My letter (FA 29 January) regarding the charges advisers impose drew a lot of responses disagreeing with me.
I do not have a problem with that, but some of your respondents have missed the point. In 300 words it is hard to outline all of the facts, but my pension is managed by a discretionary fund manager set up by the previous IFA, and I am happy with its performance and service. What then does the IFA do for his ongoing 0.5 per cent per annum?
Gary Lee argues that although I said I was “happy” to pay a fee, he suggested my expectations were that the fee would be small. Wrong – I would be happy to pay £1,500 for a full pension review if that were to become necessary, or for drawdown advice when I reach that stage. However, I am not happy to pay £2,500 or more each year until that time arrives.
Jamie Smith-Thomson argues that it was wrong of me to suggest that all fund-based fees were unfair. That is not at all what I was saying. I was asking why the fund-based percentage was the default position for most IFAs, and that most would not consider any other approach. Is it because 0.5 per cent was the default position before the retail development review?
Nick Bamford suggests that his firm could help me, “but will certainly charge more than 0.5 per cent”.
So come on, Nick and others. Tell us all what you would do to justify more than 0.5 per cent in my situation, above? And tell us all why 0.5 per cent is a fair rate on a fund of £100,000 and also fair – and worth five times as much to the IFA – on a fund of £500,000?
Brian King
Director,
Whittard King,
Cheltenham
