Three top advisers have argued firms should charge more for planning as clients are becoming more willing to pay for these services.
At the Personal Finance Society’s National Symposium in London last week, Thornton Chartered Financial Planners, Killik & Co and Informed Choice noted a trend that clients are accepting higher charges for advice, provided the value of the plan is made clear.
Thornton Chartered Financial Planners charges a minimum of £1,500 for plans but holds first meetings for free.
Managing director Sharon Sutton said: “Most clients thought we didn’t charge them enough for the financial plan.
“It’s very much driven by what the value of the financial plan is. The plan is what clients value in terms of advisers finding out more about them, their story and helping them understand better what they want to achieve.”
Killik & Co wealth planning partner Sarah Lord said her firm was continuing to transition away from its traditional investment management fees as a result of the value clients place on the financial plan.
She said: “We have grown financial planning within a historically stockbroking and investment management business. We are charging fixed fees for the plan based on hourly rates and complexity.
“When you try and pull those two together to demonstrate the value to the client it can be a challenging conversation, because what is the client actually placing the value on? Is it the investment management or the financial plan they are getting at the outset? What we are seeing is a gradual shift in client mindset that actually they want the plan to be more important.”
Informed Choice charges for advice based on an upfront fee that includes planning charges.
Executive director Nick Bamford said: “In terms of pricing, some situations are much more complex but we have wrapped in the implementation together with the advice and planning part of it.”
He added higher charges are justified in light of the value advisers add.
He said: “The industry is getting challenged on some of its pricing, but people don’t understand what we have to do. The job we do is so valuable we need to be charging profitable levels.”