Investment Fees and Charges

Albermarle

It is possible to have one off sessions (s)  with an IFA , to get you on the right track, but you would have to make the actual investments yourself ( pretty easy nowadays with on line investment platforms ) . 

[Deleted User]

What is your salary, WhenIGrowUp?
Are you comfortable to be hiring someone for £300 per week?

dunstonh

How much is it asking for? It will be an initial investment of around 650k.

So, you would expect the IFA charge to be around 0.5%.  platform charge around 0.25% and fund charges around 0.25%  (possibly less if fully passive used.  More if fully active used.  Hybrid of both active and passive is increasingly popular).  

Nowadays, the life assurance bond wrapper (particularly if offshore used) is more expensive than ISA, unwrapped and pension wrappers.  There can be advantages but be on guard.     A certain large FA salesforce known for its high charges very frequently puts people in investment bonds knowing that IFAs will find it hard to unwind them once they are in place.      Sometimes the reasons for trusts on they use are so obscure that whilst justifiable, they are virtually pointless.     Investment bonds do not suffer CGT but CGT at current rates is less than the internal taxation of an onshore bond.  An offshore bond gets gross roll up but defers the tax until later.

So, is this an IFA you are seeing or an FA? (or wealth manager)

WhenIGrowUp...

ZingPowZing said:

What is your salary, WhenIGrowUp?
Are you comfortable to be hiring someone for £300 per week?

Wow. 

When you put it like that...

WhenIGrowUp...

dunstonh said:

How much is it asking for? It will be an initial investment of around 650k.

So, you would expect the IFA charge to be around 0.5%.  platform charge around 0.25% and fund charges around 0.25%  (possibly less if fully passive used.  More if fully active used.  Hybrid of both active and passive is increasingly popular).  

Nowadays, the life assurance bond wrapper (particularly if offshore used) is more expensive than ISA, unwrapped and pension wrappers.  There can be advantages but be on guard.     A certain large FA salesforce known for its high charges very frequently puts people in investment bonds knowing that IFAs will find it hard to unwind them once they are in place.      Sometimes the reasons for trusts on they use are so obscure that whilst justifiable, they are virtually pointless.     Investment bonds do not suffer CGT but CGT at current rates is less than the internal taxation of an onshore bond.  An offshore bond gets gross roll up but defers the tax until later.

So, is this an IFA you are seeing or an FA? (or wealth manager)

It's an FA, thanks for this post @dunstonh - definitely food for thought.

dunstonh

WhenIGrowUp... said:

dunstonh said:

How much is it asking for? It will be an initial investment of around 650k.

So, you would expect the IFA charge to be around 0.5%.  platform charge around 0.25% and fund charges around 0.25%  (possibly less if fully passive used.  More if fully active used.  Hybrid of both active and passive is increasingly popular).  

Nowadays, the life assurance bond wrapper (particularly if offshore used) is more expensive than ISA, unwrapped and pension wrappers.  There can be advantages but be on guard.     A certain large FA salesforce known for its high charges very frequently puts people in investment bonds knowing that IFAs will find it hard to unwind them once they are in place.      Sometimes the reasons for trusts on they use are so obscure that whilst justifiable, they are virtually pointless.     Investment bonds do not suffer CGT but CGT at current rates is less than the internal taxation of an onshore bond.  An offshore bond gets gross roll up but defers the tax until later.

So, is this an IFA you are seeing or an FA? (or wealth manager)

It's an FA, thanks for this post @dunstonh - definitely food for thought.

Never use an FA.   It should be a choice between DIY or using an IFA.   The FA isn't from "St.." by any chance is it?

WhenIGrowUp...

@dunstonh it's not that particular company no, similar I would imagine though.

csgohan4

To be fair with that amount of money, I would probably use an IFA initially to reduce tax liability as best as possible and then go from there. 

Consider maxing your pension contributions and ISA and PB at present, but it will look like you will be investing in an unwrapped account. 

Albermarle

WhenIGrowUp... said:

ZingPowZing said:

What is your salary, WhenIGrowUp?
Are you comfortable to be hiring someone for £300 per week?

Wow. 

When you put it like that...

On another thread people were discussing their pension investment performance so far this year . It varied from minus 10% to plus around 25% . On a pot of £650K the difference is £227K , or around £4,700 per week . If we take out the extremes and just compare zero growth to an average growth probably around 7% .Then on a pot of £650K the difference between the two is £45K or around £930 per week .
Of course it is not guaranteed that having an IFA will always get you the best investment result , but food for thought maybe?

AnotherJoe

Albermarle said:

WhenIGrowUp... said:

ZingPowZing said:

What is your salary, WhenIGrowUp?
Are you comfortable to be hiring someone for £300 per week?

Wow. 

When you put it like that...

On another thread people were discussing their pension investment performance so far this year . It varied from minus 10% to plus around 25% . On a pot of £650K the difference is £227K , or around £4,700 per week . If we take out the extremes and just compare zero growth to an average growth probably around 7% .Then on a pot of £650K the difference between the two is £45K or around £930 per week .
Of course it is not guaranteed that having an IFA will always get you the best investment result , but food for thought maybe?

I think this is a common misconception that they can,  or even aspire to that. IFAs are not there to get you the maximum growth or pick investments that wlil likely outperform others.

They are there to put you in investments that match your risk profile, and also manage tax optimally for you.

If they knew what the best investments were they would invest in them themselves , and run their own private fund from their volcano based lair whilst they plotted world domination. I dont believe Dunston does that. Maybe he has a white cat?