halifax financial adviser fees.

solis_3

hi again, i have a couple of numbers to ring this week for ifa advice, taken from unbiased.co.uk(thanks jem16). just wanted to know what questions should i ask. also do i pay a fee for the initial meeting. thanks dawn

jem16

Initial meeting with an IFA will be free as they have to give you a document detailing their charges etc before they can make any charge. It won't give you any detailed information but should be enough for you to get an idea of what they will do.

Some questions to ask would be;
1. What would be their fee to invest £1m both for initial work and ongoing servicing?
2. What kind of strategy do they follow for investments, i.e sector allocation?
3. Will they provide ongoing servicing (reviewing your portfolio and rebalancing) and how often?

When choosing an IFA try to avoid large national salesforces (often an 0870 or 0845 number) as they tend to have a large staff turnover and you won't necessarily see the same person again. They also tend to work to commission. Try to choose a smaller local frim where you will be able to speak and deal directly with the owner/partner.

Come back again when you have spoken to a few.

dunstonh

With that sort of investment, try to get an owner/partner or director of an IFA firm. That should ensure longer term stability (as they dont move around very much and also tend to be more experienced).

The term IFA covers a wide range of skills and experience. Some IFAs may spend 90% of their time on mortgages. So, you wouldnt want to see one of them for larger investments (this doesnt differ in any way to the Halifax or other banks are are jack of all trades advisers as well). You want an IFA that is specialist in investing.

jamesd

You might also take notes about what each gives as a general plan and ask us to take a look over those general plans.

Ask them what they think of funds like BlackRock UK Absolute Alpha, CF Arch Cru Investment Portfolio and Skandia Alternative Investments Fund. If they don't recognise any of the names it's a bad sign - the BlackRock fund in particular is extremely popular, but fairly new, so not knowing of it may suggest that they aren't paying attention to new developments. All three are alternative investments that offer useful diversification and predictability benefits, though the Skandia fund is too new to have proved that it does the job well, unlike the first two.

Ask whether they think you should invest the stock market portions of the money gradually and why they gave the answer they did.

Now's a good time to be investing in the stock markets worldwide because prices have fallen, but they could easily fall another 20% so there's some stability benefit in investing the stock market portion over a year or two in case the markets fall further. But if the markets recover more quickly that means losing some of the gain. An adviser who suggests taking time to invest gradually is likely to be more concerned with preserving your capital and reducing the ups and downs that you see and that's probably a good thing for you.

Ask what ongoing services they think you should get from them and how they think it would be best for you to pay for those services.

Once you have some initial feelings about them and perhaps some feedback from here, it's worth paying fees for two or perhaps three to work up plans so you can compare them. Be sure to tell them that you are doing this to help you choose between several advisers, so they know that they might not get the business - that's to be fair to them as well as to let them know it is competitive.

solis_3

hi all, contacted ifa in my area from unbiased.co.uk, he came around last friday. his initial charge for setting up the portfolio is about 3% which i make out to be £30,000. He was definately more in depth than Halifax so much so half of it went straight over my head. ill definately get some more advice from another ifa before i make my decision. dawn

jem16

solis wrote: »

hi all, contacted ifa in my area from unbiased.co.uk, he came around last friday. his initial charge for setting up the portfolio is about 3% which i make out to be £30,000.

Did you ask what fee he would take rather than commission as it's already been mentioned that it would be cheaper that way.

solis_3

hi jem, the 3% is for a fee based payment, when i asked him about fee charges and how much it would cost me to set up the portfolio he said it would be about 3% of the amount invested, we didnt really talk about commision fees to set up the portfolio. dawn

jem16

I always understood a fee to be an actual amount rather than a percentage but perhaps I'm wrong here.

Sounds very greedy to charge £30,000 IMO.

cooper2110

Sounds very greedy to me also. As an earlier poster said, most decent IFA's would happily take this on with no initial charge (rebated back into the investments) and to earn from the natural trail (which incidentally if it was 0.5% of the investment per annum would mean it is in the IFA's interest for it to do well).

dunstonh

Extremely greedy. 3% is a commission figure (collective investments typically have 3% as the maximum commission and 1.8% as average).

This sort of investment could be arranged with little or no initial charge as its the natural trail where the money is for most IFAs (unless the IFA was employed or a salesforce member in which case they often dont get trail so rely on the initial).

The 3% option is not fee based. It is commission. This transaction needs to be fee based as it will be so much cheaper (£nil-£2000 if trail is kept).