Cost of financial advice

beamyup

I have no problem if you don't agree with me. just look at a number of stories posted here to see the types of expensive investments that IFAs have recommended.

Are there ANY stories here of low cost investments recommended by IFAs? e.g. pay IFA x thousand as a one off fee and they set up a portfolio for you with a total cost of < 0.4% PA or close?

I think that should be common, and I think greed is stopping it happen.

PS no i don't hate IFAs - but I do think that advice is often poor.

Dox

beamyup wrote: »

No, I am not mistaken, I mean IFAs don't think that this is important, whereas I do.

IMHO IFAs SHOULD do everything they can to reduce the total annual charges as these are so damaging to the long term growth. but they don't - probably as to not draw attention to their huge fees.

Love the massive - and totally ill-founded - generalisation. That's precisely what mine does, most effectively, and I don't begrudge a penny of the fees I pay.

wjr4

It is not all about cost though.

beamyup

Dox wrote: »

Love the massive - and totally ill-founded - generalisation. That's precisely what mine does, most effectively, and I don't begrudge a penny of the fees I pay.

We should hear more information about situations like this. That would help re-balance opinions (at least in my case!).

SonOf

Are there ANY stories here of low cost investments recommended by IFAs? e.g. pay IFA x thousand as a one off fee and they set up a portfolio for you with a total cost of < 0.4% PA or close?

That is not a sound analysis of the comparable options. Indeed, I seem to recall the stats show that IFAs, as a collective, do more transactional advice than ongoing advice.

PS no i don't hate IFAs - but I do think that advice is often poor.

Whilst you are entitled to your opinion, you are not really in a position to say the advice is "often" poor. Certainly, regulatory statistics do not support that.

Peter314

beamyup wrote: »

Are there ANY stories here of low cost investments recommended by IFAs? e.g. pay IFA x thousand as a one off fee and they set up a portfolio for you with a total cost of < 0.4% PA or close?

Ok, I used an IFA for a DB transfer. Based on my attitude to risk, he recommended putting the proceeds in an Alliance Trust Savings SIPP and allocating 50% to Vanguard LS80, 50% to L&G Intl Index Trust.

According to the latest annual statement, the cumulative effect of costs and charges on return was 0.06%. I'm very happy with that.

beamyup

Peter314 wrote: »

Ok, I used an IFA for a DB transfer. Based on my attitude to risk, he recommended putting the proceeds in an Alliance Trust Savings SIPP and allocating 50% to Vanguard LS80, 50% to L&G Intl Index Trust.

According to the latest annual statement, the cumulative effect of costs and charges on return was 0.06%. I'm very happy with that.

That's pretty miraculous! are you sure that isn't just the platform charge? or do you mean 0.60%?

Just the L&G intl index trust would be 0.51% according to https://literature-lgim.huguenots.co.uk/srp/documents/?type=FS&ISIN=GB00B2Q6HV54
did you get a special deal?

Anyway - with those funds then its pretty OK charge-wise - and the IFA didn't want to charge an annual fee as well?

Peter314

beamyup wrote: »

That's pretty miraculous! are you sure that isn't just the platform charge? or do you mean 0.60%?

Just the L&G intl index trust would be 0.51% according to https://literature-lgim.huguenots.co.uk/srp/documents/?type=FS&ISIN=GB00B2Q6HV54
did you get a special deal?

Anyway - with those funds then its pretty OK charge-wise - and the IFA didn't want to charge an annual fee as well?

No special deal. I agree the numbers look surprisingly low but they're not overly expensive charges IMO. I'm presently holding about 27% cash, so that may be reducing the percentages a bit.

I just tried posting an extract showing the numbers but the site doesn't seem to allow images to be pasted.

It was done on a transactional basis. If I had wanted ongoing servicing, the choice of funds may have been different. But I didn't so we didn't go down that path.

beamyup

Agreed not overly expensive!
0.51% plus 0.18% spread is OK. and LS80 is good too. overall good advice - assuming that it does match your attitude to risk (fairly high) and preference for non-uk investment.
Thanks for sharing.

Peter314

Here's an extract:
https://www.dropbox.com/s/ct5xat5okayfe49/charges.JPG?dl=0