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Fees, fees and fees

17 July 2006 Readers respond

* Admin fees

How do the assurance companies pay for the cleaning of their offices, maintenance of plants, buildings, etc., etc, on Commission statements or on receiving invoices from suppliers or service providers? I can not see why brokers can not be paid an admin fee by sending an invoice to the companies for doing work that has always been performed by the life offices themselves.

I recommended this to Myles Ruck of Liberty about 2 years ago but he could ( or Would?) not understand.


* Fee vs Commission

Thanks for a great page, please can you advise me as to which way I can go.

I'm in the process of trying to get my clients onto a monthly debit order fee of R75.00, this is for the benefit of them having their file in my office, something like an ADMIN FEE, as do the short term brokers.

Would it be possible for you to try and get a feeling out there amongst the rest of your readers how they would feel about doing this together. We have to ALL do it otherwise it may not work, let's look after ourselves for a change.


* WHY DO YOU PAY ADVICE FEES?

At the moment there is much debate and negative publicity about advice fees charged by financial advisors. We believe that such blanket criticism is unjustified as there is no real understanding of how financial advisory companies manage to stay in business to provide a valuable and essential service to the investing public.

At our company we do our clients the service of seeking out those investment companies who charge no initial cost or possibly a very low initial fee. In this way, our clients receive appropriate advice at the most reasonable costs in the industry resulting in a substantial saving.

Clients must appreciate that there is always a cost for advice and the ongoing service related to the advice. At Silke Financial Services, we charge an initial fee for advice given plus an annual fee in order to service our clients and to be able to comply with legislation.

Initial Advice Fees: these are professional fees related to the endeavours related to investment research, knowledge, experience and qualifications of the advisor and include the handling of all the administration relative to the placing of that investment by our staff.

Annual ongoing fees: these fees reimburse the advisor for ongoing advice, consultations and administration by our staff during the course of the investment inclusive of any extraneous ongoing advice relating to tax and capital gains tax, drafting of Wills as well as some legal advice.

The advice fees also partly cover overheads such as fees paid to the Financial Services Board, compliance costs, stationary, phone bills, tax, staff and rent.

The universal purpose of running a business is to make a profit, otherwise a business might as well close it doors.

Quick Polls

QUESTION

We have watched with interest as each of the country’s large life insurers report their 2021 life claims statistics, with soaring claims and claims values. That got us thinking: how do the big life insurers compare against one another, from an IFA perspective?

ANSWER

An insurer is an insurer is an insurer
All are excellent: would not deal with them otherwise
There is one insurance brand that stands out for me
Tied agent: but my brand is the best out there
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