halifax financial adviser fees.

solis_3

hi all, completely new to this site as ive never had money worries due to the fact that ive never had any until now.
i was left a six figure sum by an aunty 20 years ago which was held by a solicitor, the solicitor duly spent it. after the fraud squad got involved as well as the law society i have now got £1million, with compensation.
The financial advisor at halifax has given me advice and pointed me in the direction of 4 lowish risk funds. the idea is to draw some of the capital per month to live off. anyway the questions i need to know is, for this service/advice the sum they want is £26,000. also for each fund the cost is 1.4% per year, are these charges high or am i being naive. thanks for any help. dawn

jem16

Do not go to a bank for investment advice. Their sales reps are low skilled and products poor. They are also not able to portfolio plan. Charges are usually higher than what you would pay seeing an IFA. From next year the sales reps at banks will not be allowed to use the word adviser.

If I read this correctly you have £1m to invest and they want to put it into just 4 funds????

Please see an Independent Financial Adviser - go to https://www.unbiased.co.uk.

LongTermLurker

Jem's points are worth thinking about

1) They are tied to the Halifax, so they can only sell what the Halifax want you to buy
2) They can only come up with 4 fund choices, which is very poor diversification
3) They are charging 2.6% initial fee plus 1.4%pa - that's not cheap
4) Although low risk may sound like a good idea, unless you are close to or in retirement, it may be worth putting part of that money into something a bit higher risk/return - balancing the product risk can give better returns without too much in the way of volatility.

Before commiting to the Halifax, see a couple of IFAs and see what they have to offer - with that amount, you will probably do best with fee-based services rather than commission.

dunstonh

You would be crazy to get advice from a bank. Especially one as poor as Halifax.

The financial advisor at halifax...

From next year, current FSA proposals will not allow them to refer to themselves as Financial Advisers. They will be insurance agents or sales representatives which reflects the fact they use a sales process rather than an advice process.

Tied advisers cannot portfolio plan. The use of just 4 funds on 1 million reflects that. However, Halifax also dont have the fund range to diversify much. Especially at the lower risk end. Where they do have funds, they are almost universally poor performers.

the sum they want is £26,000

You will find a number of IFAs willing to charge little or nothing up front for handling your portfolio. You should also work on fee basis with that amount and not commission (as the Halifax are doing).

You really need to see an IFA for your advice. Not a sales rep.

cashprincezac

Don't be too quick to go to an independant...they offer products with higher commission to themselves.

It is swings and roundabouts....gain advice from a number of sources.

On this sum the fee they charge is reasonable....My father went to an independant and was charged over 2% on top of other fees.

jem16

cashprincezac wrote: »

Don't be too quick to go to an independant...they offer products with higher commission to themselves.

The offer independent advice from the whole of the market and not just a few tied products. Choose an agreed fee and all commission is rebated back to you - banks cannot do this.

It is swings and roundabouts....gain advice from a number of sources.

So long as they are all independent. Going to a bank is a recipe for disaster - you only need to read the number of posts here complaining about their investments with banks, especially the Halifax.

On this sum the fee they charge is reasonable....My father went to an independant and was charged over 2% on top of other fees.

It's not reasonable.

With £1m to invest a lot of IFAs will take on that portfolio purely for the natural trail commission that it will generate and will take no initial fee. Some will charge an initial fee but it will be much less than £26,000. The point is that the more you have to invest the better deal you are likely to have with an IFA.

TBeckett100

consider splitting the money and having a discretionary managed portfolio. IFAs can be a little reactive but still add incredible value

Kavanne

I gave halifax £4000 of my money. Never again! lol

dunstonh

Don't be too quick to go to an independant...they offer products with higher commission to themselves.

No they dont. However, if you are paranoid about a possible commission bias then dont select commission but pay by fee.

On this sum the fee they charge is reasonable

The fee is a disgrace. £26k for a tied sales rep. Thats about £24k-£26k more than many IFAs would take it on.

My father went to an independant and was charged over 2% on top of other fees.

Obviously your father was happy with that as fees are agreed and not automatic. However, seeing as you think 26k is fine, I'm not sure what you are really able to judge (to be fair )

LongTermLurker

In order of posting...

Before commiting to the Halifax, see a couple of IFAs and see what they have to offer - with that amount, you will probably do best with fee-based services rather than commission.

You should also work on fee basis with that amount and not commission (as the Halifax are doing).

cashprincezac wrote: »

Don't be too quick to go to an independant...they offer products with higher commission to themselves.

jamesd

solis, it's a really bad idea to use Halifax for that unless your objective is to make someone there very, very happy.

The amount involved is one where you might investigate IFAs and also wealth management companies.

1.4% as the annual charge for the funds from which the adviser/retailer gets 0.5% a year commission is normal enough. For the amount involved I expect that a competitive IFA would be willing to negotiate to take less than the normal 0.5%. For the initial work you might expect to pay anything from 2-5,000 on fee basis, depending on the services being provided. Possibly more.

There's some merit in splitting it and asking different people to look after each portion, since individual people approach the problem in different ways.