Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • evergreen
    • By evergreen 9th Jul 18, 12:08 PM
    • 377Posts
    • 82Thanks
    evergreen
    Financial advisor
    • #1
    • 9th Jul 18, 12:08 PM
    Financial advisor 9th Jul 18 at 12:08 PM
    I was recently widowed and was advised to consult a financial advisor. They have quoted me a set up fee of 2% and ongoing management fee of 0.5%. I have never dealt with one before. Does that sound reasonable? Thanks
Page 1
    • simonineaston
    • By simonineaston 9th Jul 18, 12:18 PM
    • 131 Posts
    • 78 Thanks
    simonineaston
    • #2
    • 9th Jul 18, 12:18 PM
    • #2
    • 9th Jul 18, 12:18 PM
    Sounds fairly typical to me, although my own experience is limited to talking to three potential advisors. Standard advice for buying all sort of services is Get Three Quotes. I would ask them all for references, too.
    • campbell19925
    • By campbell19925 9th Jul 18, 12:20 PM
    • 98 Posts
    • 116 Thanks
    campbell19925
    • #3
    • 9th Jul 18, 12:20 PM
    • #3
    • 9th Jul 18, 12:20 PM
    I was recently widowed and was advised to consult a financial advisor. They have quoted me a set up fee of 2% and ongoing management fee of 0.5%. I have never dealt with one before. Does that sound reasonable? Thanks
    Originally posted by evergreen
    Very reasonable from the basis of what you're saying but hard to judge without more information.

    I work (training to become) as a financial adviser and we charge an ongoing 1% management fee. However, for this fee we actively manage client funds, inform clients of any changes to their pension pots and survey current market conditions which may affect their investments. We also meet once a year to discuss their pensions and give ongoing advice as a part of the 1% fee. Check what you're getting for the 0.5% fee and ask if you can cancel this at any time as you may not need or want this service further down the line.

    (This 0.5% fee can be quite costly, lets say you have a 100k pension - fairly typical - thats 500 per year x 20 years of management - thats 10,000 for the company for maybe doing nothing in your case?).

    The 2% is quite reasonable, probably sliding towards the cheap side of average - I assume they have facilitated a transfer for your pension into a more suitable fund?
    Last edited by campbell19925; 09-07-2018 at 12:22 PM.
    • HappyHarry
    • By HappyHarry 9th Jul 18, 12:26 PM
    • 682 Posts
    • 986 Thanks
    HappyHarry
    • #4
    • 9th Jul 18, 12:26 PM
    • #4
    • 9th Jul 18, 12:26 PM
    I was recently widowed and was advised to consult a financial advisor. They have quoted me a set up fee of 2% and ongoing management fee of 0.5%. I have never dealt with one before. Does that sound reasonable? Thanks
    Originally posted by evergreen
    Sorry for your loss.

    That charge depends on the amount you are talking about. It's reasonable for dealing with 100,000, and not reasonable if you're dealing with 1,000,000. It also depends where in the country you are (e.g. South East tends to more expensive than Norfolk)

    You say Financial Adviser. Do you mean Independent Financial Adviser (IFA)? If not, then I would suggest you find a new adviser who is independent.
    I am an Independent Financial Adviser. Any comments I make here are intended for information / discussion only. Nothing I post here should be construed as advice. If you are looking for individual financial advice, please contact a local Independent Financial Adviser.
    • dunstonh
    • By dunstonh 9th Jul 18, 12:31 PM
    • 93,458 Posts
    • 60,998 Thanks
    dunstonh
    • #5
    • 9th Jul 18, 12:31 PM
    • #5
    • 9th Jul 18, 12:31 PM
    They have quoted me a set up fee of 2% and ongoing management fee of 0.5%.
    Percentages are relative to the amount. Percentage is the dominant method but many firms will have a cap and collar or operate tiering on the charges so that the percentage figure doesnt become obscene.

    For example, they may have by say 2% initial with a 500 minimum and a 2500 maximum on the initial. If they didnt have a cap and collar it would mean 10,000 invested would pay just 200 and 500,000 invested with pay 10,000. So, when dealing with the initial, you need to refer to it in monetary terms to give context.

    The FCA recently reported that 0.5% pa is the dominant figure used for ongoing servicing. However, an increasing trend is for smaller values to be moving to 1% and 0.5% being used with higher values.

    I was recently widowed and was advised to consult a financial advisor.
    is this an IFA or an FA? Ideally, you should always use an IFA and not an FA.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • bostonerimus
    • By bostonerimus 9th Jul 18, 12:38 PM
    • 2,037 Posts
    • 1,356 Thanks
    bostonerimus
    • #6
    • 9th Jul 18, 12:38 PM
    • #6
    • 9th Jul 18, 12:38 PM
    Why do you need financial advice? What services are you hoping to buy?
    Misanthrope in search of similar for mutual loathing
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

1,242Posts Today

8,358Users online

Martin's Twitter
  • RT @thismorning: Worried about your finances? Or maybe you just want to know some tips and tricks for getting the best money-saving deals??

  • About to start @thismorning talking about why everyone should check their mortgage rates and then may be able to sa? https://t.co/ulkdPb031h

  • Today's Twitter poll: Do you / would you wear fur? Reports coming out today that even some fur labeled fake actual? https://t.co/QUh6P9TVgh

  • Follow Martin