£40,000 commission?

earlgrey_3

JesseBirdsall wrote: »

I went to see an IFA today concerning a 1.3M inheritance. He showed me some quotes for a Norwich with profit bond and a guaranteed fund with legal and general. Anyway, looking at the back page i worked out the advisor will be getting £40k approx plus an amount each year.

We talked about fees, he said unless I want to be invoiced for everything, the commission option would cover it.

Any ideas? seems a bit steep to me.

Jesse, it's a huge amount of money so I'd suggest you spend a very long time seeing lots of people offering different options for having your money both managed and invested until you become an out and out expert. There's no hurry in present markets and don't commit to anything until you're certain. It's a hassle but well worth it for the amount involve.

It's something I'll be doing myself again at some point to avoid the hassle of managing my own funds. Don't be too impressed by the coffees on a silver tray you're likely to get when you mention the sum involved.

1echidna

earlgrey wrote: »

Jesse, it's a huge amount of money so I'd suggest you spend a very long time seeing lots of people offering different options for having your money both managed and invested until you become an out and out expert. There's no hurry in present markets and don't commit to anything until you're certain. It's a hassle but well worth it for the amount involve.

It's something I'll be doing myself again at some point to avoid the hassle of managing my own funds. Don't be too impressed by the coffees on a silver tray you're likely to get when you mention the sum involved.

Given IFAs propensity for investing the lot, or a large proportion, immediately earlgrey's advice about shopping around and taking your time seems particularly apt with the market it seems still in decline. If you had been in the position you are now 18 months or so ago you could well now be looking at 40% losses on money invested.

dunstonh

If you had been in the position you are now 18 months or so ago you could well now be looking at 40% losses on money invested.

No you couldnt. Not even close to that.

willt

For this amount of money, you really need to have the benefit of ongoing advice. You can't possibily start a long term relationship with someone who you feel is ripping you off. Go somewhere else, get a few more professional opinions but avoid this cowboy

MrMicawber_2

I'm a bit surprised the advisor has suggested putting the whole lot into just two products as well as the amount of commission.

Am a missing something - do these two products give a satisfactory spread of risk?

I'd agree with earlgrey on this. See a good number of IFA's and choose someone carefully - and go fee based.

A question on the products - Jesse says one is a with profits bond but apparently it isn't - what is it? It looks like an investment bond?? Is this necessarily the best place to put money - presumably the advisor you saw discussed fully with you what your intentions were for your inheritance???terms of ??

dunstonh

For clarification, the NU bond is just the tax wrapper. It has access to over 100 unit linked funds. Those funds can range from a cash fund, fixed interest, property and across the range on equities. There is also two with profits funds available and the guaranteed fund.

So, its possible to have the WP fund an the guaranteed fund within it. So, WP could be chosen. Both the WP and the guaranteed fund have capital security at the 5th year. £1.3 mill really deserves a wider spread than two funds.

whiteflag_3

:mad:

JesseBirdsall wrote: »

I went to see an IFA today concerning a 1.3M inheritance. He showed me some quotes for a Norwich with profit bond and a guaranteed fund with legal and general. Anyway, looking at the back page i worked out the advisor will be getting £40k approx plus an amount each year.

We talked about fees, he said unless I want to be invoiced for everything, the commission option would cover it.

Any ideas? seems a bit steep to me.

Its a staggering amount for what appears to be very little work. Its people like this that give the industry a bad name. Walk away.

Find a true fee based adviser - thats one that charges an hourly rate or a set fee for the worked involved.

Ignore fee based advisers whose fees are a percentage of the amount you invest -thats just commission by another name. Think about it, why should you pay 0.5% per annum (£6500) for servicing when someone with £0.5 million invested will pay £2,500 for the same service!!!!!!!!!!!!:mad:

1echidna

dunstonh wrote: »

No you couldnt. Not even close to that.

Unfortunately we will never know what levels of loss (paper) people presenting with investment advice to IFAs for the first time 18 months ago with a lump sum will have suffered. Perhaps my 40% was extreme as I would hope that for most people at least there would be a significant proportion invested cautiously. For a group of people who say that they can be trusted to advise on large sums of money belonging to private individuals perhaps they should be subject to independent audit and figures should be available to individuals considering using an IFA for average returns achieved each year for different risk profiles. It is deemed appropriate for hospital surgeons to have performance figures published, why not IFAs?

dunstonh

It is deemed appropriate for hospital surgeons to have performance figures published, why not IFAs?

Because IFAs dont manage funds. Fund managers do that and their data is published.

Unfortunately we will never know what levels of loss (paper) people presenting with investment advice to IFAs for the first time 18 months ago with a lump sum will have suffered.

about 7% loss on the funds recommended. However, as both funds have capital guarantees, it would have been an interim paper loss only.

1echidna

"Because IFAs dont manage funds. Fund managers do that and their data is published."

They manage which funds people put their money in. Where's the problem?



"about 7% loss on the funds recommended. However, as both funds have capital guarantees, it would have been an interim paper loss only."

I am talking about the funds IFAs would have recommended 18 months ago without the benefit of hindsight, not what they are recommending now. And one has to recognise that past performance is not necessarily a guide to the future.