COMMISSION TO IFAs

ShrewdDude_2

Just for everyone's interest, MoneyBox on Radio 4 on Saturday had an item about Intelligent Money. It can be found on the BBC website at -
http://news.bbc.co.uk/1/hi/programmes/moneybox/3468557.stm

FWIW, this sounds of interest to me. I have a pension scheme that was set up years ago with an IFA. Since inception I have received no advice from my IFA. The initial adviser (to whom I feel loyalty) has moved from this company; the company has been bought out; and they have even moved offices! My experience here is probably not unusual - i.e. it is extremely hard to find an IFA that is good, and with whom you can have a long term relationship. On that basis I fail to understand why I should be paying a big pile of cash every year to some faceless organisation who gives me NOTHING in return.

I definitely agree with payless about a good IFA being worth their cost. It's just that a lifetime of experience with a number of them makes me think they are simply not worth the HIGH costs they eventually get.....

I'm also grateful to Martin for his thoughts on IM. I like hearing the contrarian view, which is why websites like this are such good value. However, I am very intigued by the Intelligent Money proposition and plan to find out more - it's a clear win:win for CERTAIN products.

I guess my first port of call is to find out which of my products might qualify for this and just how much renewal commissions are involved. I suppose that means phoning the providers?

One question for Julian. If you join IM, do you get a customer account on the website showing the status of your rebates? A year is a long time to wait for what might be a significant amount of money and it would be nice to be able to keep an eye on things!

System

Thank you to everyone who replied to my original question, I did'nt expect such a forum!

You have given me much to look into and think about.

Kind regards,

Jackie

P S Anyone know anything about the implications of making endowments 'Paid Up' ? See my new question.....

payless

Jackie

Here we have a clear example
the IFA you is earning commission from your renewals is not (I assume) earning his keep by providing on going advice-
IM say (after a free) they give you back the renewals, but won't provide advice.

Any new IFA would really have to charge a fee to look at your case, as he knows that even if you transferred renewals to him he would not be able to guarantee them in the future.

Jenny_Boyce

As I have a meeting with an IFA tomorrow night this is very timely! A few years back an we invested quite a large amount of money for my father in bonds on the advice of an IFA who then got his commission and failed to do any promised follow up because he got a bout of 'depression'. I now own the bonds and obviously don't want him getting any commission but I assume that bonds don't pay commission more than once? So presumably there's nothing I can reclaim? I've naturally told both investment companies that this IFA is no longer my advisor.

Also, would a broker who set up a pension for me years ago still be receiving commission? I have no idea whether the IM scheme would be worthwhile as I simply don't know what commissions might be being paid (Julian's main point). Am about to purchase life insurance through Lifesearch - is any commission reclaimable from on this?

Confused...

Darryl

JAB

You have bonds, a pension and are about to purchase life insurance... Methinks with this number of products, and depending (probably) on the value of your pension, IM may be worth looking into. The short answer to your Lifesearch question is - yes - I am doing a similar thing myself (but income protection not life insurance).

I'd be interested to know what your IFA says about the IM option, and what their fee-based charging might be...

Darryl.

System

This service seems OK for folk who are happy to make all their own investment choices, but just make sure you keep aware of your policies.

Would be interested to know the tax position with regard to rebating pension commission to the client - I thought this was not allowed, or subject to a tax charge, and also how Intelligent Money will address money laundering issues?

System

Can I claim commission back from my company pension scheme?

The company scheme is money purchase (with Scottish Equitable) - company puts in 5% I put in 3%.

Thanks
John

lisyloo

John,

I would think not.
Your company will have advisors that they use (and take the commission).
You have no choice about this.

Essentially this is the companies scheme and not yours and the advisors work for the company and not you.

Found this out the hard way.

Darryl

John

The answer depends on the type of 'company pension'.

Some companies provide what are known as 'group personal pensions', that appear to be company schemes, but are in fact personal pensions that are grouped together (for what reason I don't know)

I have one of these from a previous employer and will be switching over from a greedy IFA to Intelligent Money just ASAP.

Darryl.

payless

If a Gpp was via a previous employer, are you still making contributions, as usually ( although not always- especially on newer schemes) GPP commissions are based on a % of contributions as they are paid, not on a % of fund, so likely if no contributions - no commission rebate.

If John is talking about a product with ongoing premiums and on going advice, even if he can swap, he may find the original IFA may have the right to bill his employer, who in turn....