I have written an article for a financial services sector publication on the subject of the transparency of charges that apply to certain financial products.
I should tell you I am a big fan of transparency because I think a lot of the historical problems that have led to a break down in trust between consumers and the financial sector has been due to opaqueness.
The “smoke and mirrors” of some products is almost unbelievable not just in terms of charges but also in respect of the degree of risk involved in investing in such products.
Transparency for me is about removing shocks to the system.
“How much am I being charged, I had no idea?” and “The value of my investment plummeted because of counter party failure, what on earth does that mean?” are two expressions that I hope no Informed Choice client will ever utter.
But am I wrong in demanding and providing transparency for and to my clients?
Could it just be that some of them would much prefer not to know how much they are paying for their products and for our services? Could it also be that they simply don’t want to know how their financial product works and what risks they are taking?
Some of my peers believe this to be true.
They suggest that clients prefer commission to paying fees (although to be fair they do always claim to disclose the amount of commission on products) and rather than investing in a fund where the risk is clear they suggest that clients prefer structured products with money back guarantees (even though those guarantees might depend upon the performance of an index or indices over time).
Tell us in your view; is transparency a good thing or would you prefer not to know?