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Comment of the week: Let’s be clear on charges

Online comment related to last week’s column by Neil Liversidge: Would anyone use ‘hard fees’ if they didn’t have to?

Very interesting article from Neil and I agree with the sentiment 100 per cent.

We have always been clear on what we charge and why…. as such, RDR didn’t have a big impact (other than the hassle thrown up by providers implementing the legislation). 

We offer clients hourly rates or fixed fees and the majority prefer to work to a fixed fee given that there is certainty in the amount. 

In cases where there is an expectation there will be a financial transaction at the end of the advice, we offer clients the option to pay us directly or (unless tax is prohibitive) have it deducted from the investment amount.

Again, the majority ask for us to take it from the investment. 

We don’t push them down any single route but the majority prefer to proceed on essentially the same basis as was the case ‘pre-RDR’ – i.e. an agreed advice charge deducted at outset. 

Given that this is ‘de-allocated’ and therefore clients clearly see the amount invested being reduced by our advice charge, I fail to see how banning this approach is in the client’s best interest. 

Change needs time to bed in – and given the ban on rebates and, subsequently, legacy trail, there is plenty to be dealing with as a result of legislation…. going back and changing what RDR introduced is probably unnecessary.

I do, however, think that a close look should be given to life cover commissions given the impact they have on premiums and the lack of transparency as to the proportion of the monthly premium is being paid as a result of advice.

Paul Stocks





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