View more on these topics

Better business: Transactional vs ongoing charges

Research from JP Morgan shows that although the demand for transactional services fall  and demand for ongoing service increases as a client’s net worth increases, overall, there is far more demand for transactional services.

Respondents state that they prefer to pay for advice by task instead of ongoing charges. Even above £500,000, there is a desire to “pay as you go”. So, why are most firms operating with ongoing charges between 0.5 and 1 per cent?

There are two reasons: inertia, which is negative, and delivery of good service, which is positive. There is a view that ongoing charges may become unsustainable as clients think about their cumulative effect and whether they are good value for money. This will take time but this trend and the research suggest that competitive pressure upon advice charges will rise.

To resist the price challenge, answer the following:

  • Is your proposition clear, concise, published and under-stood and promoted by all your advisers?
  • Do you have effective promotional material to explain your proposition?
  • Can you sum up what you offer to clients in a few words?
  • Do you have to discount regularly to acquire new business?
  • Do clients have some choice about the amount of service they buy from you or do you run with a set menu?

David Shelton is the author of “The Business of Advice” book and website


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm