Hi there, can anyone recommend a discount IFA with no / minimal charges. I
know 'zero charges' sounds unrealistic, but I'm sure I read about a company
in the FT about a month ago that did not charge at all.
The charging structure was:
- all initial charges refunded.
- all annual charges refunded every year.
Their profits were made by the interest they make on refunds whilst they are
held on deposit. Thanks for any help - I know exactly which funds I want - I
just don't want to loose the initial 5 %.
who offer a
wide choice of funds with initial charges usually around 0.5% (sometimes
nil) and 'loyalty' bonuses which help reduce ongoing charges. A number of
fund supermarkets (FundsDirect, Ample) offer a similar range but their
charges are often 1%-2%, Hargreaves Lansdown are the cheapest I've found.
The A in IFA stands for Advisor. If you want advice you should be prepared to
pay for it! However, if you just want execution with no advice there are
plenty of brokers who will discount most of the commission, e.g. Hargreaves
Lansdown rebate all the initial commission and about half the annual
commission. You will not find anyone who doesn't charge *at all*, they aren't
You definitely won't get all the annual charge refunded. A unit trust
typically has a 1.5% charge plus various other things which may add another
0.5%. Out of that they usually pay 0.5% in annual commission. What you may get
is part of that commission refunded. You might also like to consider
investment trusts, which don't pay commission at all and often have much lower
charges in total, maybe 0.5% or so.
Even if you have, say, £20k, at 0.5% the annual commission would only be £100
a year, and the interest on that would be a few pounds even if they didn't pay
it out for a year, hardly enough to make a profit! If you really have a *lot*
to invest, say a million pounds, you can probably do an ad-hoc deal to get all
the commission back and pay a fixed fee, but for "small" amounts it just isn't
worth it, realistically it probably costs a few tens of pounds a year just to
cover admin costs, and just adding the extra admin to cover refunding the
small amounts of annual commission itself adds to costs. OTOH getting the
initial fee refunded is easy, lots of brokers will do that.
I use Moneyworld IFA, most initial charges reduced to 0 .25%, no idea about
Actual funds held by Fidelity Fundsnetwork but you need to go in thro MIFA to
get the discouts, pay onlinewith switch to open the isa / buy UTs / OIECs