IFA networks believe the menu will increase clients' understanding of charging structures but do not think it will cause a significant increase in the number opting for fees.
Simply Biz chairman Ken Davy believes that the clearer the information the client has of the costs of different types of distribution for different financial services products the more they will understand of the advantages of having an IFA.
Tenet chairman Barry Kayes and Informed Choice managing director Nick Bamford both believe that clients will still opt for the commission model because the cost of advice will be clearer in all areas.
Kayes says: “IFAs will have to put forward their rationale of fees versus commission and I believe it will take the focus off commission. When customers see the figures broken down, they will still want to take the commission route.”
Davy says: “I support the inclusion of fees as well as commission but I do not anticipate that consumers will be selecting the fee option over commission in massive numbers although over time I think it is realistic to expect a gradual increase in the number choosing fees.”