The Snug Rhino

yes....but only a very few

The Snug Rhino

sort of, i was tied to and working for a life assurance comp at the time so i was paid 5%. In addition the firm took an extra 2% so it was more like 7%.

was he a moron? good question! He trusted his adviser who was trained very well to obtain that trust. It was a perfectly legit sale and he was happy with it.....and still is.


to be fair, 4% on £3m is a LOT MORE money and from an IFA with much more control over commsion give up is not a wise move (IMO)

Luan Pra bang

I agree but some people pay these kind of sums for big investments and I don't understand why. A close friend left a comapny becuase his boss liked to charge these amounts on 1 million plus investments , wait a few years then try to get them to invest in new funds etc and blag that it would be a good idea when really he was chasing more commision.
What I really don't understand is who all the people are who have made this much money and still don't know how to look after it properly. I do know a few millionaires an most of them are very astute when it comes to looking after and investing cash. They may have accountants who set up off shore trusts and manage company pensions etc to avoid tax and brokers who invest for them but most don't seem to need an FA.

The Snug Rhino

The bulk of the problem is that good advisers are GOOD sales people, prob the best in fact. Good sales skills and a complex commision structure is enough to blur the common sense of most people, no matter how wealthy.

I was chatting to mate this afternoon who now works for a TIED firm that most people will have heard of in the HNW market. These guys arent even IFA's yet are getting people investing MILLIONS to advsiers making £300k PA +++

My frustration is that the industry has a LOT of money to dish out in commision and i would love to think that by splitting it more "appropriately" with clients i would get more clients to compensate for the loss...........but at the back of my mind is the belife that i wouldnt and the other buggers would carry on making silly money while i ran a charity!

EddScott

TBH, I couldn't give a monkeys what other IFAs are earning. As long as I know I've done the best job for the client and if there is a reasonable amount of commission available than we do the best deal for smiles all round.

What I find most amazing is that many city IFAs strike me as being far too slick for thier own good and yet make a fortune. I guess its because I'm in the industry but some of these guys who are earning serious money couldn't sell me water if I were in the desert.

We had one guy who tried to use a £1m investment as a sweetner to us to take him on. Granted it was a fair whack of commission but he was just so bloody oily, he just didn't fit the company ethos.

We are working more and more towards being paid for advice not for the product sold. This is how IFAs will lose their salesman image.

I will soon be advising myself albiet on low-key stuff and mortgages to get started. Fortunately I've negotiated with the boss (my mother ) that I can remain on salary whilst I continue in my Practice Manager role and earn a percentage of commission on top. My earnings cover my outgoings with a reasonable amount left over so I'm not under pressure to sell and can concentrate on giving good advice.

The Snug Rhino

"What I find most amazing is that many city IFAs strike me as being far too slick for thier own good and yet make a fortune."

and thats what makes me wonder if the current business model can ever be challenged. when these guys are making 300,400,500k pa with sales patter that would make Allied Dunbar squirm what hope is there!

EddScott

These guys can continue making their money and earning off the back of very wealthy people that should no better. What would you do with them all if you stopped it? "The Apprentice" would never be off the bloody TV!!

Its probably never going to set the world alight but to run an honest firm that looks after people and develops an excellent local reputation should see you in good sted for the future and reward you with a reasonable and healthy income.

paulr

Having read the whole thread and thought about it maybe its not such a bad idea, now its been explained a bit.

I think a lot would depend on on what investements you have taken out.Say for example i had a large mortgage,a pension where i put a large monthly amount in and some savings and one person looked after it all.I'd be prepared to pay a one off fee for setting up the mortgage,a one of fee for setting up the pension and a one off fee for setting up some savings plans.Then i'd be prepared to pay an annual fee for them to "keep an eye" on the pension and mortgage in case the financial background changed and a "better deal" came along.The annual fee would have to be pretty small though because imo "keeping an eye" on my mortgage and pension wouldn't involve much i dont think.
As for savings/investments personally i'm pretty cynical about the stock market anyway and to me its only one step away from Las Vegas. My preffered route would be unit trusts and paying in a monthly amout. I'd expect my advisor to check them every so often in case they suddenly started falling.

In conclusion,i could go for the one off setup fee and small annual fee route. Personally i'm not really into managed portfolio's so i may not be your ideal client. The challenge you'd have is convincing people they aren't paying a meduim/large annual fee just for you to move their money about for the sake of it to "justify " the fee. (if you know what i mean)

Good luck.