Barclays: advise caution...

dunstonh

Question Dh - Does it cost twice as much to service a client with £200K invested than £100K invested?

How much do you charge on a £10,000 investment?

whiteflag_3

dunstonh wrote: »

How much do you charge on a £10,000 investment?

We do lifestyle financial planning not product selling, so the scenario you suggest would not happen.

I charge £180 per hour, paraplanner £85 , administration £35 .

Therefore it would be unprofitable to do a lump sum investment for £400 commission.

jem16

whiteflag wrote: »

We do lifestyle financial planning not product selling, so the scenario you suggest would not happen.

So what happens after you complete the lifestyle financial planning for a client and the client needs to invest in some way to meet their goals? Do you then not find suitable products?

Fire_Fox

I am just home from opening a regular saver account with Barclays as a new customer: NEVER AGAIN. I was in and out in an hour and a half - forty five minutes waiting which was sigificantly less than two unfortunate Barclays customers. Fell out with both the sales advisor and the assistant manager as I refused to discuss my personal life in order that they could sell me products I neither want nor need. Appalling service all round, never seen anything like it. :mad:

whiteflag_3

jem16 wrote: »

So what happens after you complete the lifestyle financial planning for a client and the client needs to invest in some way to meet their goals? Do you then not find suitable products?

yes , and a fee/commission would be agreed / accordingly .

jem16

whiteflag wrote: »

yes , and a fee/commission would be agreed / accordingly .

Not sure I'm following this.

DH asked about your charge for a £10,000 investment and you said the scenario wouldn't arise as you do lifestyle financial planning.

So if the planning pointed to an investment of £10,000 are you saying you wouldn't take it on or not?

whiteflag_3

jem16 wrote: »

Not sure I'm following this.

DH asked about your charge for a £10,000 investment and you said the scenario wouldn't arise as you do lifestyle financial planning.

So if the planning pointed to an investment of £10,000 are you saying you wouldn't take it on or not?

Sorry Jem what I meant was , I wouldnt have someone coming in and saying "ive got £10 K to invest for the long term, can I get your advice?" . We would say yes, but it would have to be part of our lifestyle planning process which will cost £x .

We dont do one off transactions. We do long term planning and charge retainers for ongoing service rather than take trail, that way our clients pay the same for the same "service" , we dont have clients with big portfolios cross subsidising clients with smaller portfolios.

We also think its better to have a clear division between planning (advice)and transactions (implementation). If the clients understand this and know they will be paying for the planning then they have peace of mind in knowing there will be not "vested interest" in selling them something.

Also we know we are getting paid with every client.

dunstonh

Whiteflag, I admire your chosen business model but it doesnt mean yours is the only one that there should be. I spent 4 hours this afternoon and I am still finishing it off now and it will pay me just £250. The person didnt want servicing and the amount isnt really worth it either so no trail is on it. An hourly fee would have been £600. Yet the transaction is saving the person over £13,000 in charges to what they had already. I have no doubt that you would have refused to deal with them based on what you have said and had they accepted your refusal as the norm and just left it they would be £13k worse off.

Trying to knock my charging structures when they are going to typically lower than yours and a lot lower than the FSA published averages, let alone the typical maximums seems daft. Knock the Towry Laws and the like with their explicit charging structures on top of trail as that is greedy. Knock the maximum commission takes on large investments as that is greedy. Knocking those that are cheaper than the average doesnt seem logical.

whiteflag_3

dunstonh wrote: »

Whiteflag, I admire your chosen business model but it doesnt mean yours is the only one that there should be. I spent 4 hours this afternoon and I am still finishing it off now and it will pay me just £250. The person didnt want servicing and the amount isnt really worth it either so no trail is on it. An hourly fee would have been £600. Yet the transaction is saving the person over £13,000 in charges to what they had already. I have no doubt that you would have refused to deal with them based on what you have said and had they accepted your refusal as the norm and just left it they would be £13k worse off.

Trying to knock my charging structures when they are going to typically lower than yours and a lot lower than the FSA published averages, let alone the typical maximums seems daft. Knock the Towry Laws and the like with their explicit charging structures on top of trail as that is greedy. Knock the maximum commission takes on large investments as that is greedy. Knocking those that are cheaper than the average doesnt seem logical.

Dh , apologies if you think I was knocking your business model, I just think I was raising a relevant point re - trail commission. I think its flawed to build a business based on an income stream you have no control of.

I find it difficult to understand why you do £600 worth of work yet are happy to accept £250 for it . How can you be profitable?

If you find our business model admirable , whats stopping you from adopting it.

jem16

whiteflag wrote: »

Sorry Jem what I meant was , I wouldnt have someone coming in and saying "ive got £10 K to invest for the long term, can I get your advice?" . We would say yes, but it would have to be part of our lifestyle planning process which will cost £x .

Ok I'm with you now. It sounds like your business model would be rather expensive for the smaller investor. Unfortunately this would push a lot of people into the hands of the tied/bank "adviser" I feel.

We dont do one off transactions. We do long term planning and charge retainers for ongoing service rather than take trail, that way our clients pay the same for the same "service" , we dont have clients with big portfolios cross subsidising clients with smaller portfolios.

Is the natural trail rebated then?

We also think its better to have a clear division between planning (advice)and transactions (implementation). If the clients understand this and know they will be paying for the planning then they have peace of mind in knowing there will be not "vested interest" in selling them something.

If a fee is agreed in advance, whether paid through commission or actual cheque I can't see what difference it makes.