Case Study – How charges affect your investments

At a recent meeting where I gave a presentation on how charges and commissions affect your pension investment returns, a member asked me to visit him and his wife at their home.

They informed me that they wanted me to look at their present investment portfolio and to look at what charges they were paying because they did not know themselves.

They informed me that they already had an IFA, but had not seen him for a number of years and the company had rarely been in contact.

I wrote away for all the information regarding his investments and pensions, looking at all the charges that were coming out of his plans.

The investment and pensions companies informed me they were taking 1% per annum management charge along with a 0.5% per annum which they paid to the IFA whom they had not see for a number of years, remember.

As both their investments and pension pots were of substantial amounts, the clients were shocked at how much the IFA was getting for doing nothing.

As our company works on a “fee” based remuneration, I informed the client that we could reduce the 0.5% which the existing IFA was getting, and rebate this back into his investments going forward.

We calculated that up to his retirement age on both his investments and pension we will save him approximately £56,000. This will make a huge difference to his investment and pension returns in retirement.