IFA charges. do these sound ok?

feesarefare

2% of funds taken under management

£5k! :eek: Thats a massive amount for the work involved.

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yearly charge 1.75% max. This is broken down as follows:- 0.75% annual advice fee

You'll need to post more detail. What is your adviser's annual advice fee covering, what are they doing for a round £2k per annum? Have a look at their client service agreement, it should outline what they are going to do for you each year , then you should be able to work out if its value for money.

cardsharps

grumpycrab wrote: »

- 2% of funds taken under management
- yearly charge 1.75% max. .

These charges are mad. Could you not do it yourself and save yourself a small fortune?

And what exactly are you paying them for? Guesswork? Your guess is just as likely to be correct as theirs.

feesarefare

cardsharps wrote: »

And what exactly are you paying them for?

Rather disappointingly the OP has gone quiet on this one. Hopefully they are just awaiting an answer from their IFA in repsonse to our questions.

grumpycrab

grumpycrab wrote: »

- 2% of funds taken under management
- yearly charge 1.75% max. This is broken down as follows:- 0.75% annual advice fee and fund management charges will be between 0.25% and 1% depending on the funds they select for us; this latter charge is TER.

feesarefare wrote: »

You'll need to post more detail. What is your adviser's annual advice fee covering

feesarefare wrote: »

Rather disappointingly the OP has gone quiet on this one. Hopefully they are just awaiting an answer from their IFA in repsonse to our questions.

Sorry - I'm not ignoring you - just learning. The "0.75% annual advice fee" provided an annual meeting, valuation and fund switch recommendations. I have informed this IFA that I've been talking to other, smaller IFAs, and he's suggested that he could put a portfolio together with an "annual management charge" close to 1%. But I assume he meant this was the charge was for the funds taken under initial management. It doesn't take much to confuse me as you can see. I'm unlikely to use them.

feesarefare

grumpycrab wrote: »

Sorry - I'm not ignoring you - just learning. The "0.75% annual advice fee" provided an annual meeting, valuation and fund switch recommendations. I have informed this IFA that I've been talking to other, smaller IFAs, and he's suggested that he could put a portfolio together with an "annual management charge" close to 1%. But I assume he meant this was the charge was for the funds taken under initial management. It doesn't take much to confuse me as you can see. I'm unlikely to use them.

Thanks for your quick reply!

Two points-

Fee based annual review as described above assuming adviser rate of £200ph

Valuation £20
Prep 1 hour £200
Meeting 1 hour £200
Implementation £ 50
Letters etc £ 50
Total £520

Hope this helps you decide whether 0.75% is value for money.

Its also interesting that now you have queried the charges thay have suddenly managed to do things cheaper. No wonder the FSA needed to bring in "treating customers fairly"