Deferred IFA

orwen

dunstonh wrote: »

Because their DIY platform is non-advised.

But HL do offer an advisory service, they approached me once before. Many of my HL funds are of the multi-manager type.

The IFA does not have vested interests. HL retail their own product and funds. That is a world of difference. The IFA earns the same regardless of provider or investments. If you use a distributor who uses their own product then they earn from the advice, the platform/product and funds.

What about commission, if there is one, or several? What about third party charges from fund managers passed on to the investor? One of the things I'm trying to get to the bottom of is - all charges taken together - what would come out the more economical, HL or an IFA?

Malthusian

orwen wrote: »

What about commission, if there is one, or several?

Adviser commission has been banned since 2012 (at least under the types of products we are talking about).

What about third party charges from fund managers passed on to the investor?

Typically lower under an IFA. The platforms IFAs use are generally cheaper than HL and you are less likely to end up with expensive multi-manager funds with several layers of charges.

One of the things I'm trying to get to the bottom of is - all charges taken together - what would come out the more economical, HL or an IFA?

Assuming you want advice then an IFA can offer better advice (because it's independent) than HL's restricted advice at lower cost.

Or a higher cost - it depends on your choice of IFA.

dunstonh

Many of my HL funds are of the multi-manager type.

Which are expensive. And if they are the HL MM funds then HL are earning out of you in multiple places (HL advice, HL platform and HL funds). You would be a nice cash cow for them.

What about third party charges from fund managers passed on to the investor?

What about them? HL do them yes but they are do not have the largest selection. That honour goes to a platform that is used by intermediaries.

what would come out the more economical, HL or an IFA?

Depends on the IFA and their charges and it depends on what funds you have with HL. An IFA will not be recommending HL's MM funds.

orwen

Malthusian wrote: »

Assuming you want advice then an IFA can offer better advice (because it's independent) than HL's restricted advice at lower cost.

Or a higher cost - it depends on your choice of IFA.

And then what if the restricted IFA is running their own, independent unrestricted advice company and wants you to move all your HL holdings to another platform entirely, for which the IFA will become the sole intermediary, will this not present a multi-layer of percentage charges coming the investor's way at some stage? You then have the IFA, the platform, the managers, and so forth, all requiring a percentage from the investor. How on earth can the investor come up with a percent figure at the end of the day to help decide between HL costs and the IFA/advice company/platform costs please - or is there some basic formula which will allow me to see what is going on here?

At the moment I feel like I am blindfolded on a roller coaster ride, I am am not enjoying the experience.

jem16

orwen wrote: »

And then what if the restricted IFA is running their own, independent unrestricted advice company and wants you to move all your HL holdings to another platform entirely, for which the IFA will become the sole intermediary, will this not present a multi-layer of percentage charges coming the investor's way at some stage?

You cannot have a Restricted IFA. It will either be a Restricted FA or an IFA.

HL, as far as I'm aware, are now restricted FAs and no longer IFAs. When they were IFAs they had the reputation of being quite expensive and often using their MM funds.

You then have the IFA, the platform, the managers, and so forth, all requiring a percentage from the investor. How on earth can the investor come up with a percent figure at the end of the day to help decide between HL costs and the IFA/advice company/platform costs please - or is there some basic formula which will allow me to see what is going on here?

Your IFA should be providing you with these figures. There should be the advice fee for both initial and ongoing. Then there should be the platform fee and finally there should be the fund's charges.

If using HL under advice the same should be given. If it's the DIY platform you will have the platform fee plus the fund's charges. However you make all of the decisions on the DIY platform.

An IFA would rarely, if at all, use HL's DIY platform for a client as it's likely to be more expensive. You then would have the problem that the IFA cannot carry out whatever is needed and he would have to instruct you to do such and such on the DIY platform. Whilst it's not impossible I suspect it can lead to problems.

Normally on an IFA platform, your IFA would give the advice and assuming you agree to it would then put it into action without you having to do anything.

greenglide

You are making it more complex than it really is.

If you DIY there is the platform charge (.45% if you want the expensive HL) and the fund charges which depends wtitch one(s) you go with.

Via an IFA you have the advisor charge, the platform charge (generally they would use a cheaper than HL) and the fund charges. If the same funds are chosen the fund charges are generally the same.

The is no roller coaster.

Malthusian

orwen wrote: »

You then have the IFA, the platform, the managers, and so forth, all requiring a percentage from the investor.

Who is "so forth"?

How on earth can the investor come up with a percent figure at the end of the day to help decide between HL costs and the IFA/advice company/platform costs please - or is there some basic formula which will allow me to see what is going on here?

IFA fee + platform charges + fund charges = total percentage cost. If you are determined to make it complicated then it will be.