We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Independent Financial Advisers fees vs Novice Investor!
Options
Comments
-
Wasting your time Totton. Look back over this thread and others to discover that darkpool has no in depth understanding of the markets, investment products, or the financial services environment in general but makes baseless attacks then tries to wriggle away when cornered.
See the previous page or two as an example.
He pilloried IFA's for taking "about 3%" from people's investments, saying that an investor who wanted to make 5% would need to make 8% with the IFA involvement. Not so, because as dunstonh pointed out, the IFA only receives 0.5% of this, or 1% at most. The remainder of the fees (of which 3% per annum is EXCEPTIONALLY high, by the way) would go to the wrap or platform provider for the service that they provide, the fund managers for the service that they provide, and so on. He declares IFA's to be restrictive to work with due to this, but without any real understanding of the role of the IFA and how much we actually get paid.
The guy is a waste of time to respond to, just leave him be to get on with living in his own little fantasy world.I am an Independent Financial AdviserYou should note that this site doesn't check my status as an Independent Financial Adviser, so you need to take my word for it. This signature is here as I follow MSE's Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
He pilloried IFA's for taking "about 3%" from people's investments, saying that an investor who wanted to make 5% would need to make 8% with the IFA involvement. Not so, because as dunstonh pointed out, the IFA only receives 0.5% of this, or 1% at most. The remainder of the fees (of which 3% per annum is EXCEPTIONALLY high, by the way) would go to the wrap or platform provider for the service that they provide, the fund managers for the service that they provide, and so on.
The guy is a waste of time to respond to, just leave him be to get on with living in his own little fantasy world.
Oh dear that seems to have put an end to the debate!
The bit I don't understand (probably quite a lot actually!) is that my IFA is charging 3%, not .5%.0 -
-
Your IFA is taking an initial fee of 3% and an annual fee of 0.5% - actually the £43.34 that you stated for renewal commission works out at 0.4% as opposed to 0.5%.
Isn't that what I've just said.
However in the original quote 'as dunstonh pointed out, the IFA only receives 0.5% of this, or 1% at most. The remainder of the fees (of which 3% per annum is EXCEPTIONALLY high, by the way) would go to the wrap or platform provider for the service that they provide, the fund managers for the service that they provide, and so on.'
My IFA get's the 3% doesn't she? not .5% or 1% as Dunstonh says.0 -
Isn't that what I've just said.
No it isn't.However in the original quote 'as dunstonh pointed out, the IFA only receives 0.5% of this, or 1% at most.
That is correct.The remainder of the fees (of which 3% per annum is EXCEPTIONALLY high, by the way) would go to the wrap or platform provider for the service that they provide, the fund managers for the service that they provide, and so on.'
You haven't actually said what annual management fees you are paying for your funds.My IFA get's the 3% doesn't she? not .5% or 1% as Dunstonh says.
You are getting the commission payments a bit mixed up.
Your IFA is taking an intial commission of 3% for her advice and placing of the investment. This is a one-off charge.
Your IFA is also going to receive 0.5% pa trail (renewal ) commission. This trail commission comes out of the total annual management charge that you pay for your funds.
The rest of the annual management fees that you pay will go to the provider and the fund manager. You haven't told us what these are. These charges will have to be paid for funds whether you use an IFA or not. If you bought funds DIY, all you would save would be 0.5%pa.0 -
No I don't have to consider average fund performance when deciding whether to invest in a fund
So, what do you consider? Past performance? Good luck with that, because the evidence shows that you'll need it.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
as dunstonh pointed out, the IFA only receives 0.5% of this, or 1% at most.
Only 0.5%? 1% at most? Sorry, but these strike me as being massive amounts to part with on an annual basis, and it really isn't necessary for anyone to pay this.The remainder of the fees (of which 3% per annum is EXCEPTIONALLY high, by the way) would go to the wrap or platform provider for the service that they provide
THREE PERCENT! Sorry, but that's utterly mad. People need to ensure that their TER+platform comes to way less than 0.5% pa.
Why on earth would someone pay more than this?I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
gadgetmind wrote: »THREE PERCENT! Sorry, but that's utterly mad. People need to ensure that their TER+platform comes to way less than 0.5% pa.
Why on earth would someone pay more than this?
For a chance to beat the index....?
Not everyone is a boring so and so.
(I wasn't sure if your post was aiming that no funds should charge, or that everyone should only ever go to trackers...)0 -
gadgetmind wrote: »Only 0.5%? 1% at most? Sorry, but these strike me as being massive amounts to part with on an annual basis, and it really isn't necessary for anyone to pay this.
It's not necessary for some to pay this as they are quite happy to DIY. For others they would lose more than that by making a total mess of it all. For others they are quite happy to pay someone else to do this so they can get on with other things.THREE PERCENT! Sorry, but that's utterly mad.
OP hasn't actually told us what the amc is for her funds.People need to ensure that their TER+platform comes to way less than 0.5% pa.
Why?Why on earth would someone pay more than this?
So you would rather have a return of 2.6% with charges of less than 0.5% than a return of 5% with charges of 2.5%?0 -
darkpool has no in depth understanding of the markets, investment products, or the financial services environment in general but makes baseless attacks then tries to wriggle away when cornered.
Perhaps we all need to avoid arm waving and name calling and instead used evidence-based arguments.
Evidence is good. We have lots of historical data, we know how UTs/funds have performed versus trackers, we know what percentage of funds fold every decade, and we know what the fees for actively managed funds are.
We can also model the "drag" that 4% to 5% up-front charges will cause, and how 0.5% to 2% annual charges will hobble long-term gains.
Anyone with an in-depth understanding of the markets, investment products, and the financial services environment will know that you need a balanced (and rebalanced) portfolio of assets, in as low a fee environment as you can achieve.
If an IFA can deliver this, then great, if they can't, then where is their value add?I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.2K Banking & Borrowing
- 253.2K Reduce Debt & Boost Income
- 453.7K Spending & Discounts
- 244.2K Work, Benefits & Business
- 599.2K Mortgages, Homes & Bills
- 177K Life & Family
- 257.6K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards