IFA Advice - Commission based?

JerryC

I am currently thinking of using Bestinvest and have been looking into their offering. With £120,000 the OP could access their advisory service (initial portfolio advice and annual reviews) for the cost of just the trail commission on active funds. No initial fee and (currently) £300 cash incentive. Total Expense ratio's come out arround 1.6% - 1.7% on a typical portfolio of active managed funds but could be lower if the portfolio contains low cost funds or Vanguard trackers (which will be availavble on their advised portfolios from November).

Their charging structure will have to change with RDR, but they tell me typical client't total expense ratio's will not increase post RDR.

qpop

I think if you wanted to go down the advice route you'd be better served actually having an IFA contact. the difference between that and best invest may be 2% initial fee, but it sets up a relationship that's more than just transactional (all that Best Invest will do)

darkpool

Linton wrote: »

Do you understand bonds????

There are many sorts....corporate bonds can give you much higher returns, index linked gilts provide the only guaranteed way of getting full index linking. Normal gilts provide safety in troubled times.

I believe bonds should appear in most serious portfolios.

ehhmmm why should i buy bonds when i can make more money elsewhere at lower risk?

there are other ways of having a secure income stream over the next decades that dont involve bonds or gilts....

darkpool

qpop wrote: »

It's a shame that darkpool feels the need to make sweeping statements about an industry he clearly doesn't fully understand, and it's a shame that, every time, like clockwork, one or more of the IFA community here rise to it.

Can't we all just be friends?

yeah, if only the IFA community would admit that the fees paid by investors are much higher than the advertised TER

so what do you think an investor with 120k will pay a year in fees? its certainly a lot more than 1%

Linton

darkpool wrote: »

yeah, if only the IFA community would admit that the fees paid by investors are much higher than the advertised TER

so what do you think an investor with 120k will pay a year in fees? its certainly a lot more than 1%

But the point is that the investor wont directly pay anything in fees - the published returns are after charges, they are what an investor would get.

Perhaps you shouldnt shop in Tesco - they take something like 7% in "fees" on everything you buy.

qpop

Linton - stop feeding the trolls

darkpool

Linton wrote: »

But the point is that the investor wont directly pay anything in fees - the published returns are after charges, they are what an investor would get.

Perhaps you shouldnt shop in Tesco - they take something like 7% in "fees" on everything you buy.

my gripe with the fund industry is that they hide the real fees, the OP will likely pay 4% a year on the portfolio. a lot of money for something not that hard to do.

at least with tesco you can see the products/ service they provide. with the investment industry they imply they can outperform the markets, but the sad truth is that most people would be better with a tracker.

darkpool

qpop wrote: »

Linton - stop feeding the trolls

another sweeping generalisation is that the fund industry don't like discussing the effectiveness of the service they provide for their punters.

qpop and the three people that thanked him for his comment work in the IFA/ fund industry......

qpop

darkpool - I hope that you take heed of this and act with some decorum.

I'm not going to enter into an argument with you about the way the investment industry is set up. I could, and I'm sure it'd be very entertaining for everybody, but all it will result in is a lot of wasted effort on both our sides.

You obviously have some deep-seated issues with the way the industry works, which may well be understandable. I don't know, and I'm not interested in your past experiences. What I am interested in is the reputation of this board (and all of MSE's boards) as being probably the single most useful place people can come and ask questions online and get a wealth of answers from people from all walks of life.

I think your near-constant rebuttal of anybody suggesting OEICs, IFAs, or any other three or four letter acronym, is both tiresome and offputting to people. I think if a single person decided not to bother posting up a question based on one of the various spats between you and other members of the board, who all take time out of their day (just like you do) to try and help people out who have questions, then you're doing a great dis-service, as are people that get drawn into the cyclic arguments.

Those are my thoughts.

Constructive debate = good, healthy
Keyboard warriorism = dull, repetitive, damaging.

This equally applies to myself at times (2sides2everystory comes to mind) and all of the people on the other side of the fence from you.

darkpool

qpop wrote: »

I think your near-constant rebuttal of anybody suggesting OEICs, IFAs, or any other three or four letter acronym, is both tiresome and offputting to people.

I do have extensive experience of investing. IMHO the "service" provided by the financial industry is not worth the fees they charge. This is a money saving website, if people can save a 4/ 5/ 6 figure sum in annual charges they should consider doing it.

Obviously being an IFA you'll see the situation differently.