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Forget fees

We don’t need fees instead of commission, we need clarity and planning.

It is bone-numbingly cold and through the Georgian-leaded panes, by the oak-panelled doors, the flickering embers of the hotel’s first log fire of winter look enticing.

The wind that drives the rain sideways feels as if it has swept across most of Russia to get to the small market town of Huntingdon, in Cambridgeshire. Across the river Ouse the cows are clustered together, probably keeping warm. In short, I have every reason not to be here attending a seminar on inheritance tax, with a handful of fellow stalwarts,but I am.

I walk into the hotel reception and am set upon by a woman with energy of a late-night, phone-in quiz host. “Hello, hello, glad you could make it. Come in. You look soaked, is it raining out?” I resist the temptation to say no and that I had swum up the Ouse but instead I smile and hand her my coat.

I am shown into what was probably the Georgian drawing room when the hotel was a house and several ranks of well upholstered chairs greet me. A few have occupants, most are empty. I choose one in the second row and suddenly the girl is there again. “I didn’t get your name? You have a badge, you know.” I try to contain my indifference and smile again as she hands me one of those badges that characterise big conferences more than small seminars.

I scan the room. There are about 15 people drinking coffee and chatting to each other in twos. A couple of suited hawks swoop on them periodically with brochures and business cards. The attendees are, generally speaking, retired or close to it. No surprise there.

The seminar begins with what I guess to be a manager by the way he exudes self-confidence and smarmy chat and when he takes his place at the side of the room with a clipboard. He tells several bad jokes that he laughs at but at which everybody else simply smiles. “Gordon Brown wants your hard-earned money you know. We say he can’t have it and we’ll show you how. Inheritance tax is a pernicious evil.”

I imagine Gordon Brown as the Sheriff of Nottingham and wonder to myself about “pernicious” but let it pass. Most of the audience are true blue and have always seen New Labour as evil anyway.

The event proceeds with various standard IHT avoidance strategies, some simple, some complex but all delivered by an adviser on some sort of medication. It is tedious and, as an IFA, I am blessed with understanding the technical aspects, unlike the audience. Perhaps, the strategy is to get them all asleep and then pounce.

The event ends with a slamming of the evils of commission and here is the point of my piece. The presenters are stressing that they work “mainly for fees” and that this means they are eminently trust-worthy. A few of the audience nod in agreement, most drifted off hours ago.

I chatted afterwards with Field Marshall Hyphen-Hyphen Whatsit, who was intrigued. I hadn’t blown my cover but I obviously appeared knowledgeable enough to get him chatting.

“I don’t mind paying him a commission, if only I can understand what the blazes he’s talking about,”he said.

That says it all. Every one in the group around him nods in agreement.And that’s the point. We don’t need fees instead of commission, we need clarity instead of obfuscation, planning instead of product flogging and most of all we need to engage with the people who need our help. Fees will never guarantee that.

I charge fees when necessary and when the client prefers it and the number of those is increasing slowly. But my value to them is judged on knowledge, communication skills, good presentation and, yes, even salesmanship.They will queue in the rain for that.

Steve Buttercase is senior adviser at M2 Financial

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