How we get paid
The first meeting is free
All clients are invited to attend our offices in either St Asaph or Cheshire for a demonstration of our planning service and most importantly to ensure that our services are going to be mutually beneficial.
We will discuss our fees in an open and frank manner
Our planning service is charged on the time spent compiling your plan. We also charge fees for the arrangement of investments, tax planning and other services commensurate with the amount being invested or the tax saving made.
Thus we are being paid for all the work undertaken on your behalf. We will discuss our fees with you in an open and frank manner, once we understand your personal situation which could be relatively simple, or highly complex.
If financial products that generate commission from a provider are arranged, we will discuss with you the merits of using some or all of this to offset our fees or having the money reinvested into the recommended investment to reduce charges.
Fees can be better for you
Some people do not like the idea of paying fees for financial advice and prefer their adviser to be paid commission.
This is not to your benefit or your advisers, as a sale of a commission generating product must take place for the adviser to be paid - so the arrangement of financial products or changes to your portfolio may take place for the wrong reasons.
Some advisers could also be influenced by the higher commission rates paid by some companies.
Please believe us when we say that the commission payable comes out of your investment!
Fees v commission - a case study
If commission is not taken, it can be used by the adviser to negotiate better terms for you. To help demonstrate this, we provide below an 'example' of terms for a client who had £300,000 they wished to invest in a low risk bond.
The Adviser Commission route:
Simply recommend a suitable investment product and take the available commission from the product provider, which in this case would amount to £14,250.
The Chartered Financial Planning Fee route:
Complete a full financial plan which in this example costs £1,750. This ensures that your thoughts about the requirement to invest capital in the first place is actually in your best interests. Assuming for the sake of this example we recommend an investment in the same product, an additional fee of £3000 would be charged for the arrangement.
Thus the total fee payable for both the planning and arranging is £4,750. In our example we have assumed that this fee is deducted from the amount of capital available and that only £295,250 is invested, thus keeping the outlay the same. However, all the available commission is rebated back into the investment to provide better terms.
| Amount invested | Final fee charged | Initial commission | Total cost | 5 year return | 10 year return | |||
| 6% | 8% | 6% | 8% | |||||
| Commission | £300,000 | Nil | £14,250 | £300,000 | £372,000 | £408,000 | £467,000 | £564,000 |
| Fee | £295,250 | £4,750 | Nil | £300,000 | £383,000 | £421,000 | £482,000 | £581,000 |
As you can see from this example, you receive a comprehensive lifestyle financial plan, which incidentally may highlight other areas that should be addressed as well as or instead of the investment. Although less capital was available to invest in the product, the rebated commission means investment returns will always be better.
You should note that our fees for arranging investments are the same irrespective of the commission available, which in some cases could be higher than that quoted in this example and in other cases could be nil.
