Commission to IFA

dunstonh

fairleads wrote: »

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

Using the current pricing of the contract with no special offers or IFA arranged discounts. The top rebate is 0.60% on the S4 version of the fund. Cheapest fund is 0.80% before rebate. So, you could get 0.20% p.a.

The elite global fund of funds is more expensive and you should be making a case of the AXA Wealth Aquila HP Glb Eq 50:50 4 Pen as being a more suitable option as they have similar asset make up and have run virtually neck and neck over the last decade. That fund is 0.85% without rebate and with top rebate, it would come out at 0.25%. Although if you were making a case on cost basis, then that particular product/fund combination is still in 6th place based on pricing.

atush

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.

But they didn't lose money as a result of advice, if the market fell as that wasn't the result of the advice but a normal market correction.

You do't pay for a IFA to get a guaratee of market performance. Unless you ask for such guaranteed investments which are generally very expensive.

doughnutmachine

dunstonh wrote: »

Using the current pricing of the contract with no special offers or IFA arranged discounts. The top rebate is 0.60% on the S4 version of the fund. Cheapest fund is 0.80% before rebate. So, you could get 0.20% p.a.

The elite global fund of funds is more expensive and you should be making a case of the AXA Wealth Aquila HP Glb Eq 50:50 4 Pen as being a more suitable option as they have similar asset make up and have run virtually neck and neck over the last decade. That fund is 0.85% without rebate and with top rebate, it would come out at 0.25%. Although if you were making a case on cost basis, then that particular product/fund combination is still in 6th place based on pricing.

could you confirm that this Axa fund of funds only charges 0.2% a year? my understanding of FoF is that they charge nearer 3%....

dunstonh

doughnutmachine wrote: »

could you confirm that this Axa fund of funds only charges 0.2% a year? my understanding of FoF is that they charge nearer 3%....

Unfettered fund of funds tend to go around the 1.3-1.7% mark (Jupiter Merlin funds being a good example). Fettered fund of funds tend to be much cheaper going sub 1%. Most fettered would come out around 0.4-0.6% There will be more expensive examples

doughnutmachine

dunstonh wrote: »

Unfettered fund of funds tend to go around the 1.3-1.7% mark (Jupiter Merlin funds being a good example). Fettered fund of funds tend to be much cheaper going sub 1%. Most fettered would come out around 0.4-0.6% There will be more expensive examples

what does fettered mean?

how come the cost of these AXA fund of funds was 1% in post 47 and now it's 0.2%?

while trustnet etc says the AMC is 1.25%, so probably nearer 3% when other fees are included?

JoeCrystal

According to FT, "There are two types: fettered, where the fund invests in funds managed by its own company, and unfettered, which gives the manager freedom to invest in funds run by other managers."

jem16

doughnutmachine wrote: »

how come the cost of these AXA fund of funds was 1% in post 47 and now it's 0.2%?

There is more than one AXA fund of funds. The cheapest fund of fund comes in at 0.8% - with a 0.6% discount for the appropriate size of portfolio this would make it 0.2%.

while trustnet etc says the AMC is 1.25%, so probably nearer 3% when other fees are included?

Perhaps you could say what fees you are referring to which might make it easier to answer? Do remember though that the trustnet price will not include any discounts.

mania112

You shouldn't 'trust' TrustNet. The price they show is the default price, which few people will actually pay, maybe only the DIYers (!).

fairleads

jem16 wrote: »

There is more than one AXA fund of funds. The cheapest fund of fund comes in at 0.8% - with a 0.6% discount for the appropriate size of portfolio this would make it 0.2%.



Perhaps you could say what fees you are referring to which might make it easier to answer? Do remember though that the trustnet price will not include any discounts.

AXA Wealth Elite Global Equity fund
Fund costs according to info obtained from the AXA web today
Axa wealth elite global equity fund of funds - amc 1.7% p/a
This wrapper fund would typically comprise of a range of sub fund of funds, such as, for example,
North American, European, Japan, Asia Pacific and Emerging Markets equity funds - all with an amc of 1.25% p/a,
Each of the above sector specific funds would in turn contain a selection of managed unit trusts.
One such unit trust in the North American sector fund of funds is M&G North American fund with an amc of 1.25%.
The total annual management costs of the title Fund is thus 1.7% + 1.25% +1.25% = 4.2%
The discount for fund values between 50K and 250K is .45%
Nett fund management costs are thus 3.75% p/a
Include the adviser cost of say .5 % p/a brings the total annual management cost of the
AXA Wealth Elite Global Equity fund to 4.25% p/a
Ps
Fund costs of 2.5% p/a will, over 32 years, completely wipe out the benefit of HR taxrelief on the contributions.

Lokolo

fairleads wrote: »

AXA Wealth Elite Global Equity fund
Fund costs according to info obtained from the AXA web today
Axa wealth elite global equity fund of funds - amc 1.7% p/a
This wrapper fund would typically comprise of a range of sub fund of funds, such as, for example,
North American, European, Japan, Asia Pacific and Emerging Markets equity funds - all with an amc of 1.25% p/a,
Each of the above sector specific funds would in turn contain a selection of managed unit trusts.
One such unit trust in the North American sector fund of funds is M&G North American fund with an amc of 1.25%.
The total annual management costs of the title Fund is thus 1.7% + 1.25% +1.25% = 4.2%
The discount for fund values between 50K and 250K is .45%
Nett fund management costs are thus 3.75% p/a
Include the adviser cost of say .5 % p/a brings the total annual management cost of the
AXA Wealth Elite Global Equity fund to 4.25% p/a
Ps
Fund costs of 2.5% p/a will, over 32 years, completely wipe out the benefit of HR taxrelief on the contributions.

Hmm I am not sure whether your maths is correct.

The money isn't being invested twice, in 2 funds. It's partially in one fund, partially in another.

So lets say we have Fund A with an AMC of 1.5% and Fund B with an AMC of 2%.

If you have £100. And say, the Fund of Funds is made up of 50% Fund A and 50% Fund B.

The total cost would be (1.5% * 0.5%) + (2% * 0.5%). This would bring the total AMC of the fund to be 1.75%. Plus whatever it costs to run the Fund of Funds.

Not only that, but Fund Managers won't be paying retail price for the fund, likely to be the clean price of 0.5% for active funds at the most.