Hi Steven,
My advisor didn't mention what his commission would be or that it would be coming out of my fund. I'm a bit cross with myself for not pinning him down on that at the time, as I do know better! In all my previous investments with him, his commision has been paid by the product providers, I guess that blinded me a bit.
Friends First list his initial and trailing commision rates, I caculate them as 3.5% and 0.5%.
I read this report on ARF charges last night, from the Pensions Council to the Táiniste in February 2016.
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An interesting read. It would seem the Council believe it is extremely difficult, if not impossible, for intermediaries to make meaningful comparisons of products, in terms of fees and charges, to offer the best value in the clients interest;due to the complex and diverse ways providers charge them.
Then again, how would an intermediary be incentivised to offer a client a product with lower commission for him/her?
Looking at the figures in the report, it seems to me that the Concept K Fund is on the upper end of the scale of Reduction On Yield. I gather from the report that the average level of fees, on the funds surveyed, would reduce the growth by 40%
using the formula in the report, I calculate my total Reduction on Yield to be 3.5% if redeemed at 5 years, 3.15% at 10 years and 3.03% at 15 years.
That's interesting what you say about all possible charges having to be included in the quote, maybe it will not be as bad as it seems. Also, hopefully my adviser is worth his commission and has accordingly picked a fund that will perform in such a manner that the charges will become, almost, insignificant.