Schroder Income Maximiser Fund

munk

£43k in one fund is not a good idea. Don't go back to HSBC adviser if you want proper independent financial advice.

I thought that HSBC were one of the few high street banks that actually provided independent advice as opposed to 'tied' advice (where a bank adviser is 'tied' to a limited range of products that are provided by a financial company that are 'tied' to their bank - ie bank makes lots of money, customer makes negative money(!)). However given what you say - an adviser suggesting investing £43k in just one single fund - it does sound as though they're either actually tied to schroder products somehow or take full commission for the initial sale or maybe it's just the case he's not a very good financial adviser

Either way I would suggest paying for proper independent financial advice - dropping £43k into that single fund will have the following effects:

a) your mum will see 3-5% of her money disappear straight away in initial charges (if you go to an IFA or go DIY you won't pay that initial charge, or at least only pay a fraction - .25 or .5%). This happened to my mum and I was gutted when I found out

b) if/when the value of the fund drops significantly, she'll lose out more than if she'd balanced her money out across a number of different funds. Again this happened with my mum - fund didn't drop in value, just didn't do anything over 2yrs where the stockmarket was flying

a. I imagine will be unavoidable if you go with the tied agent, it's fairly inevitable that you'll be charged the full initial charge and the bank will take the lions share of the charge for themselves. With that in mind you might as well pay for independent financial advice instead: you'd only be paying .5% up front(?) for the initial advice and you shouldn't have to pay more than .5% in initial charges if the IFA gets decent discounts - plus if you're lucky you might even get some annual management charges discounted from your IFA.

The alternative is to do it yourself and go with someone like Hargreaves Lansdown who charge a max of .5% initially on most funds and then even rebate part of the annual management charges as well as offering a loyalty bonus. Just be sure not to drop it all into one fund!

End of day depends how hands on you want to be with it.

dunstonh

I thought that HSBC were one of the few high street banks that actually provided independent advice as opposed to 'tied' advice (where a bank adviser is 'tied' to a limited range of products that are provided by a financial company that are 'tied' to their bank - ie bank makes lots of money, customer makes negative money(!)). However given what you say - an adviser suggesting investing £43k in just one single fund - it does sound as though they're either actually tied to schroder products somehow or take full commission for the initial sale or maybe it's just the case he's not a very good financial adviser

They are whole of market but you wouldnt believe it if you analyse their recommendations. It's more like a panel as the same names come up time and again. I dont know their research process but I would guess (from what I have seen) that they have central research which is normally limited. Much of the time they seem to operate like tied agents with a larger product range. Plus it is still a salesforce. Sales targets, factory line advice (x number of appts a week), sales manager, incentives, maximum commissions....