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IFA charges - is this reasonable?
Comments
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Didn't quite follow this - does this mean that the annuity rate will be lower if you buy your annuity through an adviser?The only time it comes close to the truth is with annuities, where providers will almost invariably keep the commission associated with annuities unless it's paid to an adviser to cover their costs. Even then, the commission is taken by way of an implicit charge on the annuity, i.e. a permanent reduction in the rates offered to allow for an up front commission payment.0 -
No, it basically means that the annuity rate will be the same whether purchased through an adviser with commission paid or bought directly from the insurance company. Commission is effectively built in to the annuity rate automatically, so everyone's rates are reduced a little to allow for an up front payment to an adviser. In the event that no adviser is used, the insurance company keeps the extra profit for themselves.Didn't quite follow this - does this mean that the annuity rate will be lower if you buy your annuity through an adviser?I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
Didn't quite follow this - does this mean that the annuity rate will be lower if you buy your annuity through an adviser?
Can be the same or better. If an advsier has a fixed/capped charge on the commission, any excess can be put back in - a possibility not granted directly by provider.0 -
Do you mean when you are also paying a fee? Otherwise why would an adviser cap his commission?DavidLaGuardia wrote: »Can be the same or better. If an advsier has a fixed/capped charge on the commission, any excess can be put back in - a possibility not granted directly by provider.0 -
Do you mean when you are also paying a fee? Otherwise why would an adviser cap his commission?
Many (perhaps most) advisers charge set percentages as a fee (nothing wrong with that). The differerence between this in the old commission models and the new is that the old was down to the distribution channel and the new is about client agreed remuneration. Whether this is called a fee or commission is is fact no more than semantics and the current 'new-speak' An adviser charging 1% (or perhaps less or to a maximum) may find an annuity that offers more than 1% and consequently improve the annuity.through not taking the full amount0
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