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Adviser websites criticised for not showing charges


Only four of the 60 largest advice firms in the country give any indication of their charges on their websites, according to an analysis from a financial planner.

Candid Financial Advice director Justin Modray says that after reviewing the 60 websites, only Brewin Dolphin and Hargreaves Lansdown were found to publish explicit advice charges.

Vestra and Fairstone gave a general idea of likely charges, Modray found.

Modray says this is evidence that finance advice is “still rooted in a highly-paid sales mentality”.

He says: “The FCA heavily criticised the fund management industry over charges last November. Our opinion is that financial advice is far worse and still rooted in a highly-paid sales mentality.

“When the FCA banned sales commissions at the end of 2012 this offered hope for a fresh start. But old habits die hard and anecdotal evidence suggests many firms have used it as a welcome smoke screen to significantly increase their annual advice fees, typically from 0.50 per cent to 1 per cent.

“I say anecdotal because it is hard to prove when firms keep their fees such a closely guarded secret. It is still almost impossible for people to easily shop around and get an idea of what a financial adviser is going to charge them.

“Since advice fees can often run into many thousands of pounds, perhaps it’s no surprise that advisers with high charges like to keep quiet until potential customers are within a controlled face to face sales process.”

Modray called for the FCA to force advisers to list fees on their websites to stop the advice profession “from charging as much as it feels it can get away with, rather than what’s fair”.

The Yardstick Agency director Phil Bray says that publishing fees on adviser websites would have to be matched with what services were received to enable clients to make a meaningful comparison across firms.

Bray says: “There’s no doubt that increased fee transparency would be a positive step, as would making it easier for the consumer to compare adviser charges. I’m still undecided though whether displaying fees and charges online is the right solution.”

“Those advisers who display charges demonstrate a greater degree of openness, and transparency, and that they are prepared to go above and beyond what is required by the regulator. However, to be truly useful to the consumer, fee disclosure has to be accompanied by an explanation of the services available. Only once the charges and services are clearly laid out, can the consumer make a fully informed decision about the value they will receive from engaging with the adviser.”

“I’d also be concerned that consumers would naturally be attracted to the adviser displaying the lowest charges, ignoring other, perhaps more important, factors and giving a disproportionate weighting to costs, over other potentially more important factors such as value for money, knowledge and experience, adviser compatibility, when making their choice.”

“Should the regulator compel firm to display their charges online? I’m still on the fence. But if they do, they have to be prescriptive and provide a standardised format. If they don’t, we are bound to see, at least from a minority, an online battle to dress up reality as something more attractive. We’ve already seen this with the disclosure of regulatory status, which I firmly believe should be mandatorily disclosed online.”


Money Marketing is currently publishing a series of articles on adviser charging, and has set up a survey of the wider advice population to see how you are using their websites.

Find the first article in the series here, and complete the survey here.



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There are 9 comments at the moment, we would love to hear your opinion too.

  1. Justin. If I was looking at your website I don’t think that I would really know what I would be paying for your services without asking you directly. The cost banding’s that you show are confusing and I think should be accompanied by a calculator.

    If you are going to offer a tiered structure you need to explain how the tiering works and how a client could be effected if his/her values change during the course of a year.

    I’ve personally made an attempt to add charges to my website but it is very difficult because we charge fixed initial fee’s which invariably are different depending upon circumstances. If someone wants a pricing, I need to know what they want first. Our job is so diverse that I don’t think we will ever get to the point whereby we can be compared online.

  2. I always have, and point new clients there so that they can see an indication of likely fees before we meet and so not to waste each other’s time. It seems to work well. Transparency, Transparency, Transparency.

  3. Unless advisers are working on a time costed fee, until they gain a full understanding of what a client is actually seeking they will be hard pressed to be able to give a cost of advice with any assurance unless they are on ‘fixed fees’ – in which case there will potentially be cross subsidy between clients.

    Our fees are tiered however they are outlined as ‘maximums’ given that the cost also reflects the complicated nature (or otherwise) of the work. Once once we meet with a client do we agree a client specific fee based on the advice they are seeking.

    On a time cost basis, the client won’t know the cost until the work is complete.

    There will always be winners and losers depending on the approach to charging and the work involved however surely the main thing is that they get value for money and they understand what type of advice they have received and the total cost of that advice?

  4. If we take a look at some of the other professions, like a solicitor, or an accountant, most of them do not display fees on their website. Why? Because consumers are not buying a product, and the fee they pay very much depend on the type of advice sought, as well as other factors. We provide an indicative figure but it’s not possible to quote to the pound and pence before you even had a real chat. It’s good to be transparent, but there’s a time and place for this. Placing too much emphasis on adviser charges before the clients even know what they are getting, will run the risk of scaring away would-be clients. As in other walks of life, charges are one of many key considerations to make.

  5. So what?????? Who cares????? Total non-story IMHO. Unless one has a crystal ball (or charge by the hour) one cannot tell anyone what it will cost them until you find out what they want you to do for them. This is possibly why some advisers still conduct the initial meet at their own cost. Only after the facts are established can you tell a prospective customer what the bill will be of the work. If we published “guideline” prices and then once we find out what is involved and end up charging an appropriately highly fee (for whatever legitimate reason) guess what the press headlines would read?????? “Dodgy advisers quote sucker fee prices to get punters in the door”. Maybe Mr Modray should just concentrate on what his firm does and not worry about anybody else

  6. The Clients aren’t stupid, they know the value of their ‘pots’ and can work it out from indicative percentages. Until we all take this on board, we will never regain the trust of the investor public

  7. Comparing HL and an IFA is comparing Apples & Motorbikes the % / fee displayed is if they SELL you a product.
    I asked for a cost to meet an adviser and provide a report on the options from my pensions and investments to make an informed decision and I may keep my existing plans. They told me the cost if I transfer i.e they sell me something. If I want a report on my existing plans (which to me is advice) they directed me to find an IFA via the money advice website. HL are very good at what they do which is selling products to gather AUM. From your website Mr Modray it looks like you are the same its all about we get paid when we sell you something and whilst these % fees are very clear, looking at your website and your client agreement there is absolutely no guidance on what you would charge for a report on say my pensions and the advantages and drawbacks of my plans. No indication what will you charge for calculating how much I can pay into pensions. No indication of costs / fees for estate planning. There is no indication of costs for wider financial planning. Perhaps Mr Modray can put these costs on his website and all the other advise services his firm provide. It seems to me to be all about what the costs are if Candid FA sell something. Is this a conflict of interest one wonders. I also not that Mr Modray does not put his cost in writing to a client before proceeding but it is based on a verbal handshake (see his website) which sounds like the old days of commission. Common Mr Modray lets see you being professional and issuing a personal Letter of Engagement before the clients engages you to provide your services.

  8. AAARgh. Yet another 1% is too much to charge article. Have today had client ask about her fees. Her mother’s adviser only charges 0.5% per annum. Does he visit each year? No, he’s based in Surrey where mother used to live before she moved to Cornwall to be near daughter. What has mother got? Possibly discounted gift trust with Prudential in Pru fund – hard to tell as daughter who has PoA isn’t clear on what was advised. Plus a deferred impaired life annuity. Ongoing advice requirement? Pretty much nil. Only other asset holiday home managed by daughter. Is 0.5% ongoing justifiable in this instance? Is it fair value to the client? Me? I’m advising my client on her drawdown, retirement income needs, inheritance tax planning, will and need for LPA, premium bonds as opposed to savings account with bank, dog tracking app for her prized pooch, how to overcome her wifi issues in her house, general taxation and impact of income received from mother’s holiday let. How often do I see client? Minimum once a year depending on demand. Distance to travel? 180 miles there and back. And that’s on top of telephone calls, emails, newsletters etc. So WHO provides value for money? And no we don’t display fees on our website as we negotiate appropriate fees with each new client.

  9. People still barking up this tired old tree? Read all about it here

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