cashback offer from changing investment brokers

jackiefewtrell

we have just gotten a letter from elson associates offering up to .5% cashback of the total sum of isa, etc investments which are switched from other brokers to elson.

they are able to do this as they are giving their initial commission to the customer (and keeping the annual commission they receive later to themselves)

has anyone got any experience working with elson?

has anyone else already done this? would you recommend it?

thanks for your response,
jackie

dunstonh

On re-registration of investment funds, there is no initial commission payable. If re-registration isnt used by transfer is used, then they can levy an initial charge but even if they don't, the fund manager can (if they dont take the 3% charge but the initial charge is 5%, then you will be charged 2%). So, there could be hidden charges.

Also, if you re-register/transfer without advice, you lose the consumer protection you had when you purchased the investments as you are changing the investment. Even if you use the same funds.

Based on what you have said, it appears that they are giving back 0.5% which equates to 1 year trail commision (ignoring growth). It may not be even that as there are providers that will pay to re-register (and even transfer). They could be using that to subsidise that 0.5%.

If your existing IFA isnt providing you any ongoing service (such as visits on large porfolios or reports on smaller ones) and you have no reason to use them again, then you could consider it. Alternatively you could consider switching to an IFA that will give you that service or if you don't need that servicing, then you can do better using a full discount IFA such as those mentioned on this website.

If you purchased through a tied salesforce (such as a bank), you may find that re-registration isnt possible and a new product is sold in its place. This could pay a lot more than 0.5% and its fairly easy to find IFAs that will provide you more than 0.5% (the more you have, the more you tend to get back).

jackiefewtrell

thanks for your advice.

we have gone ahead and moved my husband's investments... and if things go well with elson, we will consider moving mine.

so far, we completed the switching papers in late nov / early dec and have not heard anything at all from elson yet.