A quick test of an advisers impartiality is to see if they are registered for VAT. Any professional services firm with a turnover of more than €37,500 has to be VAT registered.
If an adviser is not issuing at least €37,500pa in professional invoices ask yourself the question, how exactly are they being paid? The answer of course is commission.
It's abuses of the commission system, dodgy practices such as non-disclosure of commissions, hiding or failing to highlight fees and charges etc., that cause the problems. And a broker that is prepared to engage in those sort of practices will find ways regardless.
The charge on the Davy Balanced Growth GPS is 1.5% and it underperformed its benchmark by 10.9%, so unless you want to leave money on the table, investing in one of their own brands so you can get "free" financial advice is a bad idea. Either hire a new advisor to take over the ARF in Davy and give you proper advice or look at moving it to another provider, where you may get a better deal.I have an ARF with DavySelect which was being managed for the past four years by my financial advisor. Unfortunately, my financial advisor has now gone out of business and I don't have the necessary skill or knowledge to manage this myself. I contacted DavySelect and they suggested that I transfer to a Davy Balanced Growth GPS managed fund where I would benefit from the services of their financial advisors (somewhat biased advice, I know). I have some questions:
1. If I stayed with DavySelect, would an independent financial advisor usually be prepared to take over from my previous advisor? In addition to their normal annual commission, would they also require an initial percentage at the beginning?
2. Given the current situation with Davy, should I look to another stockbroker completely instead of moving to Davy GPS fund? How safe is my ARF at the moment?
As I said, I'm pretty clueless regarding these matters so any advice would be very much appreciated.
Not necessarily correct Marc. As you know, implementing a financial product for a client is not a VATable charge and neither is advice on ARFs. An advisor could be charging €1m in fees in implementing products for clients but not be VAT registered.If an adviser is not issuing at least €37,500pa in professional invoices ask yourself the question, how exactly are they being paid? The answer of course is commission.
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