Reasonable charges for an IFA?

Catbells

To clarify, it is the ‘arranging and setting up investments’ fee which is 1% with a minimum fee of £250 (investments involving more complex pensions will be charged 1.5%). Fees for providing a financial review and advice ‘generally range’ from £750 to £4,000 (the IFA indicated I would be charged at the lower end of the scale).

I have a found a recommended IFA in London - Lift Financial.
What I would like to know Is this 'arranging and setting up of investments' you mention here referred to by any other name or term? He has said his company have stated I need to pay a joining fee which I wasn’t expecting. Would this be what he is referring to? There is also an annual fee which (I will check) is 1%) . Cheaper than the previous IFA’s fees. Thanks for any insight as like the OP I am not confident or knowledgeable enough.

I also don’t know if I would be confident enough to manage my investments further into the future but being able to cancel the arrangement in the future is a good idea. Thanks for that tip. The last IFA didn’t adjust any of the investments over a period of 7 years yet I still paid quite a large fee.

dunstonh

What I would like to know Is this 'arranging and setting up of investments' you mention here referred to by any other name or term?

I suppose you could call it any number of things. However, the only initial charge in this day and age is the adviser charge. Whether you call it initial advice charge, initial charge, chocolate charge or other weird things, it is an adviser charge.

He has said his company have stated I need to pay a joining fee which I wasn’t expecting.

That would be a new one on me. However, think of it as the initial adviser charge.

There is also an annual fee which (I will check) is 1%) . Cheaper than the previous IFA’s fees.

The dominant IFA ongoing charge is 0.50% p.a. 1% is increasingly common for smaller investment values (as previously mentioned. So, if he is charging 1% and was cheaper, are you sure you are comparing like for like? e.g. adviser charge only vs total charges with the other?

Remember that there are five segments to ongoing charges.
Platform/provider charge
Adviser charge
investment charge (ongoing charges figure)
Transaction charge (a new disclosure from 2018. Usually around 0.0x%)
Incidental/other charge (another new one from 2018. Usually zero)

You add up all three to get your bottom line.

redmalc

I am paying 0,65% on a 230k sipp

Alexland

redmalc wrote: »

I am paying 0,65% on a 230k sipp

If going DIY that's around 2.5 times more than you need to pay. Or do you mean that's your advisor's fee? Or the total including advice?

Catbells

Thanks. The initial investment fee (for setting up investments on their own platform investment company) would be £5,000 and an annual fee of £2,500. On an amount of £650k, Does this sound OK. It primarily for living as I don't have a private pension - just state pension.

dunstonh

Catbells wrote: »

Thanks. The initial investment fee (for setting up investments on their own platform investment company) would be £5,000 and an annual fee of £2,500. On an amount of £650k, Does this sound OK. It primarily for living as I don't have a private pension - just state pension.

It isnt their own platform. They chose to use AJ Bell platform as their "preferred" platform.

Yes, it sounds ok for ongoing. Initial is a bit higher than could get but also a lot cheaper than the greedy ones.

You are now 3 months after you started posting on this thread. You have missed a significant growth period that would have seen your portfolio grow by many times the fee. The last week alone has seen growth of nearly 2%. It could have gone the other way of course. However, is your hesitancy costing you?

Catbells

Thanks Dunstonh - very much. Yes AJ Bell are the ones. I am only just receiving half the funds now which is why I was not able to do this before now. (long story). I should have it by end of this month though. How long is the 2% going to last - do you think. If you knew you'd be very, very rich

Catbells

Just thought that after paying the initial fee of £5k it wouldn't make sense to cancel for quite a few years at least.