote: »For years IFA has charged 1% on new investments and annual 0.5%. He now tells me that other customers are paying 0.75% and that in order that they are 'Treating Customers Fairly' they must increase my fees.Personal Responsibility - Sad but True
Sometimes.... I am like a dog with a bone0 -
Reducing his other customers' fees to 0.5% also fully meets your IFA's claimed goal of 'Treating Customers Fairly.' :-)naive_investor wrote: »For years IFA has charged 1% on new investments and annual 0.5%. He now tells me that other customers are paying 0.75% and that in order that they are 'Treating Customers Fairly' they must increase my fees.0 -
I would congratulate the advisor and or firm for their new ambitious and worthy mission statement and that you are willing to assist them in achieving their cause by moving your assets elsewhere; are there any forms they need you to sign?
And you could explain that given you won't be paying the higher fee, were you to continue after negotiation to pay a lower 0.5% fee this would only act as a drag on his average return from his clients, so would have to leave anyway.0 -
Hi I'm the OP
Just a follow up to this. My advisor now tells me his company has merged with [FONT="]Chase de Vere Independent Financial Advisers Limited (Chase de Vere). This probably explains things.
Does any one have any experience of Chase de Vere? What are their charges? If in order for the newly merged organisation to treat customers fairly the charges are raised again I wouldn't be surprised.
I suppose it is increasingly difficult for small advisors to exist. Are we moving to the situation where only the wealthy, or the ones who will pay high charges, or where regulations insist will have access to advice?
Not a good thing!
[/FONT]0 -
naive_investor wrote: »Hi I'm the OP
Just a follow up to this. My advisor now tells me his company has merged with [FONT="]Chase de Vere Independent Financial Advisers Limited (Chase de Vere). This probably explains things.
Does any one have any experience of Chase de Vere? What are their charges? If in order for the newly merged organisation to treat customers fairly the charges are raised again I wouldn't be surprised.
I suppose it is increasingly difficult for small advisors to exist. Are we moving to the situation where only the wealthy, or the ones who will pay high charges, or where regulations insist will have access to advice?
Not a good thing!
[/FONT]
Their website says they charge 1% pa
They offer time based fees at £250 ph
Sounds to me like they should rebrand as "Chase de Fee"
Searching for the company name and "fined" it seems they've had several... umm... hiccups.
"Pension misselling"? Check. "Misappropriation"? Check. "Misleading investors"? Check.0 -
It would be interesting to know how many funds are in your portfolio, whether they all actively managed, and a list of the funds if it is something you can share. As well as the charges you are paying, the individual funds may have quite high annual charges that could also be eating into your returns.
In your position I'd be tempted to leave the IFA and go DIY from now on, continuing to invest in the same funds to start with. As you learn more about DIY investing, consider whether it would be better or cheaper changing to other funds, whether it be active, passive, single sector and/or multi asset funds.0
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