Initial Costs for IFA....

xylophone

With regard to the CTF to JISA, two bites of the allowance cherry could be possible.

http://www.thisismoney.co.uk/money/saving/article-2978112/Is-child-trust-fund-misery-end.html

The transfers are now permitted.

dunstonh

To take the hassle out of things I was also looking at a hybrid site like Nutmeg

You may as well use an adviser if you are considering that.

Aegis

savdefriz wrote: »

My wife and I luckily have a windfall to invest towards our retirement and kids university fees etc.

We were looking to invest a sizeable chunk in a medium risk investment portfolio for ourselves, and two smaller chunks into a similar fund for each of our two children.

We sought some financial advice but we feel that the costs are expensive. The advisor explained that there would be a 2.66% charge on initial setup along with a 1% ongoing charge. The product itself would have a 0.25% setup charge with an ongoing 0.7% projected fee.

We feel that these costs are excessive (especially compared to a product like Nutmeg) but I can't find costs of other advisers online to compare with. (Except Santander charges 2.5% setup fees).

Am I right in thinking that this is expensive?

Thanks

SDF

savdefriz wrote: »

To give a little more context:

My wife and I have just short of £100k in ISA accounts that are only achieving 1 - 2% interest. We have no mortgage or other debts. We also have £60k that we would like to use to invest for kids (30k each).

The idea was to transfer the ISAs over from Cash to Stocks and Shares. The other 60k we would invest in a general investment account, transferring our ISA alowances over the next two tax years. Then each yer we could drip feed from our accounts into the kids ISAs.

Hope that puts it in context.

SDF

I think I can actually guess exactly which investment product has been recommended based on the charging model you've highlighted. If so, then 1% per annum for dealing with you is likely to be far too high unless you have adopted for some very significant additional levels of service, like multiple meetings a year or cash flow modelling carried out quarterly or something.

Sadly 1% per annum is becoming something of an industry standard, which isn't something I agree with at all, at least not above the very smallest portfolio sizes.

masonic

savdefriz wrote: »

To take the hassle out of things I was also looking at a hybrid site like Nutmeg.....

If you want to take the hassle out of things, consider a multi-asset product like L&G Multi Index or Vanguard Lifestrategy through a cheap platform. You get a similar broadly diversified basket of passive investments but at a fraction of the running costs and with a better track record.

savdefriz

I think the one thing that I have to be grateful for to this "IFA" for is that it has made me research things in more detail.

From what everyone has been saying the Vanguard Lifestrategy 60 on a DIY platform may be the way to go, as we are looking to invest for at least 10 years. I will probably use the same sort of funds for the kids JISAs and reduce the risk as we get closer to University time.

I think I might also dabble with Funding Circle with some of the funds that I can't put into ISAs.

Do I invest the lot at once or drip feed..... (So much to get my head around)

Thanks to all for the useful advice.

atush

for the kids, I might go so far as to say use Vanguard 80.

I used investment trusts for my kids.

savdefriz

"Investment trusts" another piece of jargon to add to my "look up list" but appreciated non the less!

dunstonh

savdefriz wrote: »

"Investment trusts" another piece of jargon to add to my "look up list" but appreciated non the less!

Generally regarded a bit more advanced (due to increased risks). Viable option but something for the more experienced investor.

bigfreddiel

dunstonh wrote: »

How much are you talking about as percentage charges mean nothing without context.

e.g. 2.66% on £200k is high. However, 2.66% on £50k is fine.

1% ongoing on under £100k is common. Above 100k then 0.5% is more common.



hardly like for like.



Never use banks.


impossible to say until we know the amount.

I have never understood why IFAs don't just charge a flat rate, then you would know exactly where you stand.

I agree about banks - use them as a bank and nothing else.

Cheers fj

bigfreddiel

savdefriz wrote: »

Thanks dunstonh I just don't like the thought of being ripped off.

SDF

Be very wary otherwise you will be ripped off. fj