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IFA Quote for Drawdown

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  • atush
    atush Posts: 18,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    You seem to have a pretty big axe to grind for a newbie?
  • Nosler
    Nosler Posts: 615 Forumite
    atush wrote: »
    You seem to have a pretty big axe to grind for a newbie?



    if you mean I think paying 2.75% to manage £300k is expensive you are right. Or do you think that good value for money?
  • dunstonh
    dunstonh Posts: 119,640 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    tbh, I don't really have a lot of sympathy for an industry that sold a product and expected commission for that product decades later.

    There is no commission decades later
    or do you just think an IFA should get trail commission and not be expected to provide any on-going advice?

    Pensions didnt have trail commission back then (and most never have had any trail commission)
    if you mean I think paying 2.75% to manage £300k is expensive you are right. Or do you think that good value for money?

    The adviser is not getting 2.75%.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Thanks to everybody for their thoughts and it seems I may have opened a small can of worms!
    Looks as though I will be looking at alternatives but yes the IFA quoted that he would get the 0.75% part of the 2.75% with 2% of this in charges to the fund provider. Also think he got his sums wrong working out his monthly commission on the full amount of £400000 before tax free sum taken off and should have worked on £300000. Still I would end up paying the initial £5000 plus £8250pa (made up of £6000 for the fund provider and £2250 for the IFA ie £187.50 per month for an annual review) still a lot of money!
    Just one query he quoted the following figures re fund performance over the last 5 years quote.....the fund performance average over the last 5 years has been 13.62% for a cautious portfolio and 20.40% for a balanced portfolio. Just wondered if these are financial industry figures. We had discussed a balanced portfolio.
    Looks as though I may be going diy perhaps with HL who have supplied some online detail or Fidelity who I already use for funds / isas. No doubt will be advice seeking again on this excellent forum soon.
  • HarryD
    HarryD Posts: 115 Forumite
    edited 26 November 2014 at 5:40PM
    Just one query he quoted the following figures re fund performance over the last 5 years quote.....the fund performance average over the last 5 years has been 13.62% for a cautious portfolio and 20.40% for a balanced portfolio.

    I've no idea what he might have meant by this. However, whatever he meant, past performance is not necessarily a guide to future performance.

    If you go with H-L, what would the annual platform charge be? On top of that you'd have fund charges, but as I'm sure you have seen, these can be very low for some funds. I'd guess you'll end up paying well under 1%pa in total. Plus any charge you incur if you decide to go to an IFA for advice on how to construct your portfolio. Which I guess you could do on a per-hour charge basis?
  • Nosler
    Nosler Posts: 615 Forumite
    dunstonh wrote: »
    There is no commission decades later


    The adviser is not getting 2.75%.



    I've been sold financial products that have paid the original adviser commission 14 years later. Is that not near enough decades?


    Just because the IFA is not getting the full 2.75% does not mean his advice is not questionable.
  • zagfles
    zagfles Posts: 21,415 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    dunstonh wrote: »
    The adviser is not getting 2.75%.
    As you (I think) said in another thread, does it matter what the adviser gets? It's the total charge that matters, and 2.75%, the charge that would be incurred if the OP goes with his/her IFA's recommendation, is a rip-off, however it's made up.
  • zagfles
    zagfles Posts: 21,415 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Chutzpah Haggler
    Thanks to everybody for their thoughts and it seems I may have opened a small can of worms!
    Looks as though I will be looking at alternatives but yes the IFA quoted that he would get the 0.75% part of the 2.75% with 2% of this in charges to the fund provider. Also think he got his sums wrong working out his monthly commission on the full amount of £400000 before tax free sum taken off and should have worked on £300000. Still I would end up paying the initial £5000 plus £8250pa (made up of £6000 for the fund provider and £2250 for the IFA ie £187.50 per month for an annual review) still a lot of money!
    Just one query he quoted the following figures re fund performance over the last 5 years quote.....the fund performance average over the last 5 years has been 13.62% for a cautious portfolio and 20.40% for a balanced portfolio. Just wondered if these are financial industry figures. We had discussed a balanced portfolio.
    Looks as though I may be going diy perhaps with HL who have supplied some online detail or Fidelity who I already use for funds / isas. No doubt will be advice seeking again on this excellent forum soon.
    Watch out with Fidelity as I believe they don't do drawdown without advice.

    If you go with HL be sure to negotiate charges - their default is 0.45% for the first £250k then 0.25%, but people with big pots have negotiated discounts, eg 0.2% or 0.25% on the lot, see thread I linked above.
  • atush
    atush Posts: 18,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Nosler wrote: »
    if you mean I think paying 2.75% to manage £300k is expensive you are right. Or do you think that good value for money?


    If you bother to look back and read you'll see I agreed that it was too high.

    But I didn't tar ALL IFAs with that same brush, now did I? Or was that too colonial for you :D
  • dunstonh
    dunstonh Posts: 119,640 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I've been sold financial products that have paid the original adviser commission 14 years later. Is that not near enough decades?

    On a pension?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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