Do i have a complaint against IFA?

dunstonh

Would it have been possible for the IFA to charge 6% on UT's? That seems high when you look at the initial charges at places like H&L now.

Yes. You can get upto 6.5% even today if they went max commission. HL are not IFAs in respect of what they offer. They are a product provider. The initial charge is irrelevant in this respect as you cannot compare the cost of a non-advice, execution only product provider vs a full advice recommendation that includes the cost of advice.

He wasn't a hight rate tax payer at the time - I think he said his income was 25K in the meeting. I'm not sure what the higher rate then but would have thought 40K+?

Did he know if he was going to become a higher rate taxpayer?

Complaints on tax wrappers have been made before and succeeded. However, typically, its only when ISAs have not been used as the difference between bond and UT is often not that great (as already mentioned). If the adviser recommended S&S ISAs and then bond with the rest then there isn't much chance of success. If no ISA was recommended then there is a very good chance of success.

Texas_Pete

dunstonh wrote: »

Yes. You can get upto 6.5% even today if they went max commission. HL are not IFAs in respect of what they offer. They are a product provider. The initial charge is irrelevant in this respect as you cannot compare the cost of a non-advice, execution only product provider vs a full advice recommendation that includes the cost of advice.

Not Knowing exactly how these fund allocations are made would it fair to guess there is some sort of computer program involved in choosing funds and allocations?

So H&L are execution only brokers so you've no come back if you invest 100% of your cash in some fund that loses all your money?

dunstonh wrote: »

Did he know if he was going to become a higher rate taxpayer?

Complaints on tax wrappers have been made before and succeeded. However, typically, its only when ISAs have not been used as the difference between bond and UT is often not that great (as already mentioned). If the adviser recommended S&S ISAs and then bond with the rest then there isn't much chance of success. If no ISA was recommended then there is a very good chance of success.

I very much doubt he knew he was going to become a higher rate tax payer. I think he got a new job a couple of years later.

I'm not sure if the ISA was mentioned - I'll check if it was or if he had used his allocation for that year already.

Thanks for the help.

jimjames

Texas_Pete wrote: »

So H&L are execution only brokers so you've no come back if you invest 100% of your cash in some fund that loses all your money?
.

Absolutely. Its entirely your own choice and your own responsibility. Some people prefer that, others prefer to have someone else to make the choice for them.

Personally I prefer to make my own mistakes and learn from them:)

dunstonh

Not Knowing exactly how these fund allocations are made would it fair to guess there is some sort of computer program involved in choosing funds and allocations?

IFAs have access to that sort of data, yes.

So H&L are execution only brokers so you've no come back if you invest 100% of your cash in some fund that loses all your money?

Correct. They do what you say and offer no advice.

I'm not sure if the ISA was mentioned - I'll check if it was or if he had used his allocation for that year already.

That is the key area.

dunstonh

Are you sure? As a fee based IFA im not up to speed on the latest commission rates so i would be interested to know how you can get those deals.

I'm fee based but still know the commission rates. After all, when you are rebating commission, that can impact on the chosen provider. Especially if you have enhanced terms over the standard.

Sterling are paying 6.5% on unit trusts by indemnifying the natural trail (much in the same way as bonds).

jem16

agrinnall wrote: »

Reported as spam, the other 17 posts are pushing the same thing.

Perhaps you can remove the spammer's quoted post from your post now that the spammer's post has been removed. Otherwise they are achieving their objective.

Texas_Pete

CleverWithMoney wrote: »

Darkpool : Not all IFAs are the same. Some of us take the Adviser bit of IFA very seriously and have the qualifications to prove it. I hope that Texas Pete and his Dad will not be put off using an IFA in the future.

Most investment bonds are segmented (think of an orange) so an £80k investment could have been set up as 80 segments of £1000. Doing it this way can sometimes help to reduce the tax bill by cashing in some segments rather than making a withdrawal from the whole investment.

To be honest I wouldn't use an IFA for this type of advice. I can't see how the initial costs taken from the investment can prove worthwhile for this type of advice.
I think the removal of the title of IFA from those selling commission based products/advice will probably help enhance the reputation of those providing a good fee based service. I'm sure i read somewhere the FSA planned to introduce this?

The investment bond was made up of segments though the default position from Skandia is they will part cash in all 80 segments rather than fully cash 32 segments if you request a £32000 withdrawal. I'm not sure i understand the logic here?

Texas_Pete

jimjames wrote: »

Absolutely. Its entirely your own choice and your own responsibility. Some people prefer that, others prefer to have someone else to make the choice for them.

Personally I prefer to make my own mistakes and learn from them:)

I think this is the route i would take though probably be considering ETF's over UT's.

Seeing as nobody can predict performance it seems a large % of your investment to give away for this type of advice.

dunstonh

The investment bond was made up of segments though the default position from Skandia is they will part cash in all 80 segments rather than fully cash 32 segments if you request a £32000 withdrawal. I'm not sure i understand the logic here?

You can ask them to only cash in a certain number of the policies and therefore you only create a chargeable gain on those policy segments rather than the whole lot.

To be honest I wouldn't use an IFA for this type of advice.

Advice such as only cashing in from a certain number of the policy segments and therefore creating a lower tax bill?

Texas_Pete

dunstonh wrote: »

You can ask them to only cash in a certain number of the policies and therefore you only create a chargeable gain on those policy segments rather than the whole lot.



Advice such as only cashing in from a certain number of the policy segments and therefore creating a lower tax bill?

Yeah i knew this.

I was just making the point that the default position of skandia is to cash in parts of each policy as opposed to a number of individual policies.

You could argue that this could be a reason not to recommended this sort of product in the first place? I doubt further advice is going to be free after the initial advice?