IFA ongoing fee..Why pay?

DiggerUK

New always replaces old and long may it continue to benefit. 

Why do we need licensed black cabs with drivers who have "the knowledge"  when it is cheaper to have them replaced by Über with a sat nav.
As already pointed out earlier, we now have access to vast amounts of info unavailable 20 odd years ago. Info that not only empowers us to make our own financial decisions, but saves us a bloody fortune.

Its also nice to see the arrogance of the usual suspects finally being put in its place..._

Thrugelmir

DiggerUK said:

Why do we need licensed black cabs with drivers who have "the knowledge"  when it is cheaper to have them replaced by Über with a sat nav.

When everybody has a SatNav then everybody follows the same route. If you've ever been caught up in gridlock in London. You'll appreciate the value of a black cab. There'll go down alleys that you never knew existed. 

BananaRepublic

fred246 said:

I remember about 20 years ago an IFA giving a talk. They said commission had finished and so they were charging per hour. Hourly rate of £250 per hour. I have never seen so many incredulous glances go around a room. It was just unbelievable. So I can see why they charge a percentage like estate agents. They will charge 0.5% but never say how long their 'review' takes. So a portfolio of £500K costs £2.5K to 'review' it. Does it take 10 hours to read the list of investments? 0.5% is totally ridiculous but people keep paying it. Some even pay more. Customers should take the initiative and get it knocked down. IFAs won't reduce it to a reasonable level on their own initiative.

Prices in all professions don't just reflect the amount of time spent on the task. They include overheads, and an additional 'what they can get away with' amount. For an IFA, there is office rent, office expenses such as broadband rental and PC purchase, cost of tools to perform fund selection and risk asessment, various insurances (for an IT contractor these are less than £1,000 a year, an IFA might pay more due to increased risk), advertising costs, travelling costs, time spent travelling to and from prospective clients, and chatting to them, and so on. Then there is time spent training, and attending to admin tasks such as sorting out the broadband connection, or getting the heating fixed and so on. And then you have to add on a salary to provide a decent standard of living. If the IFA is self employed via a limited company, company incomings will pay corporation tax at 20% (after deducton of some expenses), followed by overheads. There is also VAT at some stage. The remainder goes in salary, but remember that they must pay employers and employees NI.

Is £250 absurd? I think so. If someone charges 0.5% on £500,000, they take £2,500. How many hours does that take? Ten hours at most is my guess. But, if someone could undercut other IFA professionals, they would do so as that's the beauty of the free market. To my knowledge no-one has. It's possible it's a closed shop, rather like lawyers, and I wouldn't trust them an inch if that. 

The finance industry is not like the nursing profession, I'm afraid, although an IFA could do with nursing skills to assist the client after they have told them their fee.

BananaRepublic

Thrugelmir said:

DiggerUK said:

Why do we need licensed black cabs with drivers who have "the knowledge"  when it is cheaper to have them replaced by Über with a sat nav.

When everybody has a SatNav then everybody follows the same route. If you've ever been caught up in gridlock in London. You'll appreciate the value of a black cab. There'll go down alleys that you never knew existed. 

And Uber has been in trouble for insufficient background checks on drivers and other problems.

AlanP_2

DiggerUK said:

New always replaces old and long may it continue to benefit. 

Why do we need licensed black cabs with drivers who have "the knowledge"  when it is cheaper to have them replaced by Über with a sat nav.
As already pointed out earlier, we now have access to vast amounts of info unavailable 20 odd years ago. Info that not only empowers us to make our own financial decisions, but saves us a bloody fortune.

Its also nice to see the arrogance of the usual suspects finally being put in its place..._

Apart from the points made above an Uber won't suit everybody.

My mid-80s in-laws wouldn't know what an Uber was let alone use one.

For some people it may be more convemnient to flag down a black cab that is driving by - can't do that with an unmarked Uber.

For some people it may be more convenient to take a black cab from a rank, at a station for example.

Its also nice to see the arrogance of the usual suspects finally being put in its place..._

As part of a post assuming that everyone wants to use the cheapest (and not necessarilly best, or most suitable option) that surely takes arrogance to the next level., 

Prism

BananaRepublic said:

fred246 said:

I remember about 20 years ago an IFA giving a talk. They said commission had finished and so they were charging per hour. Hourly rate of £250 per hour. I have never seen so many incredulous glances go around a room. It was just unbelievable. So I can see why they charge a percentage like estate agents. They will charge 0.5% but never say how long their 'review' takes. So a portfolio of £500K costs £2.5K to 'review' it. Does it take 10 hours to read the list of investments? 0.5% is totally ridiculous but people keep paying it. Some even pay more. Customers should take the initiative and get it knocked down. IFAs won't reduce it to a reasonable level on their own initiative.

Prices in all professions don't just reflect the amount of time spent on the task. They include overheads, and an additional 'what they can get away with' amount. For an IFA, there is office rent, office expenses such as broadband rental and PC purchase, cost of tools to perform fund selection and risk asessment, various insurances (for an IT contractor these are less than £1,000 a year, an IFA might pay more due to increased risk), advertising costs, travelling costs, time spent travelling to and from prospective clients, and chatting to them, and so on. Then there is time spent training, and attending to admin tasks such as sorting out the broadband connection, or getting the heating fixed and so on. And then you have to add on a salary to provide a decent standard of living. If the IFA is self employed via a limited company, company incomings will pay corporation tax at 20% (after deducton of some expenses), followed by overheads. There is also VAT at some stage. The remainder goes in salary, but remember that they must pay employers and employees NI.

Is £250 absurd? I think so. If someone charges 0.5% on £500,000, they take £2,500. How many hours does that take? Ten hours at most is my guess. But, if someone could undercut other IFA professionals, they would do so as that's the beauty of the free market. To my knowledge no-one has. It's possible it's a closed shop, rather like lawyers, and I wouldn't trust them an inch if that. 

The finance industry is not like the nursing profession, I'm afraid, although an IFA could do with nursing skills to assist the client after they have told them their fee.

I work in IT and get charged out at an average of about £500 per hour and sometimes more (this week is over £1000 per hour). Like you say there is a whole company of fixed costs, staff, admin and taxes to pay for before I get my bit out of that. Completely different job but £250 an hour doesn't sound that much to me.

BananaRepublic

Prism said:

BananaRepublic said:

fred246 said:

I remember about 20 years ago an IFA giving a talk. They said commission had finished and so they were charging per hour. Hourly rate of £250 per hour. I have never seen so many incredulous glances go around a room. It was just unbelievable. So I can see why they charge a percentage like estate agents. They will charge 0.5% but never say how long their 'review' takes. So a portfolio of £500K costs £2.5K to 'review' it. Does it take 10 hours to read the list of investments? 0.5% is totally ridiculous but people keep paying it. Some even pay more. Customers should take the initiative and get it knocked down. IFAs won't reduce it to a reasonable level on their own initiative.

Prices in all professions don't just reflect the amount of time spent on the task. They include overheads, and an additional 'what they can get away with' amount. For an IFA, there is office rent, office expenses such as broadband rental and PC purchase, cost of tools to perform fund selection and risk asessment, various insurances (for an IT contractor these are less than £1,000 a year, an IFA might pay more due to increased risk), advertising costs, travelling costs, time spent travelling to and from prospective clients, and chatting to them, and so on. Then there is time spent training, and attending to admin tasks such as sorting out the broadband connection, or getting the heating fixed and so on. And then you have to add on a salary to provide a decent standard of living. If the IFA is self employed via a limited company, company incomings will pay corporation tax at 20% (after deducton of some expenses), followed by overheads. There is also VAT at some stage. The remainder goes in salary, but remember that they must pay employers and employees NI.

Is £250 absurd? I think so. If someone charges 0.5% on £500,000, they take £2,500. How many hours does that take? Ten hours at most is my guess. But, if someone could undercut other IFA professionals, they would do so as that's the beauty of the free market. To my knowledge no-one has. It's possible it's a closed shop, rather like lawyers, and I wouldn't trust them an inch if that. 

The finance industry is not like the nursing profession, I'm afraid, although an IFA could do with nursing skills to assist the client after they have told them their fee.

I work in IT and get charged out at an average of about £500 per hour and sometimes more (this week is over £1000 per hour). Like you say there is a whole company of fixed costs, staff, admin and taxes to pay for before I get my bit out of that. Completely different job but £250 an hour doesn't sound that much to me.

You are charged out at a hell of a rate. A typical IT contractor will charge ~£40-80 / hour plus the agents cut, so let’s say up to £100/ hour. 

NottinghamKnight

BananaRepublic said:

Prism said:

BananaRepublic said:

fred246 said:

I remember about 20 years ago an IFA giving a talk. They said commission had finished and so they were charging per hour. Hourly rate of £250 per hour. I have never seen so many incredulous glances go around a room. It was just unbelievable. So I can see why they charge a percentage like estate agents. They will charge 0.5% but never say how long their 'review' takes. So a portfolio of £500K costs £2.5K to 'review' it. Does it take 10 hours to read the list of investments? 0.5% is totally ridiculous but people keep paying it. Some even pay more. Customers should take the initiative and get it knocked down. IFAs won't reduce it to a reasonable level on their own initiative.

Prices in all professions don't just reflect the amount of time spent on the task. They include overheads, and an additional 'what they can get away with' amount. For an IFA, there is office rent, office expenses such as broadband rental and PC purchase, cost of tools to perform fund selection and risk asessment, various insurances (for an IT contractor these are less than £1,000 a year, an IFA might pay more due to increased risk), advertising costs, travelling costs, time spent travelling to and from prospective clients, and chatting to them, and so on. Then there is time spent training, and attending to admin tasks such as sorting out the broadband connection, or getting the heating fixed and so on. And then you have to add on a salary to provide a decent standard of living. If the IFA is self employed via a limited company, company incomings will pay corporation tax at 20% (after deducton of some expenses), followed by overheads. There is also VAT at some stage. The remainder goes in salary, but remember that they must pay employers and employees NI.

Is £250 absurd? I think so. If someone charges 0.5% on £500,000, they take £2,500. How many hours does that take? Ten hours at most is my guess. But, if someone could undercut other IFA professionals, they would do so as that's the beauty of the free market. To my knowledge no-one has. It's possible it's a closed shop, rather like lawyers, and I wouldn't trust them an inch if that. 

The finance industry is not like the nursing profession, I'm afraid, although an IFA could do with nursing skills to assist the client after they have told them their fee.

I work in IT and get charged out at an average of about £500 per hour and sometimes more (this week is over £1000 per hour). Like you say there is a whole company of fixed costs, staff, admin and taxes to pay for before I get my bit out of that. Completely different job but £250 an hour doesn't sound that much to me.

You are charged out at a hell of a rate. A typical IT contractor will charge ~£40-80 / hour plus the agents cut, so let’s say up to £100/ hour. 

IT in financial services maybe......

Prism

BananaRepublic said:

Prism said:

BananaRepublic said:

fred246 said:

I remember about 20 years ago an IFA giving a talk. They said commission had finished and so they were charging per hour. Hourly rate of £250 per hour. I have never seen so many incredulous glances go around a room. It was just unbelievable. So I can see why they charge a percentage like estate agents. They will charge 0.5% but never say how long their 'review' takes. So a portfolio of £500K costs £2.5K to 'review' it. Does it take 10 hours to read the list of investments? 0.5% is totally ridiculous but people keep paying it. Some even pay more. Customers should take the initiative and get it knocked down. IFAs won't reduce it to a reasonable level on their own initiative.

Prices in all professions don't just reflect the amount of time spent on the task. They include overheads, and an additional 'what they can get away with' amount. For an IFA, there is office rent, office expenses such as broadband rental and PC purchase, cost of tools to perform fund selection and risk asessment, various insurances (for an IT contractor these are less than £1,000 a year, an IFA might pay more due to increased risk), advertising costs, travelling costs, time spent travelling to and from prospective clients, and chatting to them, and so on. Then there is time spent training, and attending to admin tasks such as sorting out the broadband connection, or getting the heating fixed and so on. And then you have to add on a salary to provide a decent standard of living. If the IFA is self employed via a limited company, company incomings will pay corporation tax at 20% (after deducton of some expenses), followed by overheads. There is also VAT at some stage. The remainder goes in salary, but remember that they must pay employers and employees NI.

Is £250 absurd? I think so. If someone charges 0.5% on £500,000, they take £2,500. How many hours does that take? Ten hours at most is my guess. But, if someone could undercut other IFA professionals, they would do so as that's the beauty of the free market. To my knowledge no-one has. It's possible it's a closed shop, rather like lawyers, and I wouldn't trust them an inch if that. 

The finance industry is not like the nursing profession, I'm afraid, although an IFA could do with nursing skills to assist the client after they have told them their fee.

I work in IT and get charged out at an average of about £500 per hour and sometimes more (this week is over £1000 per hour). Like you say there is a whole company of fixed costs, staff, admin and taxes to pay for before I get my bit out of that. Completely different job but £250 an hour doesn't sound that much to me.

You are charged out at a hell of a rate. A typical IT contractor will charge ~£40-80 / hour plus the agents cut, so let’s say up to £100/ hour. 

That is my point. I don't get that. The end customer pays that for the total solution which pays in part for the whole organisation

Cus

From what I recall, an IT consultancy in financial services would charge the client firm anything from £1000 a day for a junior to £7500 a day for a senior head. Contractors would be a lot less, say £400 to £1250 a day.