St. James's Place - can I do better?

kuratowski

Bear in mind the funds charges depends on what kind of portfolio you want.

d63

are there any financial advisors or managers whose fees only depend on how much profit your investments make rather than on the value of the invested assets?  

Linton

d63 said:

are there any financial advisors or managers whose fees only depend on how much profit your investments make rather than on the value of the invested assets?  

No, because...
1) The IFA has no control over global economics, so no professional who wished to continue in business in the long term would dare use such a model.
2) The purpose of sensible investing is to meet your objectives at minimal risk, not to take excessive risk to get the maximum return.  You would not want your advisor incentivised to do the latter.
3) The IFA should provide much more than returns such as advice on your wider financial management strategy.

underground99

d63 said:

are there any financial advisors or managers whose fees only depend on how much profit your investments make rather than on the value of the invested assets?  

Some fund managers (of individual specialist funds) have a performance fee as well as a fixed management fee to incentivise them to deliver, but does not stop them still charging a fixed or assets-based management fee because they need to be able to keep the lights on and pay salaries in a period of negative markets . 

However if you are looking for financial advice on which products to use or how to construct and monitor a portfolio it is not going to be a good idea to have your fees be based on returns.  That would create a bias for the advisor to take the greater risks with your money which might result in a potentially greater gain - he would rather have 10% of 25% return than 10% of 5% return. And you would not expect him to pay you 'negative fees' in the inevitable years where the assets gave negative results.   

So although people might think they would be happy to give away a bit of their return to get help in reaching the greater returns, the standard way to have a chance at reaching greater returns is simply to take more risks, which may give you a porftolio aligned with the advisor's interest in his potential invoices rather than your financial wellbeing.

dunstonh

jae123 said:

Am going to see a couple of ifas but the ongoing charges with SJP include fund and platform charges, where ifas just seem to quote charges for advice alone.

SJP doesn't have a platform.  It uses old fashioned style products where the total charge includes its own product, its own fund and remuneration to its salesforce.   .

IFAs are whole of market and that means they have access to most of the platforms on the market offering over 30,000 investments. They also have access to the providers that have the old fashioned style products as well.
So, the only charge the IFA can disclose is their own charge until they know what your circumstances are and what provider and investments are suitable to you.  However, they will be able to give you an indication of the bottom line early on.

Also be on guard when comparing charges.  All advisers have to comply with MIFIDII rules and disclose the charges in a certain way.  However, not all tax wrappers are legally required to follow MIFIDII.   
For IFAs,best practice is to see MIFIDII standards used across all tax wrappers.  That means your charges will be broken down to show each segment.   platform+adviser+OCF+TC+IC = bottom line.
For sales reps, they don't always follow that and the last two cases we were up against sales reps, they used the AMC in their disclosures and had the audacity to compare them to our MIFIDII compliant disclosure to pretend they were cheaper.

are there any financial advisors or managers whose fees only depend on how much profit your investments make rather than on the value of the invested assets?  

1 - that would be a truly awful way to pay an adviser.  Growth periods significantly outnumber negative periods.  So, it would be very costly for you.
2 - advisers are not investment managers.  They have no influence over the returns in the individual funds.   Their role, in the case of an IFA, is to decide the structure and process and select suitable funds for that from the marketplace that meet your objectives.  In the case of an SJP sales rep, they pick the closest match from their own fund range.   

ratechaser

d63 said:

are there any financial advisors or managers whose fees only depend on how much profit your investments make rather than on the value of the invested assets?  

I think there was that one advisor in Brewster's Millions. Made him a $10m profit as well in a matter of days.

Anyway, that was back in the 80s and he's probably retired now unfortunately.

Malthusian

d63 said:

are there any financial advisors or managers whose fees only depend on how much profit your investments make rather than on the value of the invested assets?  

The same number as the number of personal trainers who charge solely based on how many pounds you shed. Or the number of tailors who charge based on how much sexier you look in your new threads.

Professionals who charge for advice base their charges on the value of their advice, not on factors beyond their control.

MX5huggy

Professionals who charge for advice base their charges on the value of their advice, not on factors beyond their control.

Apart from Architects who typically charge % of project cost. So every time you swap the vinyl flooring to polished marble their fee rises. 

Are Estate Agents professionals?