IFA ongoing charges

micktheknife

I rather naievly thought that these ongoing commision charges had been outlawed, and you simply paid for advice.
I used an IFA to setup three ISA's and a pension transfer three years ago and have now seen I'm paying north of £100 per quarter in "ongoing agent payments"
Is this usual these pays, or am I being stiffed?
I did pay out a chunk of cash at the initial stage of investment for his initial advice, and I thought that this would be it.


I'm now unable to pay into the pension fund now as I've had to medically retire from work ( IFA knew this was a likely outcome) but now I see that the charges on the pension fund exceeding the income so the capital is slowly falling.
I'm likely to take my benefits next January, and I'm wondering if the 25% lump sum will incur a comission charge to the IFA.
Sorry for a bit of a ramble....

bostonerimus

Fire your IFA and either DIY or find an IFA that you can live with.

Linton

The money should not be commission for an IFA. Could it be payment for ongoing management of your investments?

dunstonh

I rather naievly thought that these ongoing commision charges had been outlawed, and you simply paid for advice.

Commission has been banned for new business arranged after Dec 2012. It can still exist for legacy (pre 2013) investments unless there is a disturbance event.

I used an IFA to setup three ISA's and a pension transfer three years ago and have now seen I'm paying north of £100 per quarter in "ongoing agent payments"
Is this usual these pays, or am I being stiffed?

Payment for ongoing servicing is allowed but it must be used for provision of ongoing services (typically these are annual reviews, portfolio reviews and adjustments/rebalances etc. Many include tops and premium adjustments at no extra cost)

I'm likely to take my benefits next January, and I'm wondering if the 25% lump sum will incur a comission charge to the IFA.

Its not commission as you bought after the changeover.

you can end ongoing servicing at any time. If you end the ongoing servicing and move to transactional advice, then you will pay for advice transactions as they occur.

So, in that scenario, as an ongoing servicing client, you would not expect to pay a charge to go into drawdown. However, as a transactional client, you would.

cattie

If you initially set things up via an IFA I think it's standard to end up paying them an ongoing 'commission' or charge. I set up an isa & a GSA via an IFA some years ago on a non advisory basis.

Because of the way they have to be more open now as to what charges we're paying for our investments, I've only just realised that I'm paying the IFA over £500 per year on top of what I pay to the platform that the funds are held on.

I'm now in the process of switching platforms in favour of iweb & not only will I save on platform fees, but there will be no IFA taking a healthy chunk of my money. I can understand having to pay them if you are seeking advice, but not when no advice is provided.

dunstonh

If you initially set things up via an IFA I think it's standard to end up paying them an ongoing 'commission' or charge. I set up an isa & a GSA via an IFA some years ago on a non advisory basis.

Before Jan 2013, yes. From January 2013 no. From 2013, ongoing servicing is optional and can be ended. If included, it must be for the provision of services. It cannot be taken for doing nothing.
Some business models focus more on the ongoing servicing side. Most are general practitioner firms that will do transactional or servicing. I would broadly say its 50/50 in my experience.

The commission ban did not apply to the non-advised market. Ironically, this meant that some people ended up paying more for non-advised solutions than advised ones.