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Financial advisor - costs involved?

8 replies

overun · 06/11/2017 21:02

My elderly Father had about £50k in the bank and was on first term names with some people at the bank. One of the staff - Trudy, left her position at the bank and went to work as a financial advisor at a wealth management company. Somehow she persuaded my dad that she could help invest his money. I feel she befriended him to make him a client. I didn’t find out about this until a few years down the line when he was taken ill. My Father told me that Trudy could be trusted as some of her clients were celebrities and he named them. I very much doubt a company like that would have such high profile clients and feel that Trudy used this as a way to gain my Fathers trust. He has always told me everything so I was very concerned to hear about the investments she had arranged and wondered why my Father hadn’t shared this information. The money is in an ISA and a bond. My question is how much has Trudy made out of this arrangement? I’ve no experience of financial advisors, how do they make their money out of things like this?

My gut instinct is to tell my dad to remove the money and put it in our joint account and then go from there so I can keep a close eye on things. I don’t want him taken advantage of. Trudy says that it wouldn’t be a good idea to close the bond as if my Father suddenly needed full time care some of the money would be protected and not means tested so it wouldn’t all go on fees. Not sure about that. I’m suspicious that she doesn’t want to lose my Father as a client as she could be making a lot of money out of it herself. Very worryingly a friend of a friend has told me that one of Trudy’s clients is a well known drug seller! Alarm bells are keeping me awake.

OP posts:
Ta1kinPeece · 06/11/2017 21:07

Is she a licenced IFA ?
Ask to see her registration paperwork
ask to see the fee agreement your dad signed
ask to see the compliance questionnaires he will have done

if none of those exist, call the police.

Do you have details of who the funds are actually invested with?
contact them as well

this does not smell good

Sunseed · 07/11/2017 09:50

May be perfectly legitimate but worth checking her credentials.

He would most likely have been charged an Initial Fee when the investments were first set up (probably deducted from the money invested), and she will probably also be receiving an annual on-going fee of some sort. If the investments were done before 1st January 2013 then it may be a trail fee, if done after that date then if she is getting an on-going fee then she is obliged to be providing him with an agreed level of annual service and he also has to right to cancel that on-going fee. It may be somewhere between 0.5% and 1% per annum of the value of his investment, he should have a copy of the paperwork confirming this, as well as a suitability report confirming her advice and the reasons for her recommendation.

She is right in that there is a quirk in how life assurance bonds are treated if a person does have a financial assessment done by the local authority in connection with paying for care needs. The capital is disregarded, although is he is drawing an income from the bond then that is included in the assessment. However, if the local authority considers that the life assurance bond has been used as a way of a person deliberately depriving themself of assets then they can take the capital value into account.

Do you have Power of Attorney for your father? If not, you might want to start having the discussion.

dontcallmethatyoucunt · 07/11/2017 10:20

It could be fine, but it does smack of desperate for the sums involved. I'd ask for a meeting. Your father should have been offered the chance of a meeting with someone else present at the outset. If not, you have a complaint.

Ellisandra · 07/11/2017 14:31

An ISA and a Bond in his name sound a lot less dodgy that his child wanting the money in their joint account!

Have you looked up Trudy's registration?

Abitofaproblem · 08/11/2017 18:00

Depending on what is in the ISA and what type of bond, Trudy might not be making that much out of it. Does your father knows the current value of his portfolio?

JoJoSM2 · 09/11/2017 14:56

There’s nothing dodgy about someone leaving a job in a bank to work for a wealth management company. The fees will vary but they should/would have been specified at the outset. I’m not sure why you’re concerned about Trudy’s income??? As long as the investments are working well for your father, then that’s the important thing.
With regards to being a proper IFA, she might not be - and nothing you say sounds like she’s made that claim.

Wanting the money in a shared account does sound dodgy, though. It isn’t your money.

JoJoSM2 · 09/11/2017 14:57

Are you an expert investor? Convinced you could make great decisions on your father’s behalf?

Love51 · 15/11/2017 18:32

Trudy shouldn't be naming her celebrity clients!

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