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Editor’s comment of the week: The value of nothing

The expression involving the cost of everything and the value of nothing comes to mind. One of the immeasurable detriments to consumers of the RDR is that many customers will be driven to those that offer the cheapest price and not necessarily the best advice.

We have often found that prospective clients have baulked at the estimates we have given, unable to understand the cost to us of delivery and the value of what they are getting. Although what we quote (and charge) is much less than the traditional 3 per cent plus trail that many consumers would have been paying in the past, it is still difficult to convince new clients.

We know of several instances where clients have gone elsewhere believing either their new advice was free or better value and they were frankly “conned”.

While we make provision in the cost for our advice for any possible comeback on the advice we give, capital adequacy and reserves, for example, how many of those IFAs that undercut us are making adequate provision for their advice?

The cheaper quotes are often those from advisers that disappear and then dump their liabilities on the more responsible and prudent IFAs remaining. In my opinion, undercharging is as bad as taking 7 per cent full commission up front and walking away from the client and in that sense the RDR achieves very little.

Sam Caunt



Aviva launches auto-enrolment proposition

Aviva’s automatic enrolment solution for employers has gone live today. The provider’s new online tool, called ‘Auto-enrolment Manager for Employers’, is designed to help employers comply with their auto-enrolment duties. The system allows employers to connect to multiple pension schemes and payroll systems, and can be used across other providers’ pensions. In addition, Aviva says […]

Simon Collins: Ethical case study on acting as a trustee

Scenario: One of your elderly, and wealthiest, clients has asked you to act as a trustee to the trust that you have recommended. Currently, you have no direct involvement with the client’s children, who are in their 40s, but you are aware that they have another adviser. The substantial funds that you have under management […]


Experts back Shaughnessy call for protection tax breaks

Protection experts have backed Zurich chief executive for UK life Gary Shaughnessy’s call for the Government to investigate introducing tax breaks for protection products. In his first interview since joining Zurich from Fidelity in June, Shaughnessy (pictured) says policymakers should consider extending the incentives offered to pension and Isa savers to people who buy protection […]


Steve Bee launches 50p a day auto-enrol compliance product

JargonFreeBenefits has developed a new product which director Steve Bee claims solves the automatic enrolment compliance conundrum facing small and micro-employers. Bee (pictured) says the new product, JargonFree Pensions Compliance, will allow payroll providers and accountants to provide an auto-enrolment compliance service for companies with between 1 and 50 employees. He says the system can […]


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