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Comment of the week

Online comment relating to article: FCA sets out RDR disclosure concerns

I have no problem with the concept of paying for advice, and, in my experience, neither does the public. The problem with selling this proposition to the public arises when that advice is to do nothing.

Quite often the comparison between IFAs and accountants/solicitors is used to justify a fee-based proposition. The flaw in this comparison comes when an IFA advises a client to do nothing.

Clients never walk into an accountant’s office or a firm of solicitors, pay a fee and have nothing happen. They visit accountants when they need their tax returns completed and solicitors when they need legal documents created or updated. In both cases there is a clear before-and-after position.

Walking into an IFA’s office and being charged for being told to do nothing would leave most members of the public with a sour taste in their mouths. “What do you mean you’re telling me to do nothing because I can’t afford it and you’re charging me £200 for the pleasure?”

I am not arguing for or against either hourly rates or percentage-based fees, I am just trying to point out what, in my opinion, would be the public’s opinion.

Nick Wardle

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Comments

There is one comment at the moment, we would love to hear your opinion too.

  1. Comment of the week – absurd comment of the week. Advice not to do something and save money is worth paying for and like all advice, it has to be sold at outset. How often have clients said I want to consolidate my pensions? The problem is that even saying do nothing costs a lot of money these days. You have to cover yourself. The analogy with other professionals is bizarre – if they do not deliver what they say they will you do not pay. If we deliver advice to do nothing we are delivering what is asked of us.
    We still seem wedded to the idea of commission – no product no sale…..

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