Stocks & Shares ISA's

64+

I have a new IFA, I need some help as near to retirement, and setting up pension plan.
Have some savings in the bank doing nothing.
IFA has suggested stocks & shares ISA for myself and wife at £11,880.00 each,
Set up charge is £950.00 total for the 2 ISA,s is this a reaonable charge.
This seems a lot to me.

CLAPTON

64+ wrote: »

I have a new IFA, I need some help as near to retirement, and setting up pension plan.
Have some savings in the bank doing nothing.
IFA has suggested stocks & shares ISA for myself and wife at £11,880.00 each,
Set up charge is £950.00 total for the 2 ISA,s is this a reaonable charge.
This seems a lot to me.

not really enough information about your total circumstances

but you can set up a S&S ISA for nothing

dale_cotterill

With RDR and a commission option removed there is no cross subsidy of clients anymore.

Fee based you now have all your fixed costs, the research, administration, compliance and regulation you end up with a pretty cost just to provide the advice which pretty much prices anyone with less than 50-100k out of the market of independent advice. So paying around 4% is pretty steep.

Since you seem to know pretty much what you want you might be able to get a restricted adviser to do it for a bit less.

Sadly although seemingly good intentioned, RDR had negatively impacted the people that it would be most beneficial to help.

Ifts

64+ wrote: »

This seems a lot to me.

If its just for setting up 2x S&S ISA's, £950 charge on investing £23760 seems a lot to me too.

(2014/15 ISA allowance - £11,880 allowance goes up to £15,000 from July 1 2014 onwards)

As already mentioned you can set up a S&S ISA for free -

For example X-O.co.uk - http://www.x-o.co.uk/isa-information.htm

edit: Going the DIY route is not for everyone though, if you choose the wrong investments you could end up losing a lot more than £950, so only DIY if you are confident in doing it.

BarrBru

Yes I can't see how they could possibly do it for anything less.

Out of the £950 your IFA's income from it will be a couple of hundred quid if that.

Compliance staff were numerous when I worked in the industry 6 years ago, they're more so now.
I was a technical guy, Not an IFA, I did the research/wrote the reports you get etc, but I remember some of the costs to have me were £550 per month for the software on my PC, £5,500 for my desk space. That's £12k before my salary.

PPI insurance is a requirement for all IFA's and it's really expensive.

IFA's take a lot of liability upon themselves to advice you which is why there are so many expensive systems in place.

I wouldn't kid yourself that you'll be a valuable client to them because at £950 you won't.

dunstonh

Set up charge is £950.00 total for the 2 ISA,s is this a reaonable charge.

If the adviser is dealing with you on transactional basis then the fee is fair. it is actually cheaper over the period than the old commission way which would have paid initial and on going amount.

if its an increment to a larger portfolio where the IFA is providing ongoing servicing then its on the steep side.

I would charge £1000 if it was transactional but no initial if it was servicing as it would be part of the ongoing service. So, you can see how what you are doing needs to be placed in some context.

was a technical guy, Not an IFA, I did the research/wrote the reports you get etc, but I remember some of the costs to have me were £550 per month for the software on my PC, £5,500 for my desk space. That's £12k before my salary.

I operate a small firm and running and compliance costs come to over £70k a year (not including wages). The cost of giving advice is ridiculously high. It should be lower but this is the system we have.

64+

Thanks for everyone's input.
There's no way I could DIY. So I may be stuck with this.

robatwork

Apart from the sage selection of funds, what does the OP get for his £950 over and above what he would get from a wise man on this forum giving opinion?

More specifically, what guarantee does his £950 give him if the advice is poor and the fund sinks?

jimjames

64+ wrote: »

Thanks for everyone's input.
There's no way I could DIY. So I may be stuck with this.

It really isn't difficult if you read up about it.

Some people can arrange their portfolio with a single fund from the Vanguard Lifestrategy range and leave it at that as they keep it rebalanced. It doesn't have to be complicated and saves you losing nearly 10% of your money in setup fees that you then have to try to outperform in order to get it back.

dale_cotterill

robatwork wrote: »

Apart from the sage selection of funds, what does the OP get for his £950 over and above what he would get from a wise man on this forum giving opinion?

More specifically, what guarantee does his £950 give him if the advice is poor and the fund sinks?

The cost would be for someone to analyse what he wants, the level of risk he is willing to take to acheive what he wants, and ideally choose an investment best suited to what he wants to achieve.

There is obviously no guarantee that the fund will do well or not, that is impossible to say. What he does get is that if the advice was unsuitable a complaint could be lodged and the IFA would be required to put the client back in the position they were prior to the advice (could easily be more than the fee itself)

dale_cotterill

jimjames wrote: »

It really isn't difficult if you read up about it.

Some people can arrange their portfolio with a single fund from the Vanguard Lifestrategy range and leave it at that as they keep it rebalanced. It doesn't have to be complicated and saves you losing nearly 10% of your money in setup fees that you then have to try to outperform in order to get it back.

Don't agree with this, if you don't know what you are doing then you really shouldn't be guessing. Especially so close to retirement. You could easily put yourself in a position where you end up being far worse off than you would have been.

It's 2 ISA's so the total to invest is nearly £25k, so the fee is really much closer to 4%, which isn't necessarily that much as long as it is all up front with nothing on-going.