IFAs & Fees

saintbert

Good Day to you all,

I am a new user & this is my first post ......

The question I have is concerning IFAs fees & what is reasonable & the norm.

I have had an initial interview with an advisor from a 'big' company and am waiting for their advice on a portfolio - all free up to now & no charges until (& if) I accept. The advice covers investing a lump sum (from a pension) to give access, income & growth and their charges are 2% of the capital invested for income & growth with ongoing annual fees of approx 1% of the capital. How do their charges compare & do you recommend this type of service, I have no real experience of savings & investment?

Thanks

dunstonh

I have had an initial interview with an advisor from a 'big' company

Thats probably the first mistake. A salesforce adviser (whether tied or independent) will come with a sales mentality and an environment of league tables and incentives.

their charges are 2% of the capital invested for income & growth with ongoing annual fees of approx 1% of the capital. How do their charges compare

Its middle of the road as far as charging goes. Its closer to the new model basis but some way from the 1% plus 0.5%p.a. ongoing which you get with a true new model adviser.

do you recommend this type of service, I have no real experience of savings & investment?

Yes. If you dont know what to do then getting a fixed price advice, irrespective of product, fund, provider or tax wrapper is the best way to go. IFAs that handle portfolios do tend to give a much better quality of advice than those that may focus on mortgages more than anything else. Only thing I would comment on is that you can get it cheaper without a loss in quality. However, you wont get it cheaper from a big company.