Savings Portfolio Set Up fee

Tractorman

This could get long winded but I'll try and keep it short! After many years of getting good advice from the posters on this forum I now find myself requiring advice. My wife and I are are in our 60s and have investments in various schemes. We have a cash ISA that matures in January and I contacted my local Financial Adviser in Inveness to ask where he thought I might look to re-invest it. I was told that he had retired and the company that he worked for had been taken over. I was then contacted by an adviser from City Financial, Independant Financial Advisers, (the company who took over), who advised us that he would recommend putting our matured ISA proceeds and the proceeds from 2 other Stocks and Shares ISAs into one of his companys portfolios. CF apparently then use a fund rating service operated by a company called Morningstar who will indicate where the best place is for our investements. To place our savings into the portfolio is apparently going to cost us 3% of the amount invested. Has anyone had experience of this company or of this type of Investment, and is 3% a reasonable rate?

dunstonh

is 3% a reasonable rate?

Percentages can be good value or bad. The amount needs to be put in context. Is it 3% of £20,000 i.e. £600 or 3% of £200,000 which is £6000. One is fair. the other is not.

Has anyone had experience of this company or of this type of Investment

You havent actually mentioned the investment. You have mentioned the intermediary and the data company but not the actual investment. Morningstar data covers tens of thousands of investments.

Tractorman

Thanks for the replies so far.

The total investement is around £60000, therefore the cost to us would be around £1800.

Morningstar would use model portfolios. These are risk rated and the funds would be invested in various sectors, Short Term Money Market, Sterling Corporate Bond, Sterling Stategic Bond, Property, UK All Companies, UK Equity Income, UK Smaller Companies and Global. The models would be reviewed every quarter with a view to switching funds around.

dunstonh

Quarterly reviews on £60k is pointless. Indeed, its pushing it on an annual basis as well. Yearly or every other year is fine. How much are they charging for the quarterly reviews?

Tractorman

No charge has been mentioned for the quarterly reviews.

dunstonh

Tractorman wrote: »

No charge has been mentioned for the quarterly reviews.

They wont be doing work for free. You need to find out.

lalman

Although i am not an expert - i think 3% is quite high for fees - particularly if they are not taking any risk.

I used to have a fund with RBS that was charging me 2.5% annually and the fund didn't grow any faster than the market - i decided to end it once i realised i could invest the money and get the same returns/ better returns.

I hope this helps!

dunstonh

Although i am not an expert - i think 3% is quite high for fees - particularly if they are not taking any risk.

In this case, the fee is in the right sort of ballpark. Risk is being taken.

I used to have a fund with RBS that was charging me 2.5% annually and the fund didn't grow any faster than the market - i decided to end it once i realised i could invest the money and get the same returns/ better returns.

Bank funds are notorious for being poor performers. The recommendation is not a bank fund.