# Cost of financial adviser



## moneymakeover (4 Oct 2018)

How do financial advisers typically charge?

Once off or annual recurring?

And what would be typical charge?


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## Jimmy Dee (5 Oct 2018)

In the real world, i.e. most everywhere except Ireland, the typical fee is “bundled”, which covers all aspects of planning and portfolio management. For example in the US, the all-in fee for a $2-3M relationship might be 0.6% pa on your investment amount. This fee will vary according to your capital amount. Due to competition and fee compression, some advisers have started unbundling fees whereby each service has its own fee, and those fees are listed as a separate line item on an invoice. It’s been my experience that most advisers who bundle are resistant to un-bundling because it may expose overcharging in some services. The fee noted above is just for the adviser and excludes platform fees, stamp duty, purchase fees etc. That is my personal opinion. Here in Ireland you can find some advisers here who will tell you their fee levels and they are not too bad. You can also find advisers who will give you separate fees for tranches of work, eg preparation of an investment plan etc. In my opinion avoid like the plague investing with pension providers, life funds (except via employer scheme to avail of tax breaks), local platforms, funds and the like. Its akin to a cartel here, if it looks like one and walks like one and smells like one....................And if you have a substantial sum for investment you will need tax and other advisers all lining up to milk the cow.  Irish investors have few options and once you understand the hurdles you will need counselling. Emigration seems like a realistic option for serious investors.


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## T McGibney (5 Oct 2018)

Jimmy Dee said:


> In my opinion *avoid like the plague investing with pension providers*, life funds (except via employer scheme to avail of tax breaks), local platforms, funds and the like. Its akin to a cartel here, if it looks like one and walks like one and smells like one....................And if you have a substantial sum for investment you will need tax and other advisers all lining up to milk the cow.  Irish investors have few options and once you understand the hurdles you will need counselling. Emigration seems like a realistic option for serious investors.



Utterly crazy "advice" and a recipe for long-term financial misfortune for anyone naive enough to heed it.


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## moneymakeover (5 Oct 2018)

To avoid going off track

Can I repeat the question

Financial advisers, how do they charge?
Per visit?
Hourly?
Annual subscription?
Percentage of pension?


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## RedOnion (5 Oct 2018)

You've a choice when you are choosing an advisor: fee based or commission based.

Typically you are better off paying an upfront fee, but people don't like spending money so end up with commission based relationships, although it might cost them more in the long term.

Typical charge really depends on what it is you are looking for.


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## AlbacoreA (5 Oct 2018)

Do you mean Financial or pension advisor.


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## Jimmy Dee (5 Oct 2018)

T McGibney said:


> Utterly crazy "advice" and a recipe for long-term financial misfortune for anyone naive enough to heed it.



I have no relationship with a pension company or fund. I believe that the cost of investing via a pension company and / or fund in Ireland is out of kilter with most other jurisdictions. If you want to continue giving them large fees and risking your money then go right ahead and take that advice. I also said that if you have a company pension you should avail of it and the tax benefits are great.
BTW I believe that I have provided a guide as to what fee rate you might expect. I don't think that it is far off for Ireland and there are some good advisers. (See above).


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## Steven Barrett (5 Oct 2018)

moneymakeover said:


> To avoid going off track
> 
> Can I repeat the question
> 
> ...



What are you looking for? We offer advice in lots of areas and you will be charge dependent on the amount of work involved. 

Steven 
www.bluewaterfp.ie


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## T McGibney (5 Oct 2018)

Jimmy Dee said:


> I have no relationship with a pension company or fund. I believe that the cost of investing via a pension company and / or fund in Ireland is out of kilter with most other jurisdictions. If you want to continue giving them large fees and risking your money then go right ahead and take that advice. I also said that if you have a company pension you should avail of it and the tax benefits are great.


Believe what you want but as has been said here already, please don't derail the OP's query. Thank you.


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## Jimmy Dee (5 Oct 2018)

moneymakeover said:


> Financial advisers, how do they charge?
> Per visit?
> Hourly?
> Annual subscription?
> Percentage of pension?


I am not a financial adviser. And putting aside snarky responses I would suggest again:
I believe that they like to charge a fee based upon a percentage of your capital per annum, I have suggested above 0.6%, I am sure if you wanted to ask one they would tell you their rate and this will probably vary depending upon the total asset value on a sliding scale. 
I also mentioned above that they will give particular advice either on investment plans or the like and will also charge a one off %. Again ask one.
Should you choose only to get an investment plan then if you need to revisit annually I am sure some will give you a price either as a lump sum for re-balancing or per hour. 
Getting on to the other advice you will need in the Irish environment, tax advice may be necessary, especially if you have complex finances. This advice can be pricey but I am sure you can ask a tax adviser! In addition you will need estate advice and definitely a will.
In the case of a pension you will find the answer here elsewhere under pensions. I won't say anymore to avoid poking the bear!


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## twofor1 (5 Oct 2018)

moneymakeover said:


> How do financial advisers typically charge?
> 
> Once off or annual recurring?
> 
> And what would be typical charge?



Don’t know anything about this guy other than a friend submitted the Fact Find Form in advance then paid the €130 for the 40 minute One to One.

My friend had her prepared list of questions answered and any fees should she wish to avail of their services explained.

She thought it was money well spent.

Might be a starting point for you anyway.

[broken link removed]


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## Jimmy Dee (5 Oct 2018)

This chart gives a useful view on the world of advisers outside of Ireland. This is for the annual asset management charge expressed as a percentage of your invested amount in the US. I don't see why this wouldn't apply here.
If you have 1M + I would be looking for a lower than 1% charge, more like 0.75% reducing.


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## Jimmy Dee (6 Oct 2018)

No harm in helping the OP a little bit more.....seeing as we have started now. In the typical case of the annual fee approach:
Add to the adviser fee(s) i.e. financial adviser, tax adviser and legal adviser, the other costs:
- Dealing costs
- Platform fee (if one is used)
- Stamp duty (where this applies to purchases)
Maybe someone else can check my list. Anyway the actual cost of investing is dependent upon capital sum invested and can be right up to 2% (exclusive of tax, legal etc) in efficient markets. The overall costs reducing as the sum investing increases. The methodology chosen by the adviser and client will vary the component parts of the financial adviser fees.


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## Jim2007 (6 Oct 2018)

Jimmy Dee said:


> In the real world, i.e. most everywhere except Ireland, the typical fee is “bundled”, which covers all aspects of planning and portfolio management.



Based on 25+ years experience of dealing with European mainland financial institutions I'd say definitely not.



Jimmy Dee said:


> It’s been my experience that most advisers who bundle are resistant to un-bundling because it may expose overcharging in some services.



Where exactly is this experience coming from?



Jimmy Dee said:


> I believe that they like to charge a fee based upon a percentage of your capital per annum, I have suggested above 0.6%, I am sure if you wanted to ask one they would tell you their rate and this will probably vary depending upon the total asset value on a sliding scale.



Well you can believe whatever you like, but I can tell you for a fact that of the 900+ institutions I have worked with on performance and attribution measurements, not one of them work on this basis.



Jimmy Dee said:


> This chart gives a useful view on the world of advisers outside of Ireland. This is for the annual asset management charge expressed as a percentage of your invested amount in the US. I don't see why this wouldn't apply here.



Because the way performance and attribution are calculated different for a start as are fees.  You can not pick a rand chart from the US and declare it a world view.



Jimmy Dee said:


> No harm in helping the OP a little bit more....



It is not helpful to make dramatic assumptions and then provide advice base on that.  Start putting some factual review research behind those assumptions.


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## mula (6 Oct 2018)

moneymakeover said:


> To avoid going off track
> 
> Can I repeat the question
> 
> ...



100-250 per hour consultation or a arranged amount for a job of work.
Most fee based advisors have packages for annual advice which might make sense if your siutation is complex.
Fund fees depends on life company used and fund choices but you shouldnt be paying anymore the .75% or less  unless the broker is commission based and building in a trail commission. Avoid this.
Allocation rates should be no less then 100% i.e all of your contributions are invested but should be even higher if youve a decent advisor.

Mula


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## Jimmy Dee (7 Oct 2018)

Jim2007 said:


> Based on 25+ years experience of dealing with European mainland financial institutions I'd say definitely not.


I believe that the OP wanted to know what financial adviser fees were (not particularly on institutions, I would remain of the strong opinion that an institutional adviser is conflicted and their advice should rightly be ignored, that will get your blood pressure up!), I mentioned what I believe is an equitable fee level for an adviser in the middle of a range without any information on capital for investment and which reflects fee levels in the US and also could be applicable here. Just seems like apart from snarky comments no one here other than Mula above wants to give him / her any help other than to defend the status quo. I agree that a fee per hour is also a good idea and I was hoping that someone would start an intelligent conversation about the alternatives to percentage based fees for advisers. TBH I don't think pension / fund provider discussions mixed in is useful too much emotion.


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## Jim2007 (7 Oct 2018)

Jimmy Dee said:


> I believe that the OP wanted to know what financial adviser fees were (not particularly on institutions, I would remain of the strong opinion that an institutional adviser is conflicted and their advice should rightly be ignored, that will get your blood pressure up!), I mentioned what I believe is an equitable fee level for an adviser in the middle of a range without any information on capital for investment and which reflects fee levels in the US and also could be applicable here. Just seems like apart from snarky comments no one here other than Mula above wants to give him / her any help other than to defend the status quo. I agree that a fee per hour is also a good idea and I was hoping that someone would start an intelligent conversation about the alternatives to percentage based fees for advisers. TBH I don't think pension / fund provider discussions mixed in is useful too much emotion.



Your entitled to your opinion, but with out actual experience (my previous questions go unanswered) and research it is not something one should advise others to act on.


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## Jimmy Dee (7 Oct 2018)

Jim2007 said:


> Your entitled to your opinion, but with out actual experience (my previous questions go unanswered) and research it is not something one should advise others to act on.


I don't understand a word of this,  just for clarity I am not advising anyone and I am not tied into any products. Perhaps you could clarify your interests, this would allow the OP to understand any conflicts of interest?


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## mula (8 Oct 2018)

Overall  pay for good advise someone who is paid per hour or job of work to advise and is not motivated by a commission. Good advice is not free.
Advisors dont manage funds they give advice.
Management of funds is with the life company generally.
Generally specialist funds overall dont out perform your standard fund over a longer period unless with out high risk some do really well some are a disaster. Thats the risk part.
Choice is limited in ireland
Keep the annual managment low and stick with a proven fund manager. Avoid new heavily pushed funds with no proven performance avoid flashy marketing.
Most new renamed funds show high returns over the short term but have no track record they are just remarketed funds by a different name and generally with higher charges
And again who knows no fund manger/anyone can predict the future regardless of the projected returns etc. There are no guarantees. No more then predicting the weather.

Mula


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## Steven Barrett (8 Oct 2018)

moneymakeover said:


> How do financial advisers typically charge?
> 
> Once off or annual recurring?
> 
> And what would be typical charge?



Still no clarification on what the OP is looking for. The question is akin to asking what a solicitor charges. For what? Selling a house, writing a will, suing someone? 

If we don't know what the OP is looking for, they can't get an answer. 


Steven
www.bluewaterfp.ie


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## Jimmy Dee (8 Oct 2018)

+1


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## plantrepair (9 Oct 2018)

I'm speaking to a fee based advisor at the moment who says they take 5% of every single premium contribution and regular premium contribution and 1% of my pension fund as an ongoing annual fee. I have not had time to compare to other fee based advisers but does this seem excessive or is it just what I should expect. I will be invested in Irish Life MAPs funds.


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## North Star (9 Oct 2018)

Generally our pricing structure looks like this; subject to a minimum investment amount between pensions and investments combined;

I suggest you call a few firms and have a conversation with them, as there  are plenty of different pricing models out there. Transparency on charges  is vital as is the experience of the adviser and the level of service you will receive. 


Fixed price fee for financial review cash flow  modelling and written report/follow up meeting or call - €750 plus vat
For transactions/pension premiums we offer fee or commission options - but for all pension contributions we would offer a 100% net allocation rate. For investments this may vary depending if full access required or not
On - going advice fee 0.5% of the assets we advise on - no additional charges for one off enquires or ad hoc queries
Clearly make sure you are getting value, but I wouldn't recommend that you select a firm solely on price. You are trusting us with important matters, so  make sure that you are comfortable with the adviser themselves, the service model and the experience and credentials of the advisers. It would only take a couple of calls for you to find a firm where you feel that they are the right firm for you and also importantly that you are the right type of client for them.

Regards Vincent


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## Jimmy Dee (9 Oct 2018)

plantrepair said:


> I'm speaking to a fee based advisor at the moment who says they take 5% of every single premium contribution and regular premium contribution and 1% of my pension fund as an ongoing annual fee. I have not had time to compare to other fee based advisers but does this seem excessive or is it just what I should expect. I will be invested in Irish Life MAPs funds.


I don't think that I have to say anything more, if this is true just work out what you get on every euro you invest after the fees using a range of return levels and see how you feel. And check out all other costs to ensure you get the full picture.


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## plantrepair (9 Oct 2018)

Apologies I should have clarified. I have no intention of using this firm as the fees are crazy. I was trying to get a handle on whether this was typical of the fee based market. Total cost of a MAPS investment for example would have been 5% on the entry, 1% to broker annually plus 0.9% fund mgt charge plus the ongoing underlying charges on a fund I would not rate. Factoring in inflation I reckon I would need a solid 10% return on the fund to break even !!


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## Steven Barrett (9 Oct 2018)

plantrepair said:


> Apologies I should have clarified. I have no intention of using this firm as the fees are crazy. I was trying to get a handle on whether this was typical of the fee based market. Total cost of a MAPS investment for example would have been 5% on the entry, 1% to broker annually plus 0.9% fund mgt charge plus the ongoing underlying charges on a fund I would not rate. Factoring in inflation I reckon I would need a solid 10% return on the fund to break even !!



WOW!!! That's expensive. I occasionally come across charging structures like that when speaking to clients. They tend to be the bigger, older advising firms or else tied agents. They usually give the same reason why challenged on the cost "That's the way it is". 

My fees are on my website on the top banner so they aren't hidden away. Since I put them up there, I've had less messers contacting me and people ring/ meet me with an expectation of what they are going to pay. 


Steven
www.bluewaterfp.ie


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## moneymakeover (13 Oct 2018)

North Star said:


> Generally our pricing structure looks like this; subject to a minimum investment amount between pensions and investments combined;
> 
> I suggest you call a few firms and have a conversation with them, as there  are plenty of different pricing models out there. Transparency on charges  is vital as is the experience of the adviser and the level of service you will receive.
> 
> ...




so let's say I have an existing occupational pension fund value 200k 
Then you would charge annual fee €1000 plus vat ?


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## Gordon Gekko (13 Oct 2018)

plantrepair said:


> I'm speaking to a fee based advisor at the moment who says they take 5% of every single premium contribution and regular premium contribution and 1% of my pension fund as an ongoing annual fee. I have not had time to compare to other fee based advisers but does this seem excessive or is it just what I should expect. I will be invested in Irish Life MAPs funds.



I thought the Narcos lads put Pablo Escobar out of business...

That’s highway robbery, and it’s also not “fee based”; it’s commission based.

I’ve always laughed at the idea of a contribution charge; what in God’s name is the basis for it?!


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## Protocol (13 Oct 2018)

plantrepair said:


> I'm speaking to a fee based advisor at the moment who says they take 5% of every single premium contribution and regular premium contribution and 1% of my pension fund as an ongoing annual fee. I have not had time to compare to other fee based advisers but does this seem excessive or is it just what I should expect. I will be invested in Irish Life MAPs funds.



This is robbery, in my opinion.

You can get 100% allocation, and 1% AMC, and no fee, fairly easily.

But maybe without any advice.

Do your own research, ask questions here, avoid high charges.


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## North Star (15 Oct 2018)

moneymakeover said:


> so let's say I have an existing occupational pension fund value 200k
> Then you would charge annual fee €1000 plus vat ?



We offer the option of on going investment advice and support service, where we are clear on the service offered and the costs involved. If someone doesn't want the service and they are perfectly entitled to make that choice, then obviously there is no charge. There needs to be clarity on the relationship between client and adviser. We want to avoid any misunderstanding and also people not paying for a service and then thinking they can get it for free.


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