IFA - pay fees or commission?

dunstonh

Just to give you a quick and dirty figure. I just put £200pm increasing annually though with a £600 fee or commission.

Fee option of £600 deducted from pension gave a projected value of £975,526
Commission option on a stakeholder gave £826,982 to £854,080
Fee of £600 paid by cheque gave £985,888 as best option
nil commission stakeholder gave £968,517

Nine_Lives

Some interesting food for thought there. Thanks dunstonh.

As i'm pretty immobilised after my op, i'm waiting on the missus picking me up a book from the library on pensions. It's a "which" book. No idea whether it's decent or not, but hopefully it'll help me understand this area, even if just a little.

I know it will vary from IFA to IFA and region to region, but what would a fair hourly fee be? I'm from the north west & as i say, the first chap was charging £100 per hour, which seems about average from what i've read on here - yet others on here were saying he was expensive. Or is my question pretty much unanswerable?

It's not his price that is making me seek another IFA, it's the fact i left the meeting without feeling i'd been advised.

jem16

K_P83 wrote: »

I know it will vary from IFA to IFA and region to region, but what would a fair hourly fee be? I'm from the north west & as i say, the first chap was charging £100 per hour, which seems about average from what i've read on here - yet others on here were saying he was expensive. Or is my question pretty much unanswerable?

I don't think the £100 per hour is expensive. However rather than agree an hourly fee, agree a total fee so you know exactly where you stand. Also make sure you know the amc.

The IFA should be able to give you a breakdown on all options just as Dunstonh has done.

jamesd

Dunstonh, how did fee paid by cheque come out cheaper than fee deducted from pension? Should be impossible. Did you perhaps not allow for adding the extra cheque fee cost compared to deducting after tax relief inside the pension to the pension pot?

dunstonh

jamesd wrote: »

Dunstonh, how did fee paid by cheque come out cheaper than fee deducted from pension? Should be impossible. Did you perhaps not allow for adding the extra cheque fee cost compared to deducting after tax relief inside the pension to the pension pot?

In theory, to ensure a like for like comparison, the £200pm should have had 3 months less contributions and then compared. £600 paid by cheque or £600 paid out of product is still £600 and still going to impact in the same way.

However, tell the FSA that.

Nine_Lives

As i'm a bit immobilised right now, i sent off an email to 3-4 more IFAs last night telling them my situation & asking them if they'd be able to help (as originally i contacted 2-3 IFAs at the start of the year through unbiased.co.uk & only 1 bothered to reply).

Anyway, reply from one today:

The fee to produce the fact find & report would be £300
Any initial commission from any regular savings pensions or savings plan that "we" arrange would be rebated back into the contracts as the £300 fee would cover this.

Now, i've not been given a percentage figure for comparison on the commission front (i.e. the first IFA i saw was 4%) but my understanding of this whole situation is that this second IFA is (at the moment) better, based on charges alone (obviously i can't speak on their service having never met them).
As they've given me this information BEFORE a meeting, they also seem more willing to provide information full stop (the original IFA refused this information without a meeting).

Maybe a silly question, but would you agree?

Obviously, i'd need to arrange a meeting to discuss further.

dunstonh

The fee to produce the fact find & report would be £300
Any initial commission from any regular savings pensions or savings plan that "we" arrange would be rebated back into the contracts as the £300 fee would cover this.

That is fee basis. No wishy washy other than the fact it is for the factfind and report. Was there a charge for implementation (those that use this method often have a small charge to cover that bit)?

Now, i've not been given a percentage figure for comparison on the commission front (i.e. the first IFA i saw was 4%) but my understanding of this whole situation is that this second IFA is (at the moment) better, based on charges alone (obviously i can't speak on their service having never met them).
As they've given me this information BEFORE a meeting, they also seem more willing to provide information full stop (the original IFA refused this information without a meeting).

If an adviser is talking a monetary amount then you would not expect a percentage to be applied to the amount for initial business. IFAs like people who communicate. It makes our job easier. So, seeing as this one has emailed back and so far so good, ask them if there are any other charges so you are 100% sure.

Nine_Lives

dunstonh wrote: »

That is fee basis. No wishy washy other than the fact it is for the factfind and report. Was there a charge for implementation (those that use this method often have a small charge to cover that bit)?

The information i gave in my above post is the information i received via email. There were 2 documents attached. One was a "client agreement" which i could read, but the other was titled "SCDD direct investment & pensions" which i couldn't read as it was in .docx format.

However, the information i provided is what was provided to me.

If an adviser is talking a monetary amount then you would not expect a percentage to be applied to the amount for initial business. IFAs like people who communicate. It makes our job easier. So, seeing as this one has emailed back and so far so good, ask them if there are any other charges so you are 100% sure.

Thank you. I will do.


As you say, so far so good. I get a good vibe at the moment from this IFA. Quick reply - so they're interested, and to the point & informative - which i like.

At this stage with the original IFA, i did get a quick response, but the information was hazy & when i asked for information on charges, i was told i'd "need" a meeting first.
Then when i had the meeting, one of the first things they did was to put down on the table a sheet on charges (before i provided any information). I thought at this stage - couldn't you have provided this via email when i asked!?!?




Unfortunately, that "which" book on pensions wasn't in at the library, so i may have to buy it.
That aside, i'll get back in touch & look at booking an appointment.



Is there any "key questions" or "key information" i should ask the IFA when we meet? I noticed mention of "AMC" in one of my threads - which when i looked up, i'd obviously be interested in. Anything else?

Sorry for the bombarding. I just want to be prepared for when i meet this time, unlike last time - when i was asked what i wanted to contribute i was stumped.

jem16

K_P83 wrote: »

The information i gave in my above post is the information i received via email. There were 2 documents attached. One was a "client agreement" which i could read, but the other was titled "SCDD direct investment & pensions" which i couldn't read as it was in .docx format.

Use a docx to doc converter such as this.

http://www.doc.investintech.com/

Is there any "key questions" or "key information" i should ask the IFA when we meet? I noticed mention of "AMC" in one of my threads - which when i looked up, i'd obviously be interested in. Anything else?

The amc is one of the main questions plus the total initial fee. You might also ask about costs for annual reviews but until you get your fund to at least around £20k it's probably not needed.

You might want to think about how much you feel you would need in retirement and ask about what it would take to get you to that goal.

gadgetmind

K_P83 wrote: »

the other was titled "SCDD direct investment & pensions" which i couldn't read as it was in .docx format.

I do wonder as so called professional organisations that send documents out in closed proprietary formats that don't work for many people.

PDF, guys, PDF, or if you can't manage that, RTF.