Apparently, some financial advisers ‘play cagey’ when it comes to the level of their fees.
This is according to a headline for a story on This is Money, based on research carried out by Which?, the magazine publisher and consumer group.
Which? played mystery shopper with 200 financial advisers and discovered it was hard to find out what they charged unless they were prepared to first sit through an hour long initial meeting.
Fees for advice on investing £60,000 were found to range from £120 to £3,000, with an average fee of £1,579 – or 2.63% of the amount invested.
Why all the caginess about fees?
From reading the article, it sounds like many of the advisers were not prepared to give any indication of their fee levels until the potential client committed to a meeting.
The researchers from Which? were surprised to discover an absence of fee menus on any of the websites for the financial advisers they surveyed.
It’s been over a year since the introduction of new regulations designed to improve remuneration transparency for financial advisers.
Out went the old model of charging commission on investment products, and in came explicit fees for advice.
Despite this, it could take some time before market forces result in cultural changes to adviser remuneration practices.
Our our fee model and approach to charging fees has been in place for many years; we don’t play cagey on fees.
You can find our menu of fees prominently displayed on our website and each client receives a detailed engagement letter describing the specific services they will receive, and fees for these services, before any work is started.
In addition to expressing our fees as a monetary amount, we translate our total advice and implementation fees into a percentage of assets on which we are providing advice, to enable an easy comparison with the cost of other advisers who still work on the percentage of investments charging model.
Of course the cost of advice is only one part of the equation.
What really matters, and is always overlooked in the type of research carried out by the likes of Which?, is the value of that advice.
If you get more value from financial advice than the price you pay, it was a worthwhile exercise.
