My Advisors 1.5% Charge?

Twointhebush

My advisor charges me 1.5% on whatever I pay into my SIPP. This is as well as his 0.5% annual charge. Am I right in thinking this is so he can make some money for his efforts in case I decide to stop using him in the future?
Also, I read somewhere that it's a good idea to pay this charge (and other charges) up front rather than out of my pension. Is that the best idea?

Thanks,

atush

All advisers need to make money. but his fees may be over the top, esp on going fees for each payment. He is supposed to charge a fee upfront, repect of the advice,and ongoing for servicing if that iss agreed.

So really, after the new charging structure post RDR he should not be taking a payment off each contribution forever.

Twointhebush

Sorry, but what is RDR?

Audaxer

Sounds a lot - have you are large portfolio? Annual charge is okay, but I wouldn't like to pay 1.5% of each payment into a SIPP whether or not it is paid up front or out of my pension. Have you considered going DIY and investing in a low cost globally diversified multi asset fund?

dunstonh

My advisor charges me 1.5% on whatever I pay into my SIPP. This is as well as his 0.5% annual charge. Am I right in thinking this is so he can make some money for his efforts in case I decide to stop using him in the future?

The initial charge is for providing initial advice. The ongoing charge is for providing ongoing advice.

The figures do not sound at all unreasonable. 0.5% ongoing is the dominant figure. 1.5% initial is quite low. Although many advisers, where you have an ongoing service arrangement, will reduce or remove the initial fee if your investments under management are above a certain amount.

The initial charge can only be applied to each single payment once. OR if it is a regular payment, the initial charge can be spread over a maximum of 24 months (used to be 12 months and most advisers still use 12 months).

atush

RDR is the new retail distribution channel for advice, which restricts what advisers can charge (no longer commission).

Commission could have caused a charge off each new payment forever, but the new rules mean these payments must be agreed upfront in advance. But as Dunston says they can be spaced out over a year or so. But cannot as in the past be charged every month forever. which is why we thought your fee might be too high.

1.5 % initial and 0.5% ongoing is reasonable, IF the 1.5% is on the initial balance or for 12 months payments after. Not for all payments in for the length of the pension which is what I understood your OP to mean.

dunstonh

RDR is the new retail distribution channel for advice, which restricts whar advisrs chan carhge 9ie no longer commission).

new? 1st January 2013. over 5 years ago. I know it only feels like yesterday

Seabee42

I do questions whether everyone needs annual on going advice. SIPPs are not cheap options mind. I think the up front charge is completely reasonable.

atush

dunstonh wrote: »

new? 1st January 2013. over 5 years ago. I know it only feels like yesterday

New in that many dont knwo about it- depite your best efforts D