IFA Commission rates question

dunker1

Hi there, in the process of lookig for an ifa (croydon area), can any one give me an idea of what a fair commission rate is to pay, for example i have been quoted from one 3% and 0.5% pa on collective investments (e.g unit trusts), or is it just a case of finding a good one and not minding paying them good commission ?,thanks for anyone who can offer advice.

dunstonh

can any one give me an idea of what a fair commission rate is to pay, for example i have been quoted from one 3% and 0.5% pa on collective investments (e.g unit trusts),

Typical maximum is 3% plus 0.5% on collectives. Current FSA published average (i.e. average of all advisers business into collectives in the previous 6 months) is 1.8%. So, your adviser is taking above average. You should aim for average or lower. Although costs for a London based adviser may be quite high (offices, staff etc) so they may have no choice but to go to the typical maximum.

You can verify that average figure by looking at the key facts document that the adviser gave you at the start. There is a menu of commissions showing typical maximums and averages. It doesnt say what the adviser will take on that document but you already know that.