£40,000 commission?

paul5046

whiteflag wrote: »

would that be £130K in unneeded tax or investment loss ?

IF your saying the more the investment adviser charges, the better the advice then I think thats madness!

Of course i'm not saying that.

whiteflag_3

dunstonh wrote: »

We have already said that early on in the thread. It is typical of a salesforce/tied agent style recommendation and its being "retailed" at the same price you would get it for if you bought from a bank.

I just felt a little bit of context needed to be put in there.

Yes but because banks do it ,there is no excuse for "IFAs" to the same.

whiteflag_3

paul5046 wrote: »

Of course i'm not saying that.

That's good, as it sounded as if thats what you were saying.

whiteflag_3

It had to happen sometime, earlgrey has posted something that is correct !



:T Some IFAs are now claiming to be "fee based" because they don't keep the initial commission and some refund the trail commission. But many of those still charge their fee on the basis of the amount invested which still encourages bias. If they get a bigger fee the larger the investment then that won't encourage them to tell a client that the best thing is to just keep his money in savings until the climate is better for investment. :T

Lokolo

whiteflag, yeh but say they want to charge £200 an hour for a session no matter how much you want to invest (I think this is how dunston does his fees) then for someone like me with only £100 a month to invest wouldn't be worth it.

But I do see your point.

I think if they did it in brackets so like

Invesment Amount - Charge
upto £10,000 a year - £100 a year
£10,001 - £25,000 - £150 a year
£25,001 - £100,000 - £250 a year

or something like that. But should reflect the amount of work involved. Yeh I can imagine theres not going to be much different between amounts but there will be differences.

I also think they should be regulated (fees I mean). Dunno really, just my 2 pence!

1echidna

Personally (quite apart from not having the qualifications and experience) I could never work as a financial advisor. In advising people on the disposition of something as important as their money I would not find it easy to face people if they incurred significant losses as a result of my advice (or even invested at a point where they would have been far better off to wait a year or so). It is all very well to talk about not having a crystal ball but part of the patter is too encourage the client that he is doing the right thing investing as advised and that he is in sound hands. When I talked in a previous post of someone losing up to 40% if he had seen an IFA 18 months ago I was referring to the advice he may well have received 18 months ago not the particular advice he receives now (with the benefit of hindsight). Even now with shares low there is some likelyhood of further falls and a Japanese style recession with no recovery for a very long time indeed. I hold about 25% of my portfolio in equity based assets more in hope than in expectation and would hate to be in the position of being in any way responsible for the way others invest. The warnings when one takes financial advice are rather like the side effect warnings on patient information leaflets with medicines, one tends to expect that they will not be an issue.

whiteflag_3

Lokolo wrote: »

whiteflag, yeh but say they want to charge £200 an hour for a session no matter how much you want to invest (I think this is how dunston does his fees) then for someone like me with only £100 a month to invest wouldn't be worth it.

quote]

But until youve had a "session" how do you know if you need to invest, let alone how much?

Lokolo

whiteflag wrote: »

But until youve had a "session" how do you know if you need to invest, let alone how much?

Well I do lol...

whiteflag_3

1echidna wrote: »

Personally (quite apart from not having the qualifications and experience) I could never work as a financial advisor. In advising people on the disposition of something as important as their money I would not find it easy to face people if they incurred significant losses as a result of my advice (or even invested at a point where they would have been far better off to wait a year or so). It is all very well to talk about not having a crystal ball but part of the patter is too encourage the client that he is doing the right thing investing as advised and that he is in sound hands. When I talked in a previous post of someone losing up to 40% if he had seen an IFA 18 months ago I was referring to the advice he may well have received 18 months ago not the particular advice he receives now (with the benefit of hindsight). Even now with shares low there is some likelyhood of further falls and a Japanese style recession with no recovery for a very long time indeed. I hold about 25% of my portfolio in equity based assets more in hope than in expectation and would hate to be in the position of being in any way responsible for the way others invest. The warnings when one takes financial advice are rather like the side effect warnings on patient information leaflets with medicines, one tends to expect that they will not be an issue.

Given the way you would feel , how do you think advisers that started to take 1% trail commission a year ( instead of the normal 0.5%)or so ago and justified it by saying they would add value by using their "investment expertise", are finding dealing with their clients now?

dunstonh

how do you think advisers that started to take 1% trail commission a year ( instead of the normal 0.5%)or so ago and justified it by saying they would add value by using their "investment expertise", are finding dealing with their clients now?

Advisers taking more than the natural trail have little or no justification for taking it most of the time. The natural trail should be sufficient.

Remember, firms like HL take between 0.25-0.75% p.a. for giving no advice. The variety of business models to suit different types of clients should not be criticised. As long as the charges are disclosed in advance and the client has a choice of method then there really is no issue.