During my 30 years as a financial planner, the High Street Banks had many a foray into financial planning only to withdraw and try again.
This latest Lloyds Bank/Schroders venture doesn’t look to be any better. They claim to be able to undercut the fees charged by St. James Place but still come up with some eye-watering costs.
A fee of £750 for a financial plan even if you don’t take their advice. An advice fee of 0.65% if you decide to go ahead (that’s £3250 on a pension fund of £500,000) and then ongoing annual charges of around 1.7%, (that’s £8750 per annum on the same £500,000).
With dividends traditionally having been around 4% and expected to be devastated by the Coronavirus scare that is a huge hit on likely returns.
So why do they think this will work? Simple. The huge Lloyds Bank customer base available to their advisers. Even after all the bank problems over the past few years far too many people still believe that anyone introduced by their bank must be ok.
Having said all that many Financial Adviser fees will be in a similar ballpark which is one reason why only 9% of us use a financial planner.
I and my clients use the on-line no advice platforms such as Hargreaves Lansdown and A J Bell. Excellent, user-friendly, customer service, many useful guides, calculators, etc. and much more competitive costs. Not only that but you will keep total control of your money – no faceless discretionary managers who will move your money and tell you later.
If you would like to investigate whether one of those platforms would work for you just use this link to book a free 30-minute Zoom chat.
As always I must point out that I am not a regulated financial adviser and anything I say should be treated as general guidance and not personal advice.
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