Commission to IFA

doughnutmachine

jem16 wrote: »

Of course it's too high but it doesn't mean it's indicative. With explicit charging you would be unlikely to see a fee anywhere close to that but if you do then simply walk away and find someone else.

It would be good if one of the IFAs here gave "typical" costs for setting up pensions etc.

That way people here would know what a fair price is for getting advice.

jem16

doughnutmachine wrote: »

I set up a SIPP for myself. It only involved filling in a few forms......

The completion of a few forms only forms a minute part of the job. The whole point of an IFA is to advise.

Why did you choose a SIPP and what SIPP did you choose? I assume you are eligible for a UK pension with you working abroad?

JoeCrystal

No doubt it varies. In my case for a transactional advice to set up a private pension scheme and selection of ten funds cost me £300 in fee and 1% commission on my regular payments. I paid a gross lump sum of £4500 and monthly premium of £156 per month originally.

So you could say that the commission to the IFA is now costing £37.44 per year (based on a regular payment of £312 per month). *shrugs* No doubt I will see an IFA again once my pension fund reaches a certain size, not sure what value though.

It is a small price to pay for someone who know what they are doing with pensions. I really didn't have a clue about funds and pensions at the time few years ago now.

Cheers,
Joe

atush

doughnutmachine wrote: »

£5k for setting up a pension seems a rip off to me.

But I bet this thread will not prevent the same people saying "go onto unbiased.co.uk and get an IFA" for anyone wanting investment advice.

Of course it won't stop us.

The plain facts are, that many are either too busy, not inclined or too stupid to learn about investing/tax wrappers etc so Need advice.

And of course, should someone say they are being charged 5K, we would say that is too much.

Where do you send such people for advice?

dunstonh

Years ago, I wanted some garden work and part building done. One quoted £1000. One quoted £2000 and the other quoted £10,000. Using doughnutmachine's method, because one quoted £10,000 I should have gone DIY and done the work myself and ignored the two more reasonable priced ones.

jem16

dunstonh wrote: »

Years ago, I wanted some garden work and part building done. One quoted £1000. One quoted £2000 and the other quoted £10,000. Using doughnutmachine's method, because one quoted £10,000 I should have gone DIY and done the work myself and ignored the two more reasonable priced ones.

No, no that would be the wrong method.

What you should have done was accept the £10k quote and then years later you should have come on here and complained that you were missold, and you have been conned.

Doughtnutmachine could then point out that it was a rip-off and that no-one should employ a gardener/builder but should DIY as he's cut his own grass.

thenewwoo

Ok so, dunstonh, before January 2013 would you have sold someone a pension and in formed them of the commission you would receive and inform them that part of the monthly contributions they were to pay would be used by the pension company to repay that commission?

mania112

thenewwoo wrote: »

Ok so, dunstonh, before January 2013 would you have sold someone a pension and in formed them of the commission you would receive and inform them that part of the monthly contributions they were to pay would be used by the pension company to repay that commission?

"The fee payable to 'me' will be taken from your monthly contributions in the first year at a rate of 10.5%. As the illustration shows this will equal a total fee of £xxx.xx.

Thereafter, an ongoing management fee will apply at a rate of 0.5% of the fund value per annum, paid monthly to 'me' by the provider. We estimate this fee to be £xxx.xx in year 2."

thenewwoo

mania112 that's exactly what you'd expect. Thank you. What if there's no mention of anything like this?

jem16

thenewwoo wrote: »

mania112 that's exactly what you'd expect. Thank you. What if there's no mention of anything like this?

My pension illustration and KFD from 2007 contain similar wording to that quoted by mania112. There is also a table of charges that I should expect to pay. It was mandatory for this to be provided.

I asked you earlier if you had looked back at that illustration but you didn't answer.

What does your illustration say?