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‘Commission is better value for consumers’

Clients seeking investment advice get better value from a commission-based model than they would if they paid a fee to the adviser, according to Edward Jones.

The US-owned financial adviser and stockbroker says if a portfolio is put together correctly, the client should not need to change the allocation on review.

Research department market strategist Kate Warne says with the controversy over churning, there can be doubt on whether an adviser charging a fee is just looking to make switches that might not be necessary in order to justify the fee.

She says: “If you get the portfolio right in the first place, you will not need to make any changes when the client’s investments come up for review, which we will do for free.”

Warne believes that investors need to take a long-term view rather than be drawn into asset classes that have already seen good returns.

She says UK investors tend to be overweight in energy and materials and says taking a contrarian view to prevailing trends can often be important in long-term investing. She cautions against charging into property and natural resources, which have been on a strong run, urging diversification.

Warne says: “For every sector that you are excited about, there should be the same amount that you are disappointed with.”

The firm has 200 investment representatives on a whole of market basis without a fee option and is looking to expand staff numbers to 300 in the next 12 months.


‘Borrowers should pay for increased proc fees’

Mortgageforce managing director Rob Clifford believes that brokers are being underpaid on prime cases and he wants higher charges for borrowers to pay for increased proc fees.Clifford told the Mortgage Business Expo in London last week that borrowers are getting a “free lunch” as brokers earn far less than counterparts in other markets.He said intermediaries […]

Aviva considers reattribution of inherited estate

Aviva is continuing to pursue the possibility of a reattribution of the inherited estate of two of its with-profits funds and has appointed Clare Spottiswoode as policyholder advocate.Spottiswoode will represent policyholders and the role was created under new FSA rules governing reattribution but at this stage no decision has been made to proceed with a […]

Commission contention

The growth in Sipp business means now is the time for a remuneration overhaul

Public should pay levy

The Financial Services Compensation Scheme has announced that compensation for customers of Berry, Birch & Noble has been capped at 48,000 and that they are one of 80 firms declared in default in the FSCS’s latest declaration, Customers (they mean clients) of each firm will be eligible for up to 48,000 compensation, FSCS chief executive […]

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Guide: Johnson Fleming produces auto-enrolment checklist

For a job as big as managing the auto-enrolment changes, it’s important to know what has been completed and what still lies in front of you to give you the reassurance that everything is in hand. Getting the planning and project management right at the outset can help you see the path ahead and ensure everyone knows their roles and responsibilities. To help with this, Johnson Fleming has produced a checklist outlining every step that needs to be taken when preparing for auto-enrolment.


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