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.