L&G S&S Ethical ISA, advice?

lynzpower

Can you not ask friends or family for a recommendation? If not www.unbiased.co.uk is the database for IFAs. Try to look for a smaller local firm and avoid the national sales forces (often with 0870 in their phone number)

No can do Jem, sadly none of my mates have any money to save let alone invest, most of them are struggling still to pay off debts or too busy spending it all

Probably commission at this level

Does that mean I will pay more for thier advice whether i take it or not?

Sorry not sure what you are meaning here?

Is there any point in commission based IFAdvice if my worth in these investments is only 11k, I mean I thought that commission was for back-kicks/cashback as you continue to invest over the years ( such as pensions? ) this is what I think I gained from Martins article

But v confused even by the terms as you can tell!

jem16

lynzpower wrote: »

Does that mean I will pay more for thier advice whether i take it or not?

What I meant was that for higher amounts fee based is often the best way as a percentage of £1million would be very high compared to a fee.

If you don't take their advice after they have done the work then you would be expected to pay a fee for work done.

Is there any point in commission based IFAdvice if my worth in these investments is only 11k, I mean I thought that commission was for back-kicks/cashback as you continue to invest over the years ( such as pensions? ) this is what I think I gained from Martins article

But v confused even by the terms as you can tell!

When you buy funds each provider usually has an initial charge of around 5%. An IFA can get sometimes better terms if he is part of a network and that may bring the initial charge down. From that 5% the IFA would be paid 3% so if your IFA took the full 3% then you would pay 5% initial charge on the fund. So if you invested £1000 in a fund, £950 would actually be invested and £50 would be the initial charge. If your IFA only took 1% (although this is unlikely as there is very little scope for discounts on a small amount) then your initial charge would be 3% so £970 would be invested.

So paying on a commission basis means that you don't actually pay the IFA, the provider does. However your investment starts off less.

On an annual basis the IFA is paid 0.5% trail commission from the fund provider. Normally the annual management charge is around 1.5% of which 0.5% goes to your adviser. In the case of going direct as you did you still pay 1.5% amc and the provider simply keeps the 0.5%. Basically you don't pay any more amc whether you have an adviser or not.

With H&L they discount part of the amc if you choose the funds yourself.

Hungerdunger

lynzpower wrote: »

I know ive only lost 2k

Not meaning to be pedantic, but you haven't lost anything at this stage. That will only happen if you decide to sell.

If it's any consolation (and it probably isn't), my Skandia Ethical Investment has dropped by over 17% since June 2007. I was warned at the time I invested (MArch 2007) that this fund could be hit harder than many if there was a downturn in the market.

lynzpower

thanks for this.

I will be speaking to HL today.

Am I right in thinking that HL wont advise me where to put the funds, again I have to choose myself? Or that I have to pay an IFA for them to advise me which funds.

Is this correct?

dunstonh

HL is an execution only service. You do the investment decisions. They do not provide any advice. Just marketing. That is why they discount as they have no liability to worry about. i.e. you cannot go and complain to the FOS about fund choice or not knowing about something you should have. Effectively, you are taking on the role as the adviser and you take on the responsibility.