Commission to IFA

dunstonh

fairleads wrote: »

i don't see it like that. Axa wealth elite global equity fund is a fund of funds of unit trusts.
Each fund wrapper comes with an amc of 1.25% and the base UTs have a ter of say 1%. Even worse is that some of the base funds are trackers for which the investor is paying 2.5% + adviser costs of .5% p/a to manage a fund of funds that comprise trackers with ters of .3% or less

Perhaps an AXA spokes person could step in and verify the cost structure.
Regards

The underlying fund charges are not added to the fund TER. Fund of funds get the underlying funds cheaper than retail. Plus, these funds are fettered fund of funds. So, all the funds are in-house and the it is just a way of handling asset allocation. Many of the old stakeholder balanced managed funds work the same way and it is a cheaper way of doing it.

Plus, the AXA Wealth funds get a fund based discount. nil rebate on under £50k. 0.45% rebate above £50k, 0.5% above 250k and a few more tiers thereafter.

IronWolf

kidmugsy wrote: »

Why are people prepared to pay for a plumber but not an IFA? Strange things, superstitions.

Exactly. A lot of people on this forum are comfortable with making their own investment decisions, but I know personally that took a lot of time learning and reading. Other people don't want to do that and need someone with expertise that can advise them on what best to do with their money.

I would use an IFA for certain things just like I use an accountant to do my tax returns. I dont want to have to do days of research on sole trader tax law and keep up to date on them just to fill in a form once a year.

zygurat789

kidmugsy wrote: »

Why are people prepared to pay for a plumber but not an IFA? Strange things, superstitions.

A plumber fixes things and gets paid, if it goes wrong he cones and fixes it for free (in theory)
An IFA makes a judgement and is paid for it if it turns out to be incorrect he just says "prices may go down as well as up" Therte's no refund for a bad decision.

atush

IFAs in general don't make a 'bad decision' if markets tumble. They don't have a crystal ball. If they did, they would not be IFAs but day traders.

What they might do that could be perceived as bad advice, is arrange investments for a client just before a major market fall, but again how would they know?

They make decisions based on YOUR risk profile which might mean you don't get as good returns as the next client who has a different risk profile.

There are things they do for uncertain/uneducated clients that they might not do for themselves, such as tell them not keep everything in cash under their bed (or in an acct paying 0.1%) and not to invest in single shares etc.

dunstonh

An IFA makes a judgement and is paid for it if it turns out to be incorrect he just says "prices may go down as well as up" Therte's no refund for a bad decision.

How is that a bad decision? Advice to invest is done on the basis and knowledge that investments will go down as well as up. You know that is going to happen. So, when it happens, how does it make it bad?

Or do you expect crystal balls to be part of the job?

zygurat789

dunstonh wrote: »

How is that a bad decision? Advice to invest is done on the basis and knowledge that investments will go down as well as up. You know that is going to happen. So, when it happens, how does it make it bad?

Or do you expect crystal balls to be part of the job?

I was merely attempting to answer the question, but you must understand that if someone pays for financial advice and, as a result of it, loses money then that person is very likely to feel agrieved.

dunstonh

zygurat789 wrote: »

I was merely attempting to answer the question, but you must understand that if someone pays for financial advice and, as a result of it, loses money then that person is very likely to feel agrieved.

No, I don't understand that. When the advice is given, the person is told that it will go down as well as up. That is the nature of the beast. So, why should they be aggrieved about something that they know is going to happen sooner or later?

Now, if it goes down by more than they expected and is not within their tolerance or capacity for loss then that is a different matter.

fairleads

So I can invest in axa wealth elite global fund of funds of funds for as little as .55% p/a? or less even on large amounts

zygurat789

dunstonh wrote: »

No, I don't understand that. When the advice is given, the person is told that it will go down as well as up. That is the nature of the beast. So, why should they be aggrieved about something that they know is going to happen sooner or later?

Now, if it goes down by more than they expected and is not within their tolerance or capacity for loss then that is a different matter.

And do IFAs put this right?

dunstonh

zygurat789 wrote: »

And do IFAs put this right?

Yes. With investment complaints that are upheld, that is the most common reason why. That is one of the reasons there has been so much focus on investment risk profiling, knowledge and understanding and capacity for loss in recent years.