1.5% too much to pay an IFA?

moshking

By the way, I slightly amended my original post as I overstated our charges.

Yikes - what's wrong with my signature? Is it not OK to put my company?

jem16

feesarefare wrote: »

I think it would be really helpful for all if you could post the basis on which your IFA transacts with you Jem.

Id be interested as well, and after all I have given the details of our business model when you asked.

My main investment was made 5 years ago when I was looking for a better home for £100k than the savings accounts it had resided in for the previous 3 years. My own pension provision was fine and I had enough savings for emergencies. What I needed was advice on tax issues and in particular IHT which, at that time, had become an issue. Basically I wanted to secure my own future and that of my sons.

With one firm I had a choice of terms at the time - either hourly rate or 1% initial with 0.5% ongoing for servicing. With another firm I was quoted 3% initial but didn't seem very interested in ongoing.

I chose to go with 1% initial and 0.5% ongoing.

Reviews are yearly but have sometimes been more frequent when necessary.

missile

jem16 wrote: »

My main investment was made 5 years ago ...... I chose to go with 1% initial and 0.5% ongoing.
Reviews are yearly but have sometimes been more frequent when necessary.

I would be interested to hear what retunr you have achieved on your investment over the 5 year period. :beer:

jem16

missile wrote: »

I would be interested to hear what retunr you have achieved on your investment over the 5 year period. :beer:

It's running at just over 31% for that part.

missile

jem16 wrote: »

It's running at just over 31% for that part.

I assume that is 31% compounded over the 5 years?

i.e. 5.55% :T

jem16

missile wrote: »

I assume that is 31% compounded over the 5 years?

i.e. 5.55% :T

You assume correctly.

jem16

feesarefare wrote: »

Is it a complete financial review or just a valuation and some fund switch recommendations?

It varies.

Sometimes it's just fund switch receommendations, other times it's a financial review as circumstances have changed.

jem16

feesarefare wrote: »

So how does your IFA justify that he gets his 0.5% irrespective of what he does for you?

In much the same way that you justify your ongoing fees I would imagine.

jem16

feesarefare wrote: »

I suppose for you its a bit like having a "fixed" price contract for your car maintenance, yet sometimes you get a full service and other times they just put air in tyres and you dont really know when your going to get what.

I see it more like my energy plan - sometimes I use more than other times. Over the course of time I get what was agreed when I signed up.

It would bug me if I was only ever getting air in my tyres and someone paying the same was getting a full service everytime.

It would bug me more if I felt I was paying for something to be done that really didn't need doing in the first place.

jem16

feesarefare wrote: »

It would bug me if I crashed because my brakes failed because the garage just kept filling my tyres and thought I was aware my brakes were on the way out.

I wouldn't have crashed though because my brakes would have been done as my garage does what is necessary when it is necessary.