How does a stocks and shares ISA work?

earlgrey_3

dunstonh wrote: »

If you are going to go down that route then you may as well be critical of the like of HL who keep trail but do nothing for it.

Sorry I was referring to all the fund managers who don't pass on the savings on commission when someone buys direct from them for fear of undercutting intermediaries - including HL.

I dont follow you. A £1000 fee whether paid by cheque or out of the investment commission is still £1000. What perceived bias can exist there?

Because the IFA is then dependent on generating sufficient commission to make the total fee acceptable and sellable.

We could be as little as 12 months away from it. Customer agreed remuneration is still in the FSA proposals. I already work to that basis and it is estimated that 1 in 4 IFAS work to either fee or hybrid fee/CAR basis. So, its not an issue.

I see the problem remaining to some extent if any part of an advisor's income is from commission. The major difficulty will be those customers who will always prefer not paying a straight fee for a service. Whatever the product, sales commission has to be paid for by an increased price for the product. That it applies to financial products isn't the fault of IFAs but the history of selling them and because most advisers will have come from tied salesforces. That's the way they have long been sold. In an ideal world, to prevent any bias, there would be no commission paid but I suspect it will play a major part for a long time.

(We seem to have highjacked the OPs thread and moved a little way from "How does an S&S ISA work".)

dunstonh

Because the IFA is then dependent on generating sufficient commission to make the total fee acceptable and sellable.

I dont see that being an issue. The fee is paid out of the commission with any shortfall made up and any surplus rebated. However, with the size of most investments that IFAs deal with, it really isnt an issue.

(We seem to have highjacked the OPs thread and moved a little way from "How does an S&S ISA work".)

Only a little