IFA Charges

bowlhead99

fred246 said:

Would like to see a 'breakdown' on the £4.5K. How much of that is the 'getting out of bed fee' and how much is the 'putting on spectacles fee'?. £4.5K is a complete and utter joke.

As you have pointed out, it's only an hours work a year, and they are less qualified than a dentist, so probably should only be able to charge a little over minimum wage, so a tenner a year should be enough. I suppose they have some sort of costs of being in business, so maybe £20.

As you say, if people keep paying the £4500 they will keep charging it. What you should do is change the system from within: become an IFA customer, and then refuse to keep paying the £4500, so they will no longer be able to keep charging it. Instead, they will charge a more reasonable figure, like £10-20.

fred246

bowlhead99 said:

fred246 said:

Would like to see a 'breakdown' on the £4.5K. How much of that is the 'getting out of bed fee' and how much is the 'putting on spectacles fee'?. £4.5K is a complete and utter joke.

As you have pointed out, it's only an hours work a year, and they are less qualified than a dentist, so probably should only be able to charge a little over minimum wage, so a tenner a year should be enough. I suppose they have some sort of costs of being in business, so maybe £20.

As you say, if people keep paying the £4500 they will keep charging it. What you should do is change the system from within: become an IFA customer, and then refuse to keep paying the £4500, so they will no longer be able to keep charging it. Instead, they will charge a more reasonable figure, like £10-20.

Have you not even read my first post? I have already suggested 2.5 to 5 times as much. £50.

dunstonh

Back on the question asked by the OP, as mentioned 0.5% should be the ballpark for ongoing.   You may well find little or no charge for the initial given the size of your investments.  If there is an initial, it should be relatively small.      If cost is your focus, then the platform charge should be in the 0.1x% range.  However, service with those tends not to be strong (such as closing their offices and telephones completely and not opening post during lockdown and only working via email with 10 day turnarounds).    The low 0.2x% is where the stronger ones kick in.
Avoid the ones that use a DFM.   That is a layer of additional charges that can be avoided.  Although if you are (normally) a frequent traveller and go missing for months on end, it can be sensible.  Fund charges should be looking at around 0.1x% to 0.5x% typically nowadays (the lower the risk the portfolio, the lower the charges on funds usually are)

As with all areas of service and retail, you will find some that charge way beyond that

fred246

Offer them 0.25%. It's still silly money for the service provided. They can only say no. Just find another IFA. There's plenty of them.

zagfles

fred246 said:

bowlhead99 said:

fred246 said:

Would like to see a 'breakdown' on the £4.5K. How much of that is the 'getting out of bed fee' and how much is the 'putting on spectacles fee'?. £4.5K is a complete and utter joke.

As you have pointed out, it's only an hours work a year, and they are less qualified than a dentist, so probably should only be able to charge a little over minimum wage, so a tenner a year should be enough. I suppose they have some sort of costs of being in business, so maybe £20.

As you say, if people keep paying the £4500 they will keep charging it. What you should do is change the system from within: become an IFA customer, and then refuse to keep paying the £4500, so they will no longer be able to keep charging it. Instead, they will charge a more reasonable figure, like £10-20.

Have you not even read my first post? I have already suggested 2.5 to 5 times as much. £50.

The problem with the comparison with dentists is like you say, they are more qualified, it takes 4-5 years of hard study, which means they tend to get things right. IFAs often don't, resulting in sometimes big payouts. If dentists were less qualified, they'd probably end up charging more because more people would sue them for negligence! And IFAs handle vast amounts, so the payouts can be vast.

I've just been researching an IFA for a relative, they're quite small, seem reputable, get good reviews, but they've had 9 ombudsman decisions go against them in the last year alone! Stuff like Cape Verde investments! So all IFAs will pay for this through their insurance, just like eg all young people pay high car insurance because young people are more likely to have accidents.

fred246

So the more incompetent you are the more insurance you have to pay and the more you charge? Yes that sort of makes sense. Dunstonh always says they charge a lot because they pay lots for insurance but then he says very few people complain about IFAs. IFAs have lost me thousands but I have never complained.

thegentleway

fred246 said:

So the more incompetent you are the more insurance you have to pay and the more you charge? Yes that sort of makes sense. Dunstonh always says they charge a lot because they pay lots for insurance but then he says very few people complain about IFAs. IFAs have lost me thousands but I have never complained.

You're complaining (quite a lot) about their charges

BananaRepublic

fred246 said:

£50 to check it over would be about right. What does a dentist charge for a check up? They are far more qualified than an IFA.

Yes, but an IFA extracts money rather than teeth. 

zagfles

fred246 said:

So the more incompetent you are the more insurance you have to pay and the more you charge? Yes that sort of makes sense. Dunstonh always says they charge a lot because they pay lots for insurance but then he says very few people complain about IFAs. IFAs have lost me thousands but I have never complained.

Yes in a lot of cases you'd need to know the advice was bad to consider a formal complaint, and except in the most obvious cases (eg Cape Verde etc), to know that you'd need to understand investments and if you understood them you wouldn't have needed the advice in the first place!

Wildsound

fred246 said:

£50 to check it over would be about right. What does a dentist charge for a check up? They are far more qualified than an IFA.

I'm curious to know what you're expecting an IFA to do for you when you go to see one?