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Ellis says pendulum is swinging towards fees

The Personal Finance Society believes the ABI’s report has opened up the fees vs.commission debate. The PFS welcomes the report, saying that the debate needed to be resurrected for the benefit of consumers.

It says the report, which aims to simplify intermediaries’ payment methods, should be supported in its call for greater transparency and better consumer understanding of how advice is paid for.

Public affairs director John Ellis says: “It does not matter what form remuneration takes, provided the customer gets value for money. This report proposes increasing simplification, which can only be positive, as it means the consumer will be able to make decisions. The only problem might be with the abolition of indemnity commission as ultimately someone has to pay for the changeover – the product providers.

“I think the pendulum is swinging towards fees, resulting in a greater professional standard of advisers’ quality of work.”

Bloomsbury Financial Planning principal Jason Butler says: “We offer a fixed fee across all products, with no bias and we only offer the product that serves the best interests of our client. It cannot get much simpler than that. We only ever offer an ongoing service. We have two types of fees – initial engagement and ongoing. Our clients can leave any time they want to, with a short notice period, we are not forcing anyone to stay. We would welcome them to come to us as mystery shoppers and bringing with them 10,000 worth of business.

“There is a cost for good advice but there is also a value for good advice. Well done to the ABI for entering into the 21st Century.”

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