IFA Value

83dons

I am looking to setup an investment bond and have been advised to go for the Prufund Growth Life Fund. The sum to be invested is about £250k. The quoted fee is 1.5% one off setup fee (about £3750) to the IFA and ongoing fee to the Prudential of 1.35-1.87% AMC dependent on value TBC. Is this reasonable or am I best to set this up myself direct with the Pru (if that is even possible)? Happy to pay for the advice received so far but I wondered if the fee was something that I could easily avoid by setting up direct with the provider?

Pension_Geek

83dons wrote: »

I am looking to setup an investment bond and have been advised to go for the Prufund Growth Life Fund. The sum to be invested is about £250k. The quoted fee is 1.5% one off setup fee (about £3750) to the IFA and ongoing fee to the Prudential of 1.35-1.87% AMC dependent on value TBC. Is this reasonable or am I best to set this up myself direct with the Pru (if that is even possible)? Happy to pay for the advice received so far but I wondered if the fee was something that I could easily avoid by setting up direct with the provider?

Not a pension, then, and Prudential only sell their products (largely speaking) via advisers, so, no, there isn't any way of getting this product without advice (from an IFA or one of Pru's own). .

83dons

Ok will check the Pru own adviser rates unless anyone knows?

If you have to go through an IFA does anyone know what the going rate is for initial setup of such funds? The only ongoing rate comes from the Pru themselves I believe. Haven't the faintest idea myself what is good and what isn't!

Mothman

Was there a reason for choosing an investment bond wrapper where your gains will be taxed?

HappyHarry

83dons wrote: »

I am looking to setup an investment bond and have been advised to go for the Prufund Growth Life Fund. The sum to be invested is about £250k. The quoted fee is 1.5% one off setup fee (about £3750) to the IFA and ongoing fee to the Prudential of 1.35-1.87% AMC dependent on value TBC. Is this reasonable or am I best to set this up myself direct with the Pru (if that is even possible)? Happy to pay for the advice received so far but I wondered if the fee was something that I could easily avoid by setting up direct with the provider?

With all due respect, you've taken advice from an IFA, presumably after agreeing to pay them, and your now looking for a way to take that advice, but not pay your adviser?

This forum is part of a money saving site, not a "get out of paying what I owe" site.

83dons

The first consultation is clearly advertised as free and no payment was agreed. I presume IFAs work like any other business if you charge too much for a service you don't get the business. Maybe your business relies on people not asking questions about commission rates and just going with the first one they are offered. I also thought this was a money saving advice website so legitimate question to ask I would think.

Maybe the quoted fee is an industry standard or exceptional value happy for folk to inform me of this if so.If this figure is reasonable value I am more than likely to stick with it as the advice seemed sound but it would be crazy not to take a second opinion from someone else.

Spreadsheetman

Just out of curiosity - what is the purpose of that investment? The charges are high, the return is low and after tax it looks like it may just about maintain value against the current inflation rate at 2.5%-ish (based on the 1Y return)

fred246

£3750 sounds about right for an IFA. There will be at least 2 pieces of paper to fill in. There's the ink to pay for too.

dunstonh

I am looking to setup an investment bond

That's a niche option. I havent done one in about 6 years. What is the reason for yours?

am I best to set this up myself direct with the Pru (if that is even possible)?

you cant.

HappyHarry

83dons wrote: »

The first consultation is clearly advertised as free and no payment was agreed. I presume IFAs work like any other business if you charge too much for a service you don't get the business. Maybe your business relies on people not asking questions about commission rates and just going with the first one they are offered. I also thought this was a money saving advice website so legitimate question to ask I would think.

Maybe the quoted fee is an industry standard or exceptional value happy for folk to inform me of this if so.If this figure is reasonable value I am more than likely to stick with it as the advice seemed sound but it would be crazy not to take a second opinion from someone else.

If the IFA is advising you to invest in a specific product at the first consultation, then, quite frankly, you're dealing with someone that is cutting corners and you shouldn't be paying them anything. I would be worried about what else this IFA is cutting corners on.

You should note that commission was banned over 5 years ago.

Of course I expect clients to ask questions about fees. In fact, I, and every other IFA, will make very clear all fees in pounds and pence, before any advice is given, and gain agreemnet for payment from our clients.

This is why I was fairly short with my response earlier, as either;
1. Your IFA had been through the correct process, gained your agreement for the fee and had your approval, and now you're trying to screw them over, or
2. Your IFA is cutting corners, not documenting things as they should, not providing advice in writing as they should, and asking for a large fee without your consent.

If it's (2) above, then please accept my apologies, and I would suggest you find yourself a new IFA, one that plays by the rules.

dunstonh

I concur with above. The first meeting is a meet and greet where you find out if you can work together and if there is a reason to go forward.

To come to the decision to invest in a very niche tax wrapper that is largely obsolete nowadays in the first meeting and decide Pru is best is just unbelievable.

An investment bond is niche. Very niche.
Prufund is niche.

Whilst Prufund is viable for some people, it also happens to be the go to option for a number of very lazy advisers who cannot be bothered to explain investments to people who do not understand them. Often, those that use Prufund do it for virtually everyone. That needs to be avoided.