£40,000 commission?

whiteflag_3

1echidna wrote: »

"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.

so can you just clarify your position- are you upset that ; [URL="file://\\;IFAs"]IFAs[/URL] cant give advice with the benefit of hindsight( as they are only human after all) or the fact they might take forty thousand pounds in commission and still lose money?

just the op was about the level of commission not the advice given.

1echidna

whiteflag wrote: »

so can you just clarify your position- are you upset that ; [URL="file://\\;IFAs"]IFAs[/URL] cant give advice with the benefit of hindsight( as they are only human after all) or the fact they might take forty thousand pounds in commission and still lose money?

just the op was about the level of commission not the advice given.

Not sure what you mean but will attempt to answer. Part of my reservaton is about the language used. So and so fund "is" said to be a good fund when what is meant is that so and so fund "has been" a good fund - little guide to fure performance. It is entirely specious to say tha IFA advice would have resulted in a loss of only 7% over the past 18 months when the fund is one selected with hindsight. Yes I think £40000 is steep although I acknowledge that a man is worth his hire, particularly when well qualified and experienced. I have noticed though an unremitting tendency from the prominent IFA on this board, right from the beginning of this present crisis, to play down the seriousness of it, when almost any fool could see that we were in for a bad time. The implication of it was that it seemed that he would be encouraging people to buy into the markets at very bad times indeed and if typical of IFAs makes one wonder if the whole payment scenario distorts their judgement. IFAs give their advice in private, and provided they tick the right boxes, it seems they are not very accountable but perhaps more important there is no transparency as regards the quality of their insight into the undulying forces of our economy. It seems they may be very competent with respect to the nitty gritty details of different funds and other investments but rather ignorant of geopolitical forces and even economic ones.

Lokolo

1echidna wrote: »

Not sure what you mean but will attempt to answer. Part of my reservaton is about the language used. So and so fund "is" said to be a good fund when what is meant is that so and so fund "has been" a good fund - little guide to future performance..

Please oh wise one, tell us what is going to happen in the next 5 years so I know which funds to buy into. oh yes and where did you buy your crystal ball? I am thinking of investing (ha) in one myself.

1echidna wrote: »

I have noticed though an unremitting tendency from the prominent IFA on this board,

And he's very useful to. More useful than others.

1echidna wrote: »

The implication of it was that it seemed that he would be encouraging people to buy into the markets at very bad times indeed

He doesn't tell anyone to buy anything? People ask what about X, what about Y. He gives a response. Would be very boring in these boards if all responses were "Well I have a crystal ball and I can see that in 12 months time the UK is going to be in the sh*tter so I recommend you don't buy anything", for every single thread, even if they weren't planning on buying into the fund.

Example, I asked about a particular fund and how do I know whats good about it and whats bad about it. Doesn't mean I was going to buy into it.

1echidna

Lokolo wrote: »

Please oh wise one, tell us what is going to happen in the next 5 years so I know which funds to buy into. oh yes and where did you buy your crystal ball? I am thinking of investing (ha) in one myself.



And he's very useful to. More useful than others.



He doesn't tell anyone to buy anything? People ask what about X, what about Y. He gives a response. Would be very boring in these boards if all responses were "Well I have a crystal ball and I can see that in 12 months time the UK is going to be in the sh*tter so I recommend you don't buy anything", for every single thread, even if they weren't planning on buying into the fund.

Example, I asked about a particular fund and how do I know whats good about it and whats bad about it. Doesn't mean I was going to buy into it.

Oh what fun it is cutting up a posting and commenting out of context and without reading carefully.

Lokolo

1echidna wrote: »

Oh what fun it is cutting up a posting and commenting out of context and without reading carefully.

The only bit I can think I got wrong is the 1st statement. But it still makes sense. I don't understand it really. You're saying all he does is is say funds with a previous good performance are good funds.... Which isn't true, he doesn't say that lol

Entertainer

Or do some research, invest it yourself and save the £40,000.

What a disgrace, it shows how lazy and indolent these people are, charging that for doing next to nothing.:mad: Haven't they heard there's a recession? they should be tightening their belts like the rest of us (me having just opened a 50p bag of bacon and a 15p bottle of ketchup.) Our economy is like a fat, lazy labrador.

Seriously, I could invest this better than that idiot at no charge. A mixture of building society bonds, gilts, U.K Equity Income funds and corporate bond funds.

dunstonh

they should be

AFAIA, the OP made reference to only one individual.

Seriously, I could invest this better than that idiot at no charge. A mixture of building society bonds, gilts, U.K Equity Income funds and corporate bond funds.

All without knowing the tax status, risk profile and aims and objectives of the OP no-one can say what is best.

It is entirely specious to say tha IFA advice would have resulted in a loss of only 7% over the past 18 months when the fund is one selected with hindsight.

I rarely mention any funds specifically. The OP mentioned the funds in this case and it was 1echidna said they would be down 40% had it been done 18 months ago. I corrected that by saying it would be down 7%. That actually strictly true as the With profits part would be up 6%. The guaranteed fund would be down 7%. So, complaining about mentioning past performance when it was you that brought it up is a bit rich.

whiteflag_3

1echidna wrote: »

Not sure what you mean but will attempt to answer. Part of my reservaton is about the language used. So and so fund "is" said to be a good fund when what is meant is that so and so fund "has been" a good fund - little guide to fure performance. It is entirely specious to say tha IFA advice would have resulted in a loss of only 7% over the past 18 months when the fund is one selected with hindsight. Yes I think £40000 is steep although I acknowledge that a man is worth his hire, particularly when well qualified and experienced. I have noticed though an unremitting tendency from the prominent IFA on this board, right from the beginning of this present crisis, to play down the seriousness of it, when almost any fool could see that we were in for a bad time. The implication of it was that it seemed that he would be encouraging people to buy into the markets at very bad times indeed and if typical of IFAs makes one wonder if the whole payment scenario distorts their judgement. IFAs give their advice in private, and provided they tick the right boxes, it seems they are not very accountable but perhaps more important there is no transparency as regards the quality of their insight into the undulying forces of our economy. It seems they may be very competent with respect to the nitty gritty details of different funds and other investments but rather ignorant of geopolitical forces and even economic ones.

1echidna- I basically agree with your thought process in as much as IFAs are not fund managers/stock pickers and are in no better position to predict the future than the next man.

Equally, its easy for non IFAs to slip into the same mode, for example you say an IFA on this boardsmight have encouraged people to invest in "bad" times-perhaps , but in five years time, investing now or over the last six months might look like the best move ever. In terms of longer term investing can you say with certainty that these are "bad" times?

That said I completely disagree with what you say about the £40 K commission. THat level could never be justified for the simplistic recommendations made- there would be no more work involved in investing £40K !!!. The recommendations made also dont suggest that the "IFA" in this case is particularly "well experienced and qualified".

paul5046

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.

If the 40k is an initial fee for setting it all up, that includes taxation advice as well, thats approx 3%. For good advice and service i'd be happy with that, plus a low annual fee.
Having said that if a good advisor charged £200 per hour, for 10k you could get 50 hours advice. Would that be long enough to set it all up.

Whichever way you go, my main aim would be finding a trusted and competent advisor with the aim of building a long term relationship.

paul5046

dunstonh wrote: »

Of course it would. That would cover a lot of servicing.



A transaction this size must be done on fee basis as you will benefit more from it. IFAs have different business models and charging structures. There will be many IFAs that will not take a penny in initial charge (or just a very small amount - £1000 say) as it will just be the natural fund based trail that they will use in future for servicing and that will avoid any requirement for invoicing. However, you may prefer that option in which case there will be some that work to that basis as well.

When you employ an IFA you need to decide what level of service you want. Is it just a one off transaction, a full review, a portfolio service etc. Then you find out how much they will charge for the level of service you want. Some will be good value, some expensive. Cheap isnt always best but expensive isnt either. If the service gives good value for money then its worth it.

For 1.3 mill wouldn't you want tax advice and maybe legal advice as well. Can IFA's do all this or would you need an accountant and solicitor as well.