Stocks and Shares ISA charges
Discussion
In 2011 my wife and I through a financial adviser each started a stocks and shares ISA with Skandia, now Old Mutual Wealth. We topped up occasionally until 2016 when I retired. Current value for each is circa £ 75,000.
current charges per annum are;
Old mutual 0.25%
Advice charges 0.57%
Asset manager charges 1.13%
Total charges are 1.95% of average account value, over £1400 each this last year.
Are these charges reasonable? If not what are our options.
Thanks
current charges per annum are;
Old mutual 0.25%
Advice charges 0.57%
Asset manager charges 1.13%
Total charges are 1.95% of average account value, over £1400 each this last year.
Are these charges reasonable? If not what are our options.
Thanks
I'm not sure how an asset manager differs from a fund manager, but if he/she is turning in the performance then it may be justifiable. Do you know what funds etc you're invested in? What advice do you get for 0.57% every year?
I wouldn't want to be losing almost 2% a year. If the portfolio does 6%, you're losing a third of the growth.
I wouldn't want to be losing almost 2% a year. If the portfolio does 6%, you're losing a third of the growth.
Skandia/Old Mutual have always been like that, I had £250K with them. What’s annoying is they still take their 2%+ in years when your funds are losing money (sometimes in years when the market is doing well)
They pay financial advisors well, that’s also reflected in their charges structure
They pay financial advisors well, that’s also reflected in their charges structure
Phooey said:
For example- I’d happily pay someone 2% to return me 5% (after fees) per annum.
Anything less than that just stick it in a low-cost World tracker.
I’m not sure I’d agree with the numbers there . A world equity tracker has recently averaged about 6 to 8% for charges of about 0.2% or so?Anything less than that just stick it in a low-cost World tracker.
The oft quoted example of Fundsmith has averaged 18% or so over the past decade for a 1% fee, and there enough people who consider that poor value.
mikef said:
Skandia/Old Mutual have always been like that, I had £250K with them. What’s annoying is they still take their 2%+ in years when your funds are losing money (sometimes in years when the market is doing well)
They pay financial advisors well, that’s also reflected in their charges structure
You can have funds at OMW without an adviser. I assumed the OP meant was an external one.They pay financial advisors well, that’s also reflected in their charges structure
If you don't feel they're contributing anything you'd save £855pa. Do you ask them questions, eg about fund selection or tax allowances, and if so do you get answers that make sense? Do they contact you pro-actively?
Thanks for the replies.
Old Mutual has sent us each a 'Costs and Charges Annual Summary'. I think this is the first time it's come in this form.
Previously each six month statement had the charges listed, Advisor serving fee was 0.6% and typical charges of £150.
The value when I retired in April 2016 was £50,000.
Current value £ £75,000, so 50% over six years.
We each lost £7,500 through the collapse of Woodford.
The definitions given are ;
Asset manager charges, taken by the managers for the individual assets. (so I presume fees paid to the funds?)
Advice charges , fees paid to the financial advisor.
So my advisor charges the £420, they did give a lot of very useful advice when we started and again on my retirement.
Old Mutual has sent us each a 'Costs and Charges Annual Summary'. I think this is the first time it's come in this form.
Previously each six month statement had the charges listed, Advisor serving fee was 0.6% and typical charges of £150.
The value when I retired in April 2016 was £50,000.
Current value £ £75,000, so 50% over six years.
We each lost £7,500 through the collapse of Woodford.
The definitions given are ;
Asset manager charges, taken by the managers for the individual assets. (so I presume fees paid to the funds?)
Advice charges , fees paid to the financial advisor.
So my advisor charges the £420, they did give a lot of very useful advice when we started and again on my retirement.
Simpo Two said:
You can have funds at OMW without an adviser. I assumed the OP meant was an external one.
If you don't feel they're contributing anything you'd save £855pa. Do you ask them questions, eg about fund selection or tax allowances, and if so do you get answers that make sense? Do they contact you pro-actively?
OM just sold on my account to some outfit called Reassure, who get some pretty negative reviews online. Looking to move my funds away from themIf you don't feel they're contributing anything you'd save £855pa. Do you ask them questions, eg about fund selection or tax allowances, and if so do you get answers that make sense? Do they contact you pro-actively?
Do you know if your adviser is an IFA, or tied to Old Mutual?
Are you thinking of running a portfolio yourself, or how to achieve a less expensive advised portfolio?
The portfolio looks as if it is intended to return some dividend yield and relatively low volatility, and has something of UK bias, which is unfortunate as UK investment returns haven't exactly set the world on fire recently.
My impression is that with that approach unless fees are kept very low a significant part of the portfolio return goes in paying fees, and you end up still taking on some risk for relatively little reward.
At least a couple of those funds are available in various classes (a way of saying different investment conditions such as minimum investment size that charge different fee rates). As you're paying an average of 1.13% which is not low, it may be worth checking which class you're invested in and if you're eligible for a lower fee class.
Are you thinking of running a portfolio yourself, or how to achieve a less expensive advised portfolio?
The portfolio looks as if it is intended to return some dividend yield and relatively low volatility, and has something of UK bias, which is unfortunate as UK investment returns haven't exactly set the world on fire recently.
My impression is that with that approach unless fees are kept very low a significant part of the portfolio return goes in paying fees, and you end up still taking on some risk for relatively little reward.
At least a couple of those funds are available in various classes (a way of saying different investment conditions such as minimum investment size that charge different fee rates). As you're paying an average of 1.13% which is not low, it may be worth checking which class you're invested in and if you're eligible for a lower fee class.
Thats you there said:
In 2011 my wife and I through a financial adviser each started a stocks and shares ISA with Skandia, now Old Mutual Wealth. We topped up occasionally until 2016 when I retired. Current value for each is circa £ 75,000.
current charges per annum are;
Old mutual 0.25%
Advice charges 0.57%
Asset manager charges 1.13%
Total charges are 1.95% of average account value, over £1400 each this last year.
Are these charges reasonable? If not what are our options.
Thanks
The total costs are around "average", with a relatively low platform (typically 0.3%) and advice cost (typically 0.8% - with no observation on whether you are receiving good value or not). current charges per annum are;
Old mutual 0.25%
Advice charges 0.57%
Asset manager charges 1.13%
Total charges are 1.95% of average account value, over £1400 each this last year.
Are these charges reasonable? If not what are our options.
Thanks
https://www.ftadviser.com/investments/2020/07/21/a...
I think it would be worth questioning the asset manager charges given that you can buy low costs trackers for around 0.2-0.3% which will reduce performance drag (given that fund managers are highly unlikely to outperform net of charges over the long term) and also avoid losing money when a fund manager does something unexpected.
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