Investment ISA Swap - IFA Charges

Silver_Dev

Just would like to test the water if possible??

I have around £5000 in an investment ISA and want to change to a better performing one. I instructed an IFA to look at this and he came up with another Investment ISA that looks more favourable on paper. However, he wants £1000 for the transfer from one to another and 0.85% per year commission from the overall value.

For the £1000 start up fee and the 0.85% commission they will review this and any further items i add to my investment portfolio. As the way we pay for an IFA services has changed i have nothing to measure the fee I have been charged against, therefore would like your views based on the information provided.

Thanks..

xylophone

Could you not consider a transfer out into the likes of Hargreaves Lansdown or Cavendish and do your own research?
http://www.hl.co.uk/investment-services/isa/transfer-an-existing-isa
http://www.cavendishonline.co.uk/investments/move-your-investment/

jimjames

I can't understand why you would pay 20% of your portfolio for advice. The level of outperformance to justify that has to be huge and there is absolutely no guarantee that the result would be any better than sticking to what you already have.

As above you would be better of moving to a fund supermarket and pick 5 funds in different sectors than spending so much on some advice.

dunstonh

£5000 is not really IFA territory. An IFA cannot offer advice cost effectively on that amount unless there is other business being looked after that allows some form of cross subsidy.

gkerr4

no way - you'd be mad to consider it.

just ask your ISA provider to move it to another fund of your choice

better yet - transfer it yourself to a new ISA provider and learn to invest yourself.

sabretoothtigger

Immediately you learnt something, never go to that IFA. If he was any good with money he'd be able to tell you for free dont spend 20% on fees.

Some things you shouldnt pay for, unless you saying you have 5k and will add another similar amount per month I guess thats reasonable to take advice on

dunstonh

Are you sure he is really charging £1000? Most of the platforms have caps on the amount possible (typically around 5%-7%). So, i am not sure 20% fee is possible.

Or perhaps the IFA didnt know it was only £5000 you were investing and gave you their default charges.

Aegis

He wouldn't necessarily need to take the charge from the investment (in fact, I'd argue that an adviser should rarely take fees from an ISA if it can be avoided), so I can only assume he's quoting his minimum fee for taking on a client.

Personally I'd have just declined to act and might have thrown in some general guidance if I had a little free time.