Suspicious about FA

dunstonh

Sorry really green about the ears on this but where would I find a new model adviser.

We are in the minority of advisers. I would say 10-15% of IFAs work on new model basis only. In my county, I only know of myself and one other IFA firm that work on new model basis.

Also we have a Company Pension of which both my husband and I are Directors. We pay over £500 a month each. Does anyone think that we should not be doing this.

It could be right, it could be wrong. There could be good tax reasons for doing it and having both of you on pensions is the right way to do it. No point having it lop sided in one name.

I was a bit dubious as we are both on the same scheme and would like to spread the risk a bit.

There are thousands of investment funds out there so spreading the risk is done on the investment side, not the provider side.

Tiggs_2

dunstonh wrote:

It has been reported that the FSA want to investigate all commissions over £10,000 with a view to them breaching the TCF rules.

any more details on this? i have a number of cases each year that exceed £10k so would be interested in the FSA's plans.

dunstonh

any more details on this? i have a number of cases each year that exceed £10k so would be interested in the FSA's plans.

It came from Sesame compliance. Apparantly they wanted the networks to report on commissions over £10k and phone up the clients to ask why they had agreed to a 10k plus commission when the could have paid on fee basis and got better terms and why the adviser hadnt told them that.

Sesame have refused to comply and are arguing that the choice to go with fees or commission is made at the beginning of the process in complaince with FSA rules. Dont know about other networks though and I cant see how the FSA could enforce that sort of thing with directly authorised firms.

Tiggs_2

FSA does seem to go around the houses to get where it wants to!

It should be an FSA requirement that EVERY case file includes a signed Key Facts from the client and SIGNED quote...........then the FSA can sod off as the clients will be in no doubt as to what they have (or shouldnt be)

As it is now it seems many advisers dont bother with half the paperwork they should....resulting in nonsense like this. Need to clamp down on step 1 of the sale......not stick their nose in once the deal is done.

whiteflag_3

Tiggs wrote:

i have a number of cases each year that exceed £10k so would be interested in the FSA's plans.

Tiggs

What kind of cases generate in excess of 10K commission?

How do you justify it to your clients?

Look forward to your response!

Chrismaths

I suppose if you were advising on a £3m estate that was due to pay £1.08m in tax, then a £10,000 fee would be small beer.

dunstonh

Although the 0.5% on a 3 mill case would be very attractive to the adviser as well.

whiteflag_3

Chrismaths wrote:

I suppose if you were advising on a £3m estate that was due to pay £1.08m in tax, then a £10,000 fee would be small beer.

Obviously, Tiggs doesnt want to confirm or deny whether the above may be the case!

defender_of_the_weak

Suzy

largish regular premum contracts for directors pensions are generally very expensive with up to 50-60% of the annual premium being taken in initial commision dependent upon age of plan and you and your husband. This an also apply to any increases.

Directors pensions should be set up with a modest initial regular premium or the minimum (which for these plans was generally higher than personal pensions) and as the end of the tax year for your company approaches you add in single contributions which attract 3% commission