View more on these topics

Doctor’s orders

Week in week out, I meet IFAs and tied financial advisers who tell me the public simply will not pay fees for financial advice, preferring the use of commission for this advice.

I have found this very confusing for quite some time because every member of the public I meet tells me they mistrust IFAs and feel all they are doing is trying to sell a product to earn a commission – bit of a paradox that one.

When I read another article saying the public will not pay a fee to an IFA simply for them to select a product, it dawned on me that most IFAs and FAs are product peddlers, not financial planners.

The public will pay fees for financial planning. Why? Because this is when they appreciate what we do. This is when, as a financial planner, you show the client where they have financial shortfalls in their current arrangements and how they can resolve these.

When I explain to a client the reason I prefer a fee to commission is because I am being paid for financial planning rather than arranging a product, they completely understand. In fact, in many examples, such as pension transfers, the answer to their finan- cial planning could be to do nothing.

Imagine your GP being paid by the pharmaceutical companies to prescribe you with drugs – the more drugs the GP prescribes, the more money he earns. This is, in effect, how the system works for the bulk of the UK’s financial advisory community. If we drew a parallel between the pharmaceutical and insurance companies, I am sure we would know where their vested interests lie.

So the next time a member of the public is in front of you, try thinking like a financial planner (GP) not a financial adviser (IFA).

Tony Slimmings

Chartered financial planner

Tony Slimmings Ltd

Recommended

Feathering the nest

I have two young children and want to invest some money for them to help with university fees and a house deposit in the future. What are my options?

5

Property – safe as houses?

Industry experts are divided over whether the battered property sector is beginning to stabilise and could offer an attractive income story for investors in the low interest rate environment.

Europe: banking on a recovery

Neptune video: Europe — banking on a recovery

Arguing that the eurozone crisis is over, watch Rob Burnett, head of European equities at Neptune, discuss the sectors that he’s investing in to harness the recovery. 

In the video, Burnett addresses the following: 

• The primary drivers of the eurozone’s economic recovery
• The turnaround in individual countries’ current accounts
• Sectors best positioned to harness the recovery, without offering undue exposure to risk

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment