Advice wanted

Chris_A_5

Hi,
New here and new to investing. I have been appointed a trustee with a hundred thousand pounds trust to set up for a relative. I got a quote from a financial adviser who recommended an AXA offshore bond. A relative went to see another financial adviser who recommended an AXA onshore bond. The relative’s financial adviser has slated my guy’s qote as being too high on charges 16,000 as opposed to 6,000pounds over 10 years, and also that based on their lowest projections, that the onshore bond would have much higher returns. With them both being with AXA and from financial advisers, I thought the quotes would be fairly similar and am surprised by what the other financial adviser is saying as it just sounds a bit like a hatchet job, but wondered what other people’s thoughts might be on this, and whether AXA bonds are a good way to go generally, the money is to be tied up for 10 years plus.
Cheers
Any help appreciated.

dunstonh

AXA do have a strong offshore bond. So, it is no surprise that it came out recommended from both.

Financial services products are retail products like any other. The more expensive adviser is not doing anything wrong. He is just retailing the product at a higher price.

Products are also made available to IFAs at different prices. IFAs that are network members can usually get better terms than directly authorised small firms. Ironically, getting the product direct from AXA is the most expensive way.

Some investments have commission at anything from 4 to 7% (assuming indemnified commission for this example) depending on the terms the IFA firm has negotiated with the provider. So, you could find one IFA only getting 4% and another getting 7% but the charges to the client being exactly the same. Now, if the 7% adviser rebates some of that commission, it brings the charges down. That is where you see a lot of the differences on investments.

As for bond, we dont know enough about the circumstances but being a trust, you would expect a bond to appear as the recommendation.