Adviser Fees

Question 1

Benefits of paying for adviser fees on an hourly basis

Answer 1

• familiar or same as other professions
• easy to understand and compare
• based on actual work undertaken, the amount invested is irrelevant - cheaper for larger sums
• fee cap can apply

Question 2

Drawbacks of paying adviser fees on an hourly basis

Answer 2

• can be seen as inefficient, or adviser “running up the clock”
• may put clients off making contact or asking for advice
• paid from personal funds
• unknown total cost

Question 3

Benefits of paying adviser fees as a fund based fee

Answer 3

• can negotiate lower fees for larger investments
• payment via provider if not from personal funds
• incentive to grow funds
• attractive for lower amounts/lower fees for lower amounts

Question 4

Drawbacks of paying adviser fees as a fund based fee

Answer 4

• difficult to predict each year
• may not be in line with the service provided, not reflecting time spent or larger portfolios not generally harder to administer
• extra charges may apply for other services
• reduces potential investment growth

Question 5

Benefits of paying adviser fees on a fixed basis

Answer 5

• familiar or same as other professions
• known cost
• easy to understand and compare
• amount invested is irrelevant - cheaper for larger sums

Question 6

Drawbacks of paying adviser fees on a fixed basis

Answer 6

• is fee justifiable?
• paid from personal funds
• may put clients off making contact or asking for advice
• exactly what is included?