1.5% too much to pay an IFA?

geosaver

I have just had an IFA look at handling my £800K of funds which are currently in a number of savings accounts. He said his charges are around 1.5% is that too much to pay?

jimjames

Dunstonh can probably give the considered IFA view but you may get a better deal going for a fee based adviser.

1.5%=£12,000 on a £800,000 pot. Even at £100 per hour that is a lot of hours work that they need to be able to justify. In fact that would equate to nearly a months work (120 hours) at £100 ph, is that at all justified by the level of effort put in?

EDIT - you say savings accounts, is that really the case or do you mean ISAs/investments?

Lokolo

You should ask how much it would cost to do it on a fee basis.

dunstonh

He said his charges are around 1.5% is that too much to pay?

If that is his charge is p.a. then it is three times the going rate (of 0.5%). If it is the total charges then it is typical of your normal retail fund charges (1.5% being the most common AMC). This assumes the use of funds and not discretionary portfolio management.

If that charge is a one off ad hoc amount then its too much. It should never have a need to be that high.

His view is certainly not representative of fee based financial advisers.

You mean my view is not the same as yours. Thats a long way from your claim it is not consistent with other fee based advisers. Based on my experience of what i see with other fee based advisers, it is your view that is a long way from the norm.

Lokolo

feesarefare wrote: »

But isnt 1.5% on a fee basis?

Who knows, I'm waiting for the OP to reply

missile

IMHO a good IFA is worth his fee, but it is difficult to find a good one.

Why on earth do you need an IFA to advise you on "savings accounts"?

Linton

I suggest like any other business transaction you shop around for a good quote and a supplier you feel happy dealing with.

As to the principle of paying 1.5%. That would be £12K.....

You say you have £800K in savings accounts. Let say that's got an annual return of 4% - £32K. Take away tax leaves you about £25K, assuming you arent on higher rate.

With sensible investing you could well be talking about net returns 2-3 times the after-tax savings rate, without taking high risks.

So if 1.5% is the best deal you can get you would still be in a far better position than leaving things where they are now.

missile

feesarefare wrote: »

What are you going to get for £12K ?

For example, I would have to work 66 hrs or to put it another way, nine day solid to earn a fee of that much.

£181.82 per hour? :eek: ............ you must be good :A

Lokolo

missile wrote: »

£181.82 per hour? :eek: ............ you must be good :A

Or a total rip off

Linton

missile wrote: »

IMHO a good IFA is worth his fee, but it is difficult to find a good one.

Why on earth do you need an IFA to advise you on "savings accounts"?

If the OP has £800K in actual savings accounts, wouldn't you say he/she really does need professional help?

missile

Linton wrote: »

If the OP has £800K in actual savings accounts, wouldn't you say he/she really does need professional help?

Not necessarily. 800K is small change for Carlos Slim Helu. For most of us it is certainly a lot of cash to have in savings. I suspect OP actually meant £800K in investments and savings? :think:

We do not know his situation, his attitude to risk or what percentage this is of his assets?

If OP had given some info on the return on his 800K, we would be better able to judge whether his IFA was worth his fee. I would rather pay £12K to an IFA earning me 10% than 1.2K to an IFA earning me 1.0% return.