IFA - pay fees or commission?

dunstonh

Extrapolating out £200 a month over multiple decades to get to near a million after compound growth doesn't address the point which is that many people simply won't pay £600 for a £100 a month investment as per the OP.

Yet they pay more in charges going with commission options. It will take some educating and time but it wont be an issue. Since I went fee based, I have not yet had anyone not understand the benefit of paying explicitly.

Where is average Joe, the £25k a year guy, going to find £600 to pay someone to start a pension for him ?

he doenst need to. The £600 can be paid to the adviser over time. i.e. over the first 12-24 months.

It is with some irony that front loaded charging is coming back after it was considered bad in 90s and almost abolished in 2001 when mono charge killed off the large salesforces. Whilst salesforces have their faults, they did manage to get people to save and start pensions. The agent calling round each year to get you to top up or on birthdays to start 18 year olds on a savings plan or a pension vanished overnight.

The Govt thought that people would buy these things without the rep. They got it wrong and the figures show it.

jem16

property.advert wrote: »

http://www.software4students.co.uk/Microsoft_Office_2010_Professional_Plus-details.aspx

£37.89 for 2010 Microsoft products and no, you don't have to be a student yourself.

No but you would have to be the parent, grandparent or guardian of a student. Teachers would also qualify.

Who can buy software at Software4Students?

Primary and Secondary students: All currently registered students of primary and second level schools in the UK

University and college students: All currently registered students of universities and colleges in the UK

Parents, grandparents and guardians: If you are a parent or guardian or have a grandson or granddaughter for whom you would like to license the software, then you can purchase the software. The main requirement to purchase is that the end user licensee must be a student or be a faculty member in one of our listed educational institutions.

Teachers: Teachers employed by an accredited primary or secondary school, or a public or private university or college

Nine_Lives

It's not that i wont pay £600 for investing £100pm, it's that 1) i wont pay £0.01 if i feel like i'm not getting advice and 2) i want the best price for the advice that i need.

If i can get my Stella Cidre at 3 for £5 in Sainsburys, but it's £2.14 in Asda for 1, then i'm buying the same product (i.e. getting the same advice) but one of the options is cheaper than the other - which is what i want ... the cheaper option).

The first IFA i saw refused to give me charges information via email & would only give this in a meeting - which he gave me before i offered any info on myself (i.e. he could've done it over email after all). I also left the meeting feeling that i had received no advice at all. Everything was essentially "tell us what you want us to do and we'll do it. The choice is all yours". That's great - but i don't know where to begin, so how can i advise someone what to do for me if i don't know where to BEGIN?!

FFWD to yesterday - i got in touch with 3 more IFAs where only 1 has replied. I gave information about myself & what i want. I asked if they'd be interested in helping me. This chap replied with a yes & volunteered information about his charges. This is a positive to me - i don't need someone who's secretive dealing with my money. I need someone willing to communicate.

I don't (or didn't) know what's a reasonable charge, which is a reason why i'm here on MSE. For all i knew £1k could be reasonable for my situation.







Regarding the MS Office - my sister is in education. She's 20 & in her final year on a childcare course. Would she/i qualify under this basis? what i want to avoid is paying for it, only to not meet/pass any "checks" & have then squandered £40.

Meeper

i want the best price for the advice that i need

Cheapest isn't always best. If the advice is, for example, that the most appropriate vehicle for you is an offshore investment bond, it's not as simple as that. The adviser's assessment of your attitude to risk will differ from one to another, as will the asset allocation which comes from the assessment. The the choice of funds to fit in with that allocation will differ again, all within the confines that you need an offshore bond.

There are lots of variables to take into account, and for me, what you are asking for is a little simplistic. I don't like the FSA's determination that an explanation of fees and charges should be given in advance, because everyone's circumstances are different and individuals require a different solution which takes more or less time than the next man.

gadgetmind

Meeper wrote: »

Cheapest isn't always best.

And neither is more expensive.

Sadly, we have an information asymmetry, which often leads to a "market for lemons".

http://en.wikipedia.org/wiki/The_Market_for_Lemons

Read the section of criteria and see which might or might not apply to financial advice.

Meeper

Nice article.

I don't consider point 1 to be true, as there is enough information readily available these days for people to be able to assess a product's value, should they be so inclined.

Point 2 is an interesting one and I concede that there have been many instances in the past where this has been the case, however please concede for your part that this is reducing over time and the changes which are occurring in the industry (RDR and other changes) are reducing this factor.

Sellers of financial advice have plenty of disclosure technology and are able to produce evidence of their research should it be required. Don't think this part applies.

Point 4 is similar to point 2 in many respects. However, it is true that the public is distrustful and skeptical about dealing with advisers due to the issues of the past (endowments, etc)

Point 5 is valid. There is not enough promotion of our industry by either our professional bodies or the government.

gadgetmind

Meeper wrote: »

I don't consider point 1 to be true, as there is enough information readily available these days for people to be able to assess a product's value

If someone can accurately assess the value of financial advice, then I'd argue that they don't need it!

please concede for your part that this is reducing over time and the changes which are occurring in the industry (RDR and other changes) are reducing this factor.

But banks also give financial advice!

Sellers of financial advice have plenty of disclosure technology and are able to produce evidence of their research should it be required.

But is it credible? Even back in the 80s, I had pensions salesmen pop along with graphs the carefully compared their pension to another over a carefully chosen perios.

Nine_Lives

You're both correct (but at the same time - i never said cheapest or most expensive was best).

If the IFA is offering a "fair" price, and puts the information across in a manner i can understand & i feel happy with the way the meeting went, then that's what i'll go with (i understand there's flaws here - as someone not "in the know" could easily be bamboozled by someone who is, and what they think they then understand, may not be accurate).

Another IFA could offer a fair price also, but be secretive with their information & not really advise the way i want (maybe because they don't want to be blamed if i pick their suggestion & it doesn't work out so well) - this is the type of IFA i wont be going with.

jem16

K_P83 wrote: »

Regarding the MS Office - my sister is in education. She's 20 & in her final year on a childcare course. Would she/i qualify under this basis? what i want to avoid is paying for it, only to not meet/pass any "checks" & have then squandered £40.

You would be better asking the question of software4students but if she is a student then I don't see why not. She has to be the end user though so the software is for her and not you.

There are no offical checks done but you do need to register and the school/college/university must be on their list. You must also agree to the T&C where you agree to being eligible.

Perhaps read the FAQs.

http://www.software4students.co.uk/FAQ.aspx#q4

Nine_Lives

I've taken the punt.

I'm running Win7 64bit, but i bought MS Office as media - so it'll be 32bit that is sent out.

It can be installed on my sisters machine (as she used MS Office a lot for her college work).
I'll also use it on my machine.

The only thing is, with my machine, there's one "machine" as such, which houses 2 HDDs (in fact it houses 2HDDs, 1 of which is partitioned into 2 and 1 SSD), but as far as operating systems go - there are 2.

All the hardware is the same (it's all connected up within the 1 machine) - and is all linked to the same MOBO, same peripherals, same everything.

I wonder whether it'll be able to be installed on both HDDs therefore. Only 1 way to find out i guess.

Hopefully it'll all run smoothly.



Back on topic though, i sent contact back to that IFA asking for a date to meet. Hopefully they'll get back to me.