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Pete Matthew and Dennis Hall on tackling disclosure

Money Marketing reported yesterday on emerging findings from the FCA’s suitability review which suggest the regulator has uncovered more issues with charges disclosure than suitable advice. Here we speak to two advisers about how they have created and evolved a disclosure process that works for them.

Pete Matthew

Managing director

Jacksons Wealth Management

Matthew-Pete“With disclosure, you have got to be all things to all people. A document which sets out how you charge has to work for every client that walks through the door, despite entirely different financial circumstances. For me, you have to disassociate the charging structure from the products advised on. One of the best things I did was charge for the advice phase. I can have an initial chat with the client and set out what it will cost to get from that point to making a recommendation.

“You have to walk people through the financial planning process and help them understand what is involved at each stage. But it is tricky. People still walk into advisers thinking commission applies and that we are broking products. The starting point is whether they have sought advice in the past, getting them to forget past assumptions and educating them that they are in a professional advice environment. I just don’t think we’re there yet.

“The last thing an adviser wants is a client being surprised by a charge they weren’t expecting. That is immediately going to destroy any trust built up between the adviser and the client. We need to make the process as low-friction as possible.”

Dennis Hall
Managing director
Yellowtail Financial Planning

“If you are directly authorised, how do you police your disclosure internally? If you have to interpret the rulebook yourself, and you are not attending FCA roadshows or reading what they send out, then firms, perhaps conveniently, may overlook what good disclosure looks like.

“We invoice annually in pounds and pence, and before we do any work we let clients know what is going to be charged. Those who are preparing it on the admin side may sidestep some of the angst that goes with charging because they don’t have to present the costs.

“The more conversations you have, and where you get pushback on fees, the more you review your model. If clients are questioning whether the service is value for money, then what is? We are constantly tinkering and continually looking to remind ourselves where the value sits. We use business metrics a lot more, in terms of how much is this costing.

“We have to adapt to clients that may not be ready to accept ‘full frontal’ advice costs. You might use contingent charging in that instance, while still explaining what they are paying. Sometimes advisers are ready for that part of journey in terms of disclosing full costs, but clients might not be.”



FCA suitability review reveals advisers struggling with disclosure

Early findings from the FCA’s suitability review suggest many advisers are still struggling with disclosing their charges to clients in a way the regulator is happy with. Almost a year after the FCA requested 1,200 client files from 700 firms, the regulator has given individual feedback to firms on suitability and is aiming to publish […]

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The long, patient wait for FCA answers on suitability

First things first: I am not about to hammer the FCA for taking its time to report back to the market on its high profile suitability review. For one thing, firms which took part have had their feedback, albeit on an individual basis. The second point to mention is overall conclusions from the review do […]

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FCA: High charges don’t necessarily mean unsuitable advice

Documents released by the FCA shed light on how the regulator has assessed IFAs in its advice suitability review. Notes from a two-day file review training course released under the Freedom of Information Act show how the FCA wants file reviewers to check both suitability and disclosure requirements. Among the guidance given by the FCA […]


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