I have recently received some financial Advice from an IFA through a work scheme. I have approx £50,000 to invest. After completing an attitude to risk form the IFA said that i may be able to get returns of C.8%.
He said that his initial fees would be £1,200, with "Annual reviews - hourly rate offset by any trail commission/fee"
Does this sound sensible, is commission based fees a bad way to go?
Any help would be greatly appreciated
Questions And Answers
IFA Quote, Is it Right?
asked by Nick Schu posted 2 Years ago at 11:20
1-5 of 5 Answers
www.Fairtrade-ifa.co.uk answered 2 Years ago at 12:54, last modified: 2 Years ago at 11:54Nick
Initial commission is negotiable ask them to do it for less! Annual reviews’ depend on what type of contract its or how they will report this information to you will you have 24/7 online valuations?
Steve Fairtarde IFA
Carl Hope answered 2 Years ago at 14:59, last modified: 2 Years ago at 13:59I would negotiate if you have chosen to pay by fee, I would also find out what the hourly rate is for reviews, if you are being told the returns are circa 8% is there a downside and are you prepared to take a risk with your capital?
Nick Schu answered 2 Years ago at 9:51, last modified: 2 Years ago at 8:51Thanks Steve and Carl, I'm not sure about the 24/7 review, i'll ask, also i scribbled down the hourly rates some where and i'll get those back to you. From what i understand the risk is acceptable on my capital.
Thanks for the help guys
Alan Flinders answered 2 Years ago at 9:52, last modified: 2 Years ago at 8:52The first question to answer is , is this investment right for you and your circumstances. Secondly what are the 'Total' charges, the IFA initial fee may only be a part of this. If the total set up cost is £1,200 (2.4%) it does not appear unreasonable, cheapest is not always best especially when requiring quality financial advice. The third is do you think the IFA/Product can deliver. Alan
Gordon Hewitt answered 2 Years ago at 18:24, last modified: 2 Years ago at 17:24Nick, you have asked an IFA for advice but do not appear to tust his advice, I agree that on £50,000, 2.4% (£1200) is reasonable and within the general fee based area of 2-3%.
On going advice is always difficult to work out, My client agreement (presume you have signed one) clearly states what the service schedule is, (based on a percentage of total funds under management) and the hourly charge for any additional work,administration, adviser etc.
Also check to see if your adviser has diploma status,or is working towards it, beyond 2013 he will not be able to advise if this has not been attained
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