IFA charges

Rollinghome

tony1947 wrote: »

Our comparison was based on a mixture of preliminary telephone conversations and face to face meetings.

What I meant was when you said "we decided was that by comparing the IFAs performance over 5 years (after all charges)".

Where did those performance figures for 5 years come from? Were they just projections and if so what was the basis of the projections? We can assume that they don't invest every client with an identical portfolio so how would a projection relate to you?

The 1% management charge including all fund charges is a bit mysterious when you say they've invested you in cash deposits and funds if the funds are unit trusts/oeics. Typical AMC for managed UTs is 1% plus even after stripping out anything for the adviser and the TER would be higher still. Perhaps you're invested in trackers with AMCs around 0.25%? Does that mean you're being charged 1% for management of cash too?

If anyone can give cast iron rules as to how choose an IFA I am sure many readers of the forum would appreciate it.

I doubt they exist and that's one of the problems for anyone who expects superior investment performance rather than just basic advice. The problem of which investments to choose is replaced by the problem of which adviser to use when their performance record is even harder to assess. I hope it goes well for you and the total costs are as you believe.

jem16

tony1947 wrote: »

Before the responses to the questions on this thread I was certain that we would be paying 1% including fund charges but the responses did raise some doubt and so I have checked and I was correct it's 1% including any fund charges.

Your initial charge of 3% on £400k seems high but your amc is very good (dependent on funds chosen) so perhaps compensates for that - in the long run it will probably be better.

However in my opinion, you have hit the nail on the head when you say that it's the relationship with the IFA that matters a great deal and that has to be considered very valuable. Fees of course cannot be ignored completely but is only a part of the bigger picture.

feesarefare

tony1947 wrote: »

It was quite traumatic to see the wodge of cash "disappear" on setup but we decided to go ahead for several reasons.

So why the dickens did you go with them then? You obviously totally disregarded all the guidance you were given on the other threads you started.

To make it even worse you still dont seem to understand how you are paying for the ongoing management of your funds!!!

feesarefare

Rollinghome wrote: »

What I meant was when you said "we decided was that by comparing the IFAs performance over 5 years (after all charges)".

As you know, the IFA wont be able to provide that will they;)

Its a great source of amusement when I see IFAs slagging off multi-manager fund performance stats, when they have no ability/mechanism to judge their own performance. I read a recent quote from Brewin Dolphin recently saying they cant give performance figures "as every client portfolio is individually tailored" lol - i really did!

feesarefare

jem16 wrote: »

However in my opinion, you have hit the nail on the head when you say that it's the relationship with the IFA that matters a great deal and that has to be considered very valuable. Fees of course cannot be ignored completely but is only a part of the bigger picture.

Tony is lucky that he can have a good relationship with someone that robbed him of circa £9000

tony1947

feesarefare wrote: »

Tony is lucky that he can have a good relationship with someone that robbed him of circa £9000

My, my thats a bit OTT I am just glad I didn't mention the name of the company as its probably libelous as well!

The only way the rights and wrongs of our decision will be tested is over the next few years as we see how our funds are progressing compared to the somewhat cackhanded way I had been looking after them over the last few years. If the IFA beats inflation / covers any tax implications and improves on what I could have done if only by a few percentage points then we will be more than happy. For too long we have been like rabbits in the headlights..knowing we should move out of cash but too scare to do it. I am confident I made all the right decisions but will be man enough to come back on here in a couple of years time and admit it if it all goes horribly wrong.

feesarefare

tony1947 wrote: »

My, my thats a bit OTT I am just glad I didn't mention the name of the company as its probably libelous as well!

You dont think paying what equates to half a years salary for nurse for what is after all a pretty basic administration excercise as daylight robbery?

You had enough guidance on other threads regarding fees and commissions and you even posted you were glad one IFA was fee based, then you went with a commission based adviser

I am confident I made all the right decisions

Im really concerned from your earlier posts that you are not confident- you certainly are not aware of what the ongoing charges and servicing costs are going to be. If your that confident post the name of the firm .

cardsharps

cheesesarnie wrote: »

have been quoted by a local IFA charges of 3% for all funds deposited into their investment management tool

& ongoing 1.5% ish management fee.

There's only one word for this sort of thing: CRIMINAL

feesarefare

tony1947 wrote: »

Investment was 400k but this was made up of numerous types being combined and placed in new funds. E.g Pension Pots,ISAs, Cash Deposits, L&G Bonds etc.

My understanding (but I will now definitely check) is that the 1% is the overall charge including any fund charges.

Rightly or wrongly what we decided was that by comparing the IFAs performance over 5 years (after all charges) to what we had managed as amateur investors there was no comparison. If the IFAs returns similar figures as he has done in the past then I will thank him with a huge smile on my face. I won't really care what he has charged me,there is no benefit in paying small fees if the returns are small as well.

We spent a long time deciding which IFA to go with and at the end of the deliberations it was as much to do with the "gut feeling" that you have for a company just as much as the fees they charge. Its good to see Cheesarnie feels the same way about the people he is dealing with.

Had a few minutes to spare so just re reading Tony's posts to try and understand why people are prepared to pay over the odds for a service they dont understand and now I also cant see what in this post is a) usefull and b) worth thanking?

Any ideas?

jem16

feesarefare wrote: »

I also cant see what in this post is a) usefull and b) worth thanking?

Any ideas?

Personally I thanked his post as he answered my post about how much he had invested.