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Has anyone invested in shares/unit trusts etc via a Financial Adviser
Has anyone invested in shares/unit trusts etc via a Financial Adviser
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The swings are not so good in a with profits fund posy, because of the 'smoothing' process. The problem with these, although safer, there are times when adjustments have to be made and this is one of those times. By the time the fund recovers many months pension would have been paid at lower rates. For other funds your reply is 100% accurate
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That isn't true PP. I was an IFA and now retired. What IFA's actually get paid is an up-front commission that has a two (or more) year consolidation. What this means in reality is that the commission repaid is pro-rata so if 12 months premiums were paid then 50% would have to be returned. Also, if a policy gets topped up the IFA will again earn the commission over the same consolidation period for the top up.
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Aspro I certainly based my comments on unit based funds ,certainly not so called with profit funds.
My experience is through having been a trustee of both a defined benefit and defined contribution schemes. |
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There's been a lot of research into whether lump sum or drip feed works best. Most of the evidence points to lump sum winning 2/3. However, it's not something I would entertain in this crash.
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I appreciate your comments were unit linked posy, but my point was just highlighting that some funds will unduly suffer, even after a full recovery.
As for DB and DC schemes, I know what one I'd rather be in now. This could reignite the market for annuities. |
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Not if sterling is spanked and/or a sustained period of high inflation.
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The Coronavirus Job Retention Scheme is well intentioned but it could bankrupt the country. I can't see what can stop people taking the 80% and working another job for cash, or off the grid anyway. Or even colluding with small business owners and getting 80% and cash for the same job.
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Fear will stop a few, but greed will most certainly win the day... it always does.
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cant see nothing wrong to take the 80%, and if your employer doesnt want you, just take another job anyway, it would be just classed as 2nd job , wouldnt it,
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It depends on a combination of the size of the pot ,any 'other income' and level of investor sophistication ,but there's often a place for using part of the pot to acquire an annuity.
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in an ideal world, index linked are very expensive though.
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I've got a DB index linked, capped at 5% unfortunately.
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PP... I'll give you an example. A client takes out a life assurance policy at a cost of say £30 per month. The IFA will get approximately £600 for this, a part of which could go to the brokers, but that's irrelevant. It doesn't matter if he pays up front, the monthly cost is what it is and the commission for the premium/term is set, however; the consolidation period for this life assurance is (say) two years, but the guy only pays one year's premium and then cancels the policy, then the adviser would then have to pay half of the commission back. If the client had cancelled after just 6 months then the adviser pays back 75%... it is all pro-rata.
However; after the two years is up the adviser continues to get paid a 'trail commission' for every 'single' premium thereafter, until the policy ends or is cancelled beforehand. This is only a few pence, but pennies turn into pounds and a lot of clients, paying a lot of premiums, means a lot of trail commission, which is basically an IFA's basic wage. |
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The IFA would get £600 within days of the policy starting and would only have to pay something back if the policy was cancelled within that two/four year period (life assurance is generally 4 years). After that then no it isn't pennies; it could actually work out to a few pounds for just one policy with a decent monthly premium, but it is paid on every individual monthly payment thereafter. A good friend of mine, who is still an IFA, has a trail commission of £60k per annum.
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Not really as that isn't the whole story, trail is made up of a lot of things, and lump sum investments, transfers etc is where the real money is. A good adviser who has his client's interests at heart will offer a service, which includes an annual face-to-face review, which ensures that a client can keep in touch, once a year, with our without spending any more cash, in addition to the adviser keeping track of their funds throughout the year. For this service the IFA will add an agreed charge to the fund of (variable but let's say 0.25%) - If just one fund is £1m (highly likely), that's £2,500 income, per annum and a seasoned IFA will have many clients with many investments all paying an annual fee... £60k is quite modest.
And even on top of all of this there is the 'general branch' side of things, which is home and car insurance. The IFA could get up to 20% of these premiums and as they are renewed every year, usually by direct debit, then every year he will get paid without doing another thing. One guy at the Prudential (when I worked for them) was earning £30,000 per annum off general policies alone. The shrewd advisers have a large general insurance base. |
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As I said, he must be a "seasoned" IFA with many clients.
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Indeed, but just to confirm your original post, an IFA will get paid at all levels of investment and if the client increases two years later then they'll get that £600 again with another two year consolidation. Every top up has an up front, a consolidation and then a trail.
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if you're getting 80% why would you take a second job ?
 ...you already have enough to live on .otherwise it's greed ,taking a job someone else might need. ... worse even than the food and toilet roll hoarders imo . |
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7 so called guru,s in mail basically saying stay put
all this talk of rebounds, tick ups etc ,if your over 60 not 66 ,not in work place and your pots have gone completely not even sure if than can happen, do you really think people even over 50 are going to carry on paying in 200 quid a month,even if they had the 200 to put in ,its the talk of madness for the every day jo public,auto enrolment etc the investing game will be over for us and them, these guru,s woint have the billions of peoples money to invest with, do they think people will be saving for years waiting for the next crash, the era of DB CONTRIBUTIONS is over for most,everyones in the market in some form,even those in DB SCHEMES will feel the squeeze when all this unwinds pressure on pension black holes etc |
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just buy shares yourself,the experts tell you to not put all your eggs in one basket and you should diversify so do the opposite,pick a few shares yourselves and keep buying those monthly,you then have total control over when you sell and buy them,shares should come back in time but the worry i have over them coming back quickly this time is that before this crash a lot of social unrest was appearing around the world,hong kong,chile,iran and the yellow vests in france and possibly more and could see it getting worse if it looks like we just revert back to the so called norm
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Seen a few press articles over the past few years about the share platforms letting an unregulated friend or family member login and do your investing for you. Going to be some bad arguments there.
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The Financial Advice industry is a racket. A centre of hindsight, hedging, hypocrisy, aftertiming, sanctimony, condescension and, above all, self-interest.
If you have to use one, to assay the viability of transferring a DB pension for example, you will pretty soon see through their b*****it to the underlying interest that governs pretty much all they do and say: their own. As far as protecting your wealth in turbulent financial times, forget it. That's not their job. Their job is to reconcile you to poor performance. As stated upthread, some people are paying more for an ongoing relationship with their FA than for their car or mortgage. Needlessly. |