Commission to Financial Advisors?
Discussion
Some thoughts please. We have made a series of investments since we were married, the vast majority in unit/investment trusts (sometimes with the PEP or ISA wrapper). They are doing fine and I have no problems with the various funds etc.
We usually went through financial advisors, not always the same one. As far as I was concerned once the advice had been given and the investment made that was their job done and I didn't need them until the next investment was to be made.
I was aware that they would be paid commission out of the investment funds as part of this arrangement.
To date we have not touched the investments, and each year we have received the usual staments and valuations from each financial house (fidelity, Aberdeen, Framlington etc etc).
Across the years We have received occasional emails from various financial advisors informing us that they had merged or bought out some other financial advisor and that were now on "their books".
Fast forward to now and we have received a letter from a large FA company informing us about important changes to the way we pay for our "investment services". The letter told us that some holding we have in Fidelity unit trusts are being converted to "Clean" shares in order the annual fees are more transparent. These are held by Fidelity in their Fundsnetwork platform service.
It gave us detail about whats changing and their fee and the services they provide. It also told us that we can terminate the service agreement.
Now this is where I put on my donkeys ears as to be honest I had not realised we were still paying for their services, I have always thought the commission we were paying (and taken from the fund) was something that came with the initial advice and was just a cost we had to bear for that advice.
Looking at the list of services they apparently are providing I can actually see no benefit in them and so want to stop the annual fee.
I rang the FA company up and they said yes we can terminate the fee but it may have some impacts on our investment administration. I contacted Fidelity who simply told us that FA's can be useful when investing money to give appropriate advice.
So, this question may seem obvious to most PH investment and financial wizards but can I simply terminate this (now clear) fee the FA company wants without it affecting my investments in any way?
I no longer need them for advice (I'd go local if I ever did need more FA investment advice) and the services they seem to provide I can find out simply be reading the info put out by the various investment houses.
Sorry if this is long winded, I'm obviously quite ignorant of the nuances of investing and FA fees/commission!
We usually went through financial advisors, not always the same one. As far as I was concerned once the advice had been given and the investment made that was their job done and I didn't need them until the next investment was to be made.
I was aware that they would be paid commission out of the investment funds as part of this arrangement.
To date we have not touched the investments, and each year we have received the usual staments and valuations from each financial house (fidelity, Aberdeen, Framlington etc etc).
Across the years We have received occasional emails from various financial advisors informing us that they had merged or bought out some other financial advisor and that were now on "their books".
Fast forward to now and we have received a letter from a large FA company informing us about important changes to the way we pay for our "investment services". The letter told us that some holding we have in Fidelity unit trusts are being converted to "Clean" shares in order the annual fees are more transparent. These are held by Fidelity in their Fundsnetwork platform service.
It gave us detail about whats changing and their fee and the services they provide. It also told us that we can terminate the service agreement.
Now this is where I put on my donkeys ears as to be honest I had not realised we were still paying for their services, I have always thought the commission we were paying (and taken from the fund) was something that came with the initial advice and was just a cost we had to bear for that advice.
Looking at the list of services they apparently are providing I can actually see no benefit in them and so want to stop the annual fee.
I rang the FA company up and they said yes we can terminate the fee but it may have some impacts on our investment administration. I contacted Fidelity who simply told us that FA's can be useful when investing money to give appropriate advice.
So, this question may seem obvious to most PH investment and financial wizards but can I simply terminate this (now clear) fee the FA company wants without it affecting my investments in any way?
I no longer need them for advice (I'd go local if I ever did need more FA investment advice) and the services they seem to provide I can find out simply be reading the info put out by the various investment houses.
Sorry if this is long winded, I'm obviously quite ignorant of the nuances of investing and FA fees/commission!
WindyCommon said:
Yes you can. And you should if they are doing nothing if value for you.
100%. Whatever anyone tells you you can do this. Financial advisers received 0.5% annual commission. This may not sound a lot but over 20 years this is 10% of your investments (including growth on them).If you are Happy with Fidelity Funds Network then the simplest thing to do might be to tell them you want to deal direct in clean funds, terminate any adviser connection and switch your other ISAs "in specie" (so the funds remain the same) over to Fidelity.
You can always pay an adviser a one off fee if you require future advice. Given your circumstances it seems like you are paying for something you are not getting as your adviser(s) should have been reviewing the ongoing suitability of these investments for you. If they have not been (or you do not require this) then it makes no sense to continue paying for it.
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