IFA costs - is this right?

dunstonh

and I've no problem with paying more in management charges for better performing funds (which is what made me select Winterthur over NU).

NU have an equally good range of external funds and some of their internal funds are highly regarded. I would have chosen NU over Winterthur if it was a toss up between these two. NU would have offered the lower charges. Although I wouldnt pick either based on what is available post A day.

If the IFA is letting you pick provider then he is acting like a tied agent and not a proper IFA. I tied agent is there to put options in front of you and let you decide. An IFA is there to make a solid recommendation to you based on your situation. It is common for new IFAs or those operating under a salesforce run by ex insurance company staff to get their IFAs to act like tied agents in the misbelief that if the client picks the contract, it reduces their liability.

I suspect he's decided to include a fee as well as commission, and trail commission, in his payment and has not told me the full story.

He cannot just include things without you being made aware. Check the illustration you were provided with. All charges and disclosure of commission is shown in there.

That said, if he has taken 50% of the first years contributions, then that is greedy. Although if this is offset against lower annual managment charges over the term, then it can be better value. Quite a few pension contracts have an initial charge again but have lower annual charges which makes them good value over the term but appear less so in the early days.

whiteflag_3

He cannot just include things without you being made aware. Check the illustration you were provided with. All charges and disclosure of commission is shown in there.

Winterthur application forms include an "adviser remuneration" agreement that the client has to sign before the application is processed. The client is signing to say they understand how the adviser is being paid and agree to the level of renumeration being taken.

Why would someone sign if they (a) havent had the remuneration explained and (b) dont understand it?

MarvinWantedMore

The document I have says "flexible commission" - which I understand to be fees/commission/or both. So it doesn't really tell me anything other than the amount.

And as my IFA seems to have gained most of his experience during the misselling boom, I wouldn't be surprised if a few of his old habits have yet to be exorcised!

I'll just have to get him to spell it out for me - exactly how is that £1750 advisor remuneration made up.

Thanks for your comments and I'll let you know how it turns out....

jamesd

MarvinWantedMore, you might also look into alternative ways of buying the product. Then allow for the advice you're actually receiving from the current way and see if it appears worthwhile.