Commission to IFA

Lokolo

fairleads wrote: »

Passives aren't the subject matter.

Quite, but you said you don't believe you can get a FoF for as little as 0.2%. Well my point is, if I can get one fund for 0.15%, then I don't see why I couldn't get a FoF for just a little more.

http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-lifestrategy-20-equity-income

This is a nice FoF, with an AMC of 0.29%.

dunstonh

1000 in total
Each fund gets 200, each fund amc is say 1%
The fund wrapper that hold the 5 funds then has a charge of 1% making 2% in total.

Your calculations are wrong.

the title fund, AXA W Elite Global equity is actually a fund of funds of funds with a triple layer of charges (triple = x 3)

it does not have triple charges.

PPs Aegis has told us previously that he wouldn't manage 100K for £210 p/a yet you expect AXA to.

I wouldnt either. However, Aegis has already explained that AXA don't do the same things the adviser does.

if I was buying a new car i'd expect some things like the mpg to be provided by each car manufacturer. it seems that fund managers go out of their way to hide the true costs of their products.

The costs are published. Fairleads is just adding made up figures to those published costs to make them bigger.

Quite, but you said you don't believe you can get a FoF for as little as 0.2%. Well my point is, if I can get one fund for 0.15%, then I don't see why I couldn't get a FoF for just a little more.

Indeed. Vanguard Lifestrategy funds are FoFs.

Architas have their Z class funds which have a TER of 0.2% (e.g. Architas Passive intermediate) was is a unfettered fund of funds (has blackrock, State Street and Vanguard funds in it). The options available with other providers increases with more FoFs can coming in at 0.4% as well.

The AXA Wealth Aquila Global Equity 50/50 Pn S4 that I mentioned earlier as a more suitable alternative with its 0.85% ongoing charge before discount (making a possible charge of 0.25% after discount) is a fund of funds.

jem16

fairleads wrote: »

1000 in total
Each fund gets 200, each fund amc is say 1%
The fund wrapper that hold the 5 funds then has a charge of 1% making 2% in total.

Which is wrong. Each of the funds that make up the Fund of Funds no longer have a separate amc. The Fund of Funds has its own amc.

If I invest £1000 into Axa Wealth Elite Global Equity, I will have an amc of 1.25% so it will cost me £12.50.

If I invest £100k into the same fund, the amc will be 1.25% minus a discount of 0.45% which makes the amc 0.8%. It will therefore cost me £800.

jem16

doughnutmachine wrote: »

this fund has went from TER of 1% in post 47, to TER of 1.25% in post 69, and now it has a cost of 0.2% in post 82. All info from the same poster...

I think you need to read the posts a little better.

Post 47 - 1% TER mentioned as a general guide to what to expect from Axa Wealth Elite funds, not one specific fund. They range from 0.8% to 1.25% before discounts.

Post 67 - 1.25% is the TER before discount for AXA Wealth Elite Global through IFA channels.

Post 82 - 0.2% TER would be the cost of the lowest AXA Wealth Elite fund after the maximum discount, again through IFA channels.

if I was buying a new car i'd expect some things like the mpg to be provided by each car manufacturer. it seems that fund managers go out of their way to hide the true costs of their products.

If you were buying a new car, you would be able to find the mpg of the car provided by the manufacturer. What you would find will vary is the actual price of the car. There will be an RRP and then there will be the price you pay depending on where you buy it from and what discounts you can negotiate with the dealer.

This the same for funds. You have the RRP, then you have the different prices depending on where you invest and how much you have to invest.

doughnutmachine

jem16 wrote: »

If you were buying a new car, you would be able to find the mpg of the car provided by the manufacturer. What you would find will vary is the actual price of the car. There will be an RRP and then there will be the price you pay depending on where you buy it from and what discounts you can negotiate with the dealer.

This the same for funds. You have the RRP, then you have the different prices depending on where you invest and how much you have to invest.

I think we will have to agree to disagree, I don't think unit trusts and fund of funds publish the total costs faced by investors.

the FT says that fund of funds has typical fees of 2.5%. I would imagine there would be significant dealing costs on top of this figure.

As an investor I want to know the fees I pay when making an investment. If no one can tell me what I will pay in fees i'm not interested in making the investment.

http://www.ft.com/cms/s/0/e6a4f36e-290a-11e2-86d7-00144feabdc0.html#axzz2c9PhClZN

jem16

doughnutmachine wrote: »

I think we will have to agree to disagree, I don't think unit trusts and fund of funds publish the total costs faced by investors.

the FT says that fund of funds has typical fees of 2.5%. I would imagine there would be significant dealing costs on top of this figure.

As an investor I want to know the fees I pay when making an investment. If no one can tell me what I will pay in fees i'm not interested in making the investment.

http://www.ft.com/cms/s/0/e6a4f36e-290a-11e2-86d7-00144feabdc0.html#axzz2c9PhClZN

OK fair enough. That is your decision.

However using out of date information, quoting "typical" fees and what you would imagine will happen is not fair on those who might like to use this kind of fund and who would prefer to know realistic costs.

fairleads

jem16 wrote: »

OK fair enough. That is your decision.

However using out of date information, quoting "typical" fees and what you would imagine will happen is not fair on those who might like to use this kind of fund and who would prefer to know realistic costs.

Couldn't agree more. Which is why i contacted AXA Wealth with my table of costs for them to comment on. They neither confirmed or denied my synopsis of the layering of costs nor the cost % of the specific funds but instead sent me the key facts documents for the funds in question.
Last night i again emailed AXA wealth including a link to this thread and asked them to join the thread and clarify the cost structure of the axa wealth elite global equity fund and all the sub funds contained in this fund of funds of funds wrapper.
(This fund was the subject of the post by mania 112 which prompted my initial post)
Just for the record i do believe that this fund has three levels of amc. Whether or not the amcs are rebated and by how much is open to question and is in AXA Wealth's own interest to clear this up once and for all.
To repeat .2% amc on 100K fund = £200 p/a
There are anything up to 40 unit trusts funds in the Global fofofs each one getting say £2.5 p/a with the balance, £100, to AXA.
Doesn't sound very plausible to me. What do you say Reaper?

fairleads

doughnutmachine wrote: »

I think we will have to agree to disagree, I don't think unit trusts and fund of funds publish the total costs faced by investors.

the FT says that fund of funds has typical fees of 2.5%. I would imagine there would be significant dealing costs on top of this figure.

As an investor I want to know the fees I pay when making an investment. If no one can tell me what I will pay in fees i'm not interested in making the investment.

http://www.ft.com/cms/s/0/e6a4f36e-290a-11e2-86d7-00144feabdc0.html#axzz2c9PhClZN

Thanks for the link.
So if they, the FT, say fund of funds typically cost 2.5% on amcs then surely it follows that a fund of funds of funds such as the axa wealth elite global equity fund will have one more layer of costs ?

Lokolo

fairleads wrote: »

Thanks for the link.
So if they, the FT, say fund of funds typically cost 2.5% on amcs then surely it follows that a fund of funds of funds such as the axa wealth elite global equity fund will have one more layer of costs ?

Correct, BUT you can see it within the AMC. It is not how you think it is and added on top.

For example, you can see in the vanguard FoFs, the AMC is 0.29%, but the underlying funds have a varying AMC of 0.15%-0.25%.

dunstonh

Couldn't agree more. Which is why i contacted AXA Wealth with my table of costs for them to comment on. They neither confirmed or denied my synopsis of the layering of costs nor the cost % of the specific funds but instead sent me the key facts documents for the funds in question.

They wont confirm or deny as it is not for them to do so.

Whether or not the amcs are rebated and by how much is open to question and is in AXA Wealth's own interest to clear this up once and for all.

it is not open to question. Its published in the product guide.

To repeat .2% amc on 100K fund = £200 p/a
There are anything up to 40 unit trusts funds in the Global fofofs each one getting say £2.5 p/a with the balance, £100, to AXA.
Doesn't sound very plausible to me. What do you say Reaper?

You are wrong. As has been told many times now. .

So if they, the FT, say fund of funds typically cost 2.5% on amcs then surely it follows that a fund of funds of funds such as the axa wealth elite global equity fund will have one more layer of costs ?

It does not follow at all as the article doesnt make it clear what universe they are looking at. From the examples they give, it appears they are using bundled pricing unit trust/OEIC funds. They also appear to be looking at unfettered versions. The pricing of such funds differs from fettered pension funds with pricing based on fund size.