IFA typical charges
Discussion
I’m trying to get an idea of what IFA’s typically charge for advice and ongoing management fee’s
I’ve spoken to one who charges a flat up front fee of £4k then an ongoing yearly fee of 1% (tiered) of managed assets, I guess the theory is that the advice should out perform your current portfolio and as such that 1% should easily be covered.
In trying to get a guage of how this compares
Cheers
I’ve spoken to one who charges a flat up front fee of £4k then an ongoing yearly fee of 1% (tiered) of managed assets, I guess the theory is that the advice should out perform your current portfolio and as such that 1% should easily be covered.
In trying to get a guage of how this compares
Cheers
You’ll usually pay an upfront onboarding fee, along with other fees:
Platform fee
DIM fee (if they’re using one other than just platform default)
Advice fee
They all vary, and the advice fee can be well north of 1%.
Smaller, independent IFAs will typically have smaller fees as lower overheads.
Platform fee
DIM fee (if they’re using one other than just platform default)
Advice fee
They all vary, and the advice fee can be well north of 1%.
Smaller, independent IFAs will typically have smaller fees as lower overheads.
nickfrog said:
How would they outperform the market?
I didn’t say outperform the market, what I mean is that if you’re in the standard lifestyle pension, they can advice on a better risk profile, based on their expertise.They can also advice on being more tax efficient and estate planning along with VCTs and EISs
michael_JCWS said:
nickfrog said:
How would they outperform the market?
I didn t say outperform the market, what I mean is that if you re in the standard lifestyle pension, they can advice on a better risk profile, based on their expertise.They can also advice on being more tax efficient and estate planning along with VCTs and EISs
They definitely can advise you to take more or less risk than the default pension fund but do you need to pay that much money for that? Over say 30 years, that's a huge chunk.
As for tax efficiency and estate planning, that is really something they you can understand yourself. In fact I reckon it's something you should understand yourself.
I don't know about VCT/EIS, this might be where the value is.
This thread has been here before and immediately moves off the question and becomes a debate on the value of the IFA not the cost .
I use a small independent and it's c.1% , platform fees and ongoing advice. I am three years in and the ongoing advice is less value to me now as I have understood it myself. I may become independent on this next year .
I don't service my cars at main dealers or independent garages. This is because I have a good knowledge of motor vehicles repairs and maintenance, built up over 40 years .
Many people use garages to maintain their vehicles, it's not a failing ,nor do they need to be called stupid ,nor is it necessary for them to do their own maintenance.
I use a small independent and it's c.1% , platform fees and ongoing advice. I am three years in and the ongoing advice is less value to me now as I have understood it myself. I may become independent on this next year .
I don't service my cars at main dealers or independent garages. This is because I have a good knowledge of motor vehicles repairs and maintenance, built up over 40 years .
Many people use garages to maintain their vehicles, it's not a failing ,nor do they need to be called stupid ,nor is it necessary for them to do their own maintenance.
nickfrog said:
I don't know about VCT/EIS, this might be where the value is.
My FA has put forward various suggestions for these over the years but equally as your other post ,understanding the offerings isn’t particularly complicated. Always do your own research.
I have done some of mine thanks to him although it’s the choice of PE entity that is more important especially on Fund type as opposed to single stock private investments.
And never invest solely on the basis of the tax relief ie the investment itself needs to make sense to you.
Little published detail about the latest budget is that Rachel for some reason has decided to reduce the tax relief to 20% on VCT’s.
cliffords said:
This thread has been here before and immediately moves off the question and becomes a debate on the value of the IFA not the cost .
I use a small independent and it's c.1% , platform fees and ongoing advice. I am three years in and the ongoing advice is less value to me now as I have understood it myself. I may become independent on this next year .
I don't service my cars at main dealers or independent garages. This is because I have a good knowledge of motor vehicles repairs and maintenance, built up over 40 years .
Many people use garages to maintain their vehicles, it's not a failing ,nor do they need to be called stupid ,nor is it necessary for them to do their own maintenance.
This is a decent summary. I personally don't use an IFA, but my father does. I use a small independent and it's c.1% , platform fees and ongoing advice. I am three years in and the ongoing advice is less value to me now as I have understood it myself. I may become independent on this next year .
I don't service my cars at main dealers or independent garages. This is because I have a good knowledge of motor vehicles repairs and maintenance, built up over 40 years .
Many people use garages to maintain their vehicles, it's not a failing ,nor do they need to be called stupid ,nor is it necessary for them to do their own maintenance.
I would be happy(ish) to pay a reasonable one off fee for advice at a fixed point in time, but I am very reluctant to lose ~1% per year given the maths of compound interest and the effect of this "small" annual fee.....But I'm yet to find an IFA that offers a believable one off service offering.
The value to him is that he can rest easier knowing that someone else is doing the worrying and organising. He is more than happy with the performance and it gives him someone to lean on for a whole bunch of stuff (e.g. IHT planning and options etc).
Red9zero said:
My wife charges £2.5k for basic pension advice. I overhear her on the phone sometimes and there is often a pause after she tells the client the cost. I'm sure some people think she should give them advice free of charge.
Isn't it a question of time vs money though and that the client is just doing the maths in their head - i.e. If I was to pay someone £2.5K for advice, I'd expect that they'd be putting in a fair number of hours to justify that level of spend. What hourly rate does that work out at?
fat80b said:
Red9zero said:
My wife charges £2.5k for basic pension advice. I overhear her on the phone sometimes and there is often a pause after she tells the client the cost. I'm sure some people think she should give them advice free of charge.
Isn't it a question of time vs money though and that the client is just doing the maths in their head - i.e. If I was to pay someone £2.5K for advice, I'd expect that they'd be putting in a fair number of hours to justify that level of spend. What hourly rate does that work out at?
) is that the company she works for provide financial advice to a pension company when the customers want to take money etc from their pensions. I believe they can do this themselves, but they at least have had to have spoken to an IFA. I think the price is a bit of a shock to a lot of people, as one minute you are talking to your pension company about moving some money, then you are transferred to an IFA who tells you they want £2.5k off you. From what I am told, you are paying for their expertise as well as a decent insurance policy. She also does investments too, for which the advice is more expensive, but she deals with mainly higher end clients for that. cliffords said:
This thread has been here before and immediately moves off the question and becomes a debate on the value of the IFA not the cost .
I use a small independent and it's c.1% , platform fees and ongoing advice. I am three years in and the ongoing advice is less value to me now as I have understood it myself. I may become independent on this next year .
I don't service my cars at main dealers or independent garages. This is because I have a good knowledge of motor vehicles repairs and maintenance, built up over 40 years .
Many people use garages to maintain their vehicles, it's not a failing ,nor do they need to be called stupid ,nor is it necessary for them to do their own maintenance.
At least no one has immediately moved off the question to get into car servicing.I use a small independent and it's c.1% , platform fees and ongoing advice. I am three years in and the ongoing advice is less value to me now as I have understood it myself. I may become independent on this next year .
I don't service my cars at main dealers or independent garages. This is because I have a good knowledge of motor vehicles repairs and maintenance, built up over 40 years .
Many people use garages to maintain their vehicles, it's not a failing ,nor do they need to be called stupid ,nor is it necessary for them to do their own maintenance.
Talking about hourly rates is red herring. What matters is what you get for what you pay.
Getting an IFA for "pension only" is usually pointless. Pension lives in the context of your overall financial situation, family commitments etc.
IMO it's better to pay a higher one-off fee and avoid the ongoing charge completely. In my simple mind 1% a year for 25 years means the adviser has taken 25% of everything you've got.
As others have suggested, some reading on this forum can give you a great start and there a a number of people happy to assist with specific questions. It's not paid-for advice with professional insurance but it's very, very cheap.
The basics,
Use the tax wrappers of ISA and SIPP (alongside any occupational pension)
Keep costs down. This makes a massive difference over the longer term.
Decide on a sensible strategy for the risk you are willing to accept and stick with it.
Don't panic at the first sight of a downturn; trust your strategy.
Getting an IFA for "pension only" is usually pointless. Pension lives in the context of your overall financial situation, family commitments etc.
IMO it's better to pay a higher one-off fee and avoid the ongoing charge completely. In my simple mind 1% a year for 25 years means the adviser has taken 25% of everything you've got.
As others have suggested, some reading on this forum can give you a great start and there a a number of people happy to assist with specific questions. It's not paid-for advice with professional insurance but it's very, very cheap.
The basics,
Use the tax wrappers of ISA and SIPP (alongside any occupational pension)
Keep costs down. This makes a massive difference over the longer term.
Decide on a sensible strategy for the risk you are willing to accept and stick with it.
Don't panic at the first sight of a downturn; trust your strategy.
Panamax said:
Talking about hourly rates is red herring. What matters is what you get for what you pay.
Getting an IFA for "pension only" is usually pointless. Pension lives in the context of your overall financial situation, family commitments etc.
IMO it's better to pay a higher one-off fee and avoid the ongoing charge completely. In my simple mind 1% a year for 25 years means the adviser has taken 25% of everything you've got.
As others have suggested, some reading on this forum can give you a great start and there a a number of people happy to assist with specific questions. It's not paid-for advice with professional insurance but it's very, very cheap.
The basics,
Use the tax wrappers of ISA and SIPP (alongside any occupational pension)
Keep costs down. This makes a massive difference over the longer term.
Decide on a sensible strategy for the risk you are willing to accept and stick with it.
Don't panic at the first sight of a downturn; trust your strategy.
My wife normally directs people to Pensionwise if they don't want to pay her fees. Getting an IFA for "pension only" is usually pointless. Pension lives in the context of your overall financial situation, family commitments etc.
IMO it's better to pay a higher one-off fee and avoid the ongoing charge completely. In my simple mind 1% a year for 25 years means the adviser has taken 25% of everything you've got.
As others have suggested, some reading on this forum can give you a great start and there a a number of people happy to assist with specific questions. It's not paid-for advice with professional insurance but it's very, very cheap.
The basics,
Use the tax wrappers of ISA and SIPP (alongside any occupational pension)
Keep costs down. This makes a massive difference over the longer term.
Decide on a sensible strategy for the risk you are willing to accept and stick with it.
Don't panic at the first sight of a downturn; trust your strategy.
nickfrog said:
Unless you're very thick, or can't be bothered, it's extremely poor value.
The fiscal information is in the public domain for starters.
Understanding asset classes, diversification and risk levels is relatively easy, so educate yourself.
The fiscal information is in the public domain for starters.
Understanding asset classes, diversification and risk levels is relatively easy, so educate yourself.
Exactly.A fair part of that education is logic.
Here is one example - what goods and services do people continue to buy, during economic hard times?
And when the portfolio reaches seven figures, paying an IFA 1% (£10,000+) every year, might not be quite so apppealing.
Simpo Two said:
Jon39 said:
Here is one example - what goods and services do people continue to buy, during economic hard times?
Bog roll! (data: Covid pandemic 2020)Ah, the Forest Products and Paper sector (if they still call it that in the FT).
A FTSE 100 business in that sector is Bunzl plc.
There is something about that firm, which does not excite me.
Red9zero said:
fat80b said:
Red9zero said:
My wife charges £2.5k for basic pension advice. I overhear her on the phone sometimes and there is often a pause after she tells the client the cost. I'm sure some people think she should give them advice free of charge.
Isn't it a question of time vs money though and that the client is just doing the maths in their head - i.e. If I was to pay someone £2.5K for advice, I'd expect that they'd be putting in a fair number of hours to justify that level of spend. What hourly rate does that work out at?
) is that the company she works for provide financial advice to a pension company when the customers want to take money etc from their pensions. I believe they can do this themselves, but they at least have had to have spoken to an IFA. I think the price is a bit of a shock to a lot of people, as one minute you are talking to your pension company about moving some money, then you are transferred to an IFA who tells you they want £2.5k off you. From what I am told, you are paying for their expertise as well as a decent insurance policy. She also does investments too, for which the advice is more expensive, but she deals with mainly higher end clients for that. Gassing Station | Finance | Top of Page | What's New | My Stuff