IFA Commission For ISA Investment

mirabell

Hi All

For the past couple of years I have been paying into a Skandia non-stakeholder stocks and shares ISA as recommended by my IFA, with a view to larger growth/returns than a standard stakeholder ISA.

However as the ISA is non-stakeholder and offers me a wider choice of invesments than a standard stakeholder ISA, my IFA is paid 3% commission taken out of the total sum invested. I have questioned this with him before and he says that I am making larger returns that otherwise because of the wider choice.

Is 3% commission okay to charge or is this excessive ? What is the norm ?
Any views appreciated.

jem16

3% is the maximum commission normally taken for investm,ents of this sort. If it's the only bsuiness you have with the IFA then it's fine as with only £10,200 being invested there is not much scope for discounts.

If it's part of a wider portfolio then it could be lower.

When you refer to stakeholder ISA are you referring to cash ISA?

Thrifty123

I work as a trainee IFA and to be perfectly honest as a general rule of thumb we tend to take 3% of the initial investment amount plus an annual fund based trail fee of 0.5% to pay for ongoing advice. If it's a long standing client then we sometimes reduce the charge, it totally depends on the advisor, the type of work done and how much time is spent on it. If client's want to be charged a fee of £150 per hour for 13 plus works or commission of 3% plus 0.5% then it's their choice, it costs our office £1000 a day just to break even and that's before any of the business partners take anything for themselves (we only employ six staff, most of it is spent on systems, regulatory fees etc)