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Child care at a price

Nic Cicutti writes an interesting article on child trust funds. I can help him out on his query as to why IFA advice seems low on these products.

I have advised clients on CTF options and, with most, a cash account suited their needs. This advice was provided as part of a holistic financial plan.

Imagine, though, a new client wanting advice on a transactional basis, with no further advice and no advice on any other product areas.

The fee after issuing the regulatory paperwork comes to 75, with another 75 at least for the fact-find, suitability letter and other regulatory requirements.

So, that is 150 for advice out of their 250.

Several years ago, I might have seen the client and given them advice for no charge on the basis they might use me for advice in the future. I could do this because the commission paid on a big investment was more than the time spent. However, now I take commission or a fee proportionate to the work undertaken.

So, the large-case investor gets better value for money and the small-case investor gets charged for the time taken. Isn’t that what the regulator wants from IFAs?

Steve Eastham,
Director,
SJ Eastham Financial Services

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