Regarding Julian Stevens’ views on remuneration (July 5), how long before the industry realises that remuneration cannot be just a matter of either fees or commission?
My firm still deals with predominantly ordinary people. If a client comes to me for advice on a legacy product, they will receive the best advice I can give them
Julian is miles away when he says the IFA’s only angle is to sell the client a new product to generate commission. My advice is not tainted by the aim of selling something new. It is very much roundabouts and swings – sometimes I earn, sometimes I do not.
There must be hundreds of small IFAs just like me happy to advise without the need to sell anything on every occasion. Why do we thrive? Very easily. Week in, week out the phone rings with the “you don’t know me but you helped my brother, sister, aunt, uncle, friend”. Sometimes, the resulting client puts literally four figures in the bank but often we can spend hours helping out a family who have got themselves into a financial jam as a result of certain banks pushing loans and payment protection insurance.
These type of people will never be able to pay a fee. Fees cannot be forced onto the industry. Sometimes they are appropriate and sometimes they are not. I know IFAs whose business runs very successfully charging high-net-worth clients fees. Likewise, our business succeeds because we are ready to help without charge and ready also to benefit from commission when the sale and advice has been appropriate.
So stop trying to use the one size fits all mentality. There will always be a need for commission and it is also appropriate to charge fees on other occasions.
Barry Johnson Financial Services