Maxi ISA - too expensive

Clearways

Hello All,

I currently have a MAXI ISA - arranged by an IFA which is split between Equity Income Unit Trust and Property Unit Trust.
At present the fund is worth less than I have put into it - good old fees :rolleyes:
I invest £100 a month into it..

Now I realise the market is down, but that doesn't seem very good..

The IFA's company charge 5% which seems very high ?

Any tips ?

dunstonh

I currently have a MAXI ISA - arranged by an IFA which is split between Equity Income Unit Trust and Property Unit Trust.
At present the fund is worth less than I have put into it - good old fees :rolleyes:

That isnt down to fees. Its down to a recent correct on the stockmarket and a downgrading in values on medium and higher risk property funds.

The IFA's company charge 5% which seems very high ?

That looks like 3% commission. FSA average for IFAs is 1.8% commission.

Is the advice and servicing giving you good value? If yes, then carry on. If no, then shop around.

Jennifer_Jane

5% or thereabouts is standard buy/sell ratio; occasionally I've received a discount on this, but I always work on 5%. It isn't the IFA's Company charging this, it is a number of charges made by the Unit Trust Company.

Perhaps Dunstonh can comment on your actual funds (not allowed to give advice). He's wonderful!

If you want to check your unit trusts on line you can enter them into your portfolio on www.iii.co.uk. I tend to look at mine constantly (a bit like watching my weight!). Unit Trusts in general are meant for the medium to long-term, but obviously people need to keep an eye on their money.

Good luck. A journalist on iii thinks that markets should improve soon (I know they have just come up a bit), so let's hope you see some profit soon!

Jen

Clearways

That's why I like forums - instant and good answers

That isnt down to fees. Its down to a recent correct on the stockmarket and a downgrading in values on medium and higher risk property funds.

Sorry incorrectly put - I understand that.

s the advice and servicing giving you good value? If yes, then carry on. If no, then shop around.

Humm that's a difficult one, and I presume only long term will tell ? whether I make money out of money I have put in..
I think the advise was good because I didn't have an ISA and I should use the tax allowance, if I'm not stretching myself financially to do so - which I' not. The idea of the ISA is to invest money for the kids - on a regular basis.

5% or thereabouts is standard buy/sell ratio; occasionally I've received a discount on this, but I always work on 5%. It isn't the IFA's Company charging this, it is a number of charges made by the Unit Trust Company.

Ah OK, but part of the 5% must go to the IFA's company ? They must make their money somewhere - unless they get paid by the Unit Trust Company..

dunstonh

Ah OK, but part of the 5% must go to the IFA's company ? They must make their money somewhere - unless they get paid by the Unit Trust Company..

Typical maximum commission is 3%. Average is 1.8% (according to FSA).

Some funds will discount to the commission. Other funds will not. Say I purchased £50 in Inv Perp high income, the charge for that is 5%. However, I can get it discounted (I say I as in the professional sense that any IFA can do this if they want to) to 3%. The commission is 3% at maximum so if the IFA is taking 3% commission, then your initial charge is 3%. If they take 1% commission, your initial charge is 1%.

Clearways

dunstonh wrote: »

Typical maximum commission is 3%. Average is 1.8% (according to FSA).

Some funds will discount to the commission. Other funds will not. Say I purchased £50 in Inv Perp high income, the charge for that is 5%. However, I can get it discounted (I say I as in the professional sense that any IFA can do this if they want to) to 3%. The commission is 3% at maximum so if the IFA is taking 3% commission, then your initial charge is 3%. If they take 1% commission, your initial charge is 1%.

So in effect it sounds like he is expensive. But I presume if I am getting good advise - it may be worth paying for.. - good advise always is I guess..

Like your pay a £5 for a Tesco quote in "mortgages"

jamesd

Which company's Equity Income Unit Trust and Property Unit Trust?

I'd be inclined to include say an emerging markets fund instead of commercial property if the idea is 10+ year investing for children. Or a global growth fund for a broader, less volatile, spread but less growth potential.

You might also find Ok then - How do I choose a S&S ISA interesting, if only for the description of Hargreaves lansdown's usual 0% initial charge and 0.25% rebate on annual charges. But that's for service with no advice, so it's different from what you have. Might be worth considering once you're satisfied that you have properly rewarded your IFA for the service delivered.

Clearways

jamesd wrote: »

Which company's Equity Income Unit Trust and Property Unit Trust?

I'd be inclined to include say an emerging markets fund instead of commercial property if the idea is 10+ year investing for children. Or a global growth fund for a broader, less volatile, spread but less growth potential.

You might also find Ok then - How do I choose a S&S ISA interesting, if only for the description of Hargreaves lansdown's usual 0% initial charge and 0.25% rebate on annual charges. But that's for service with no advice, so it's different from what you have. Might be worth considering once you're satisfied that you have properly rewarded your IFA for the service delivered.

I didn't quote the company as I wasn't sure if it was fair game re board rules.. etc.. The funds are with St James's Place Unit Trust Group.

Thanks for the link..

dunstonh

St James Place are not IFAs.

That also explains why you are paying 5% and not perhaps 3% (totally off the record fund match for an eq income fund and property fund would perhaps be Inv perp income and SWIP property. Both of which have charges = comm which would be 1.8% at IFA average on say the cofunds platform).

Clearways

dunstonh wrote: »

That also explains why you are paying 5% and not perhaps 3% (totally off the record fund match for an eq income fund and property fund would perhaps be Inv perp income and SWIP property. Both of which have charges = comm which would be 1.8% at IFA average on say the cofunds platform).

Err sorry I'm a newbie to this - English please..

dunstonh

The most important bit on my last post was you believing you are seeing an IFA when you are not. You must see an IFA. Its costing you money.

I just gave an example of two highly regarded funds where the initial charge is discounted to match the commission taken. So, if you went by IFA average rather than maximum as you are currently are, then you would only pay 1.8% initial charge and not 5%.