IHT and IFAs

[V8A*ndy]

Just to point out I know nothing about this subject...... However.

I just had a meeting with an IFA over IHT. (IFA trying to sell a relative a trust covered by an insurance policy).

After being presented with smoke and mirrors and lots of jargon. I eventually managed to ask....

"what are the charges and how much are you getting out of this" as there was none of this in his presentation.

The guy seemed to become very cagey and told me he would email me the info.

Well I got some of the info I asked for and was horrified to see that he would instantly earn 17K on the investment and if it grew by 6% a year he would earn £3.5K a year on commission on the trust alone.

What? for just giving him the chance to make an application online.

Grandma wasn't too pleased and didn't like the hard sell.

So what other options are out there and can you shop around?

[sumo69]

Try an IFA whose honest and has some integrity??

Where are you based?

David

[dalenorth]

IFAs still have the option of offering you the choice of paying by way of a fee, or recieve commission (until Dec 12).

I would ask the IFA there hourly rate and to justify to you the work that needs to be done.

[V8A*ndy]

dalenorth said:

IFAs still have the option of offering you the choice of paying by way of a fee, or recieve commission (until Dec 12).

I would ask the IFA there hourly rate and to justify to you the work that needs to be done.

Thanks for the reply and PM. I'm not at home at the moment but I am based in N.Ireland.

Ended up speaking to our solicitor and he is going to speak to his own IFA.

Really need to make a list of proper questions to ask. This is all very new to me and I don't want to feck it up.

IFA we seen has been phoning and emailing already putting the pressure on, obviously not wanting to lose commission.

[jonah35]

Trusts, business property relief schemes like eis', aim shares, gifting, insurance all play a part. If youre using trusts it could make sense to see a chartered fee based ifa.

Straight gifting is often not bad.

If its a discretionary trust there can be periodic and exit charges so need to make sure hes really switched on as trusts are complex and constantly changing.

What type of set up is being recommended, discounted gift trust, loan trust etc?

And also with trusts iht can potentially run to 14 years not 7 if mistakes are made!

£17k seems quite high but depends on amounts involved i suppose. If its £5m plus its not high in my opinion.

[V8A*ndy]

Thanks i'm not at home right now i'll dig the details out later.

Edited by V8A*ndy on Thursday 20th September 00:09

[jonah35]

Only you can decide how much you feel is too much to pay. I suppose a lot depends on the investment funds too, that kind of investment as is over £500k is likely to open up discretionary fund management rather than 'normal' investment funds.

Also ongoing charges need checking too.

[stevejh]

Unless things have changed since I was an IFA 10 months ago he should have told you up front how he got paid and what the likely commission would be and whether there was a fee option or a combination of a fee and discounted commission.

[Edinburger]

Very poor show from that IFA. If you PM me I can probably help you out with a few very good quality IFAs in Northern Ireland.

[b19rak]

As a rule of thumb I charge an initial 3% charge (paid by your initial lump sum) or a fee (£150 per hour). Ongoing service commission is 1% which should provide at least two meetings a year to review your situation and amend if appropriate.