MSE News:

thelawnet

So what's going to happen to the horrible and anti-consumer scam of OEIC/UT charges?

To take an example:

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/j/jupiter-china-accumulation

Sell : 76.19p | Buy : 81.20p
Fund manager's initial charge 5.25% HL initial saving 5.00% Net initial charge 0.25% Dealing charge Free Fund manager's annual charge 1.50% Performance charges No Total Expense Ratio 1.78% HL annual saving 0.10% 2 Platform fee Free
The buy and sell price reflect both the cost of creating and destroying charges, but also a commission of some percentage (is it 5.25%?)? The claimed discount just means HL don't take the commission, or not all of it. It's possible that they are taking 0.25% (5.25% - 5%) here, but maybe this is going to the Fund Manager? Who knows?

Then the 'Fund Manager's Annual Charge' of 1.5% is not really the Fund Manager's Charge at all. Some of that is going to Hargreaves Lansdown. How much, I don't know. But I believe they get a platform fee and an 'advisor's commission' as well. Which is obviously nonsense. Is this scam going to be stopped, so we can truly see what's going on?

gadgetmind

Aegis wrote: »

The diploma level qualifications (QCF level 4) are the new minimum and represent the same standard as a first year degree. The advanced diploma is level 6, the equivalent in difficulty of a bachelors degree.

I employ a lot of grads, and see a wide variety of levels of smarts and skills despite the impressive paper they all clutch.

Where do IFA qualifications go above that level 6 status because I think I'd be wanting rather more than that before signing any large cheques.

Aegis

gadgetmind wrote: »

I employ a lot of grads, and see a wide variety of levels of smarts and skills despite the impressive paper they all clutch.

Where do IFA qualifications go above that level 6 status because I think I'd be wanting rather more than that before signing any large cheques.

I think there's a masters degree in financial planning out there somewhere, but it's not on my "to do" list so I don't know much about it. Personally I plan on taking enough of the level 6 qualifications to become a Fellow of the Personal Finance Society, together with Chartered status. Other than that, I plan to keep learning informally and doing what's required to stay well ahead of the requirements.

I imagine there are still quite a lot of advisers who will stick at level 4 for the time being, but I suspect they'll regret that when the next round of regulatory reviews of qualification levels are done.

Pincher

I would love to hear a happy customer story who had £10,000 to invest, paid £250 fee, and is really happy with the result.

Does such a story exist?

dunstonh

Pincher wrote: »

I would love to hear a happy customer story who had £10,000 to invest, paid £250 fee, and is really happy with the result.

Does such a story exist?

Of course it does. The millions of transactions done with only around 3000 complaints a year to the FOS would indicate satisfaction by the majority.

Media focuses on doom and gloom. Internet discussion tends to focus on negative.

gadgetmind

Pincher wrote: »

Does such a story exist?

In a strong bull market, an up-front fee of 2.5% (or even 5%) can be hidden, and 1.5% AMC and 0.5% trail is just noise, but over the long-term and multiple market cycles, they are a serious drag on performance.

High-fee investing is like a slow and polite mugging.

Fortunately it's now entirely voluntary.

jamesd

thelawnet wrote: »

Then the 'Fund Manager's Annual Charge' of 1.5% is not really the Fund Manager's Charge at all. Some of that is going to Hargreaves Lansdown. How much, I don't know.

Between 0.7 and 0.8% goes to HL. Closer to 0.8 than 0.7. A bit less with the ISA and its commission rebates (the "Loyalty Bonus") and a bit more with the SIPP. HL won't disclose the actual amounts for each fund.

scotsbob

dunstonh wrote: »

Of course it does. The millions of transactions done with only around 3000 complaints a year to the FOS would indicate satisfaction by the majority.

That is a typically glib insurance salesman's answer, which avoids the question. No wonder there is so much distrust of salesmen.

Pincher asked "I would love to hear a happy customer story who had £10,000 to invest, paid £250 fee, and is really happy with the result." I would too, just one.

gadgetmind

jamesd wrote: »

HL won't disclose the actual amounts for each fund.

Soon they will have no choice, and whether I leave the S&S ISAs we have with HL or not depends on how they respond.

I love choice, and knowledge. and we're *slowly* getting both.

Mishomeister

There is one thing I still struggle to understand.
If I walk in to let's say PC World and buy a TV for say £500, I will agree with PC World that I buy this particular TV with particular features for particular price.
The PC World has got it for from China could be £100 . This is something I will never find out about.
So if I was an Independent Adviser I would find it extremely intimidating to disclose what is the profit I make from that particular deal.
This is the deal you get Mr Customer. Buy investing this amount of money you will get that much back should lets say FUTSE100 will go up in the next 5 years. If you are happy about it lets get it signed. If you are not - Nice to meet you. Good Luck.

There is no other industry where the seller has to disclose his profit to a customer.
I don't know what kebab shop owner will make of selling me a kebab if the price and features suits me I will buy it if not leave it. So why should IFA have to disclose the profit he makes?