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Candid’s Justin Modray: ‘Advisers have used RDR as an excuse to jack up fees’

Living up to the name of his business, Candid Financial Advice director Justin Modray thinks most advisers charge too much for what they provide.

It is a bugbear he speaks about regularly, provoking criticism from those who attribute rising advice costs to an increased workload post-RDR and pension freedoms. So what does he see as the problem?

He says: “Most clients do not have a clue either what they are paying, or should be paying, for advice. Many advisers avoid publicly disclosing what they charge, making it very difficult for clients to shop around and get a feel for what’s fair.”

Modray complains that some simply charge the standard industry rate rather than thinking about what consumers should really pay.

“Some think they can get away with charging a 3 per cent initial fee and 1 per cent annual fee. It’s high for larger portfolios and totally wrong. If they were to put it on their websites it would scare off a lot of clients.”

He has little sympathy for advisers struggling to disclose their costs clearly to consumers in a way that satisfies the regulator.

“It is as easy as displaying a rate card and a few scenarios with typical costs on a website. Almost every advice firm could do this, yet most don’t. I suspect it’s for fear of letting the cat out of the bag.”

Sorting the wheat from the chaff

Modray points out it would be easier for consumers to assess whether they would be getting a fair deal from advisers before meeting them if fees were published to a set formula. People would then be able to collect and compare the information they need and make a shortlist of advisers they want to contact.

While acknowledging the importance of the quality of advice, not just the cost, he believes price will be a big sway factor when comparing similar offerings.

“It feels like the quality of advice has generally improved, thanks to the commission ban and higher required qualifications clearing out the deadwood. But in terms of charges the advice market is largely taking a step back before it moves forward. Too many advisers have used RDR as an excuse to jack up their annual fees.

“Once they’re forced to publicly display their fees – which I’m convinced will happen within the next few years – we should start to see more competition as potential clients become more fee aware. That is a good thing.”

“Too many advisers have used RDR as an excuse to jack up their annual fees.”

Competition will cut through

That said, he expects some casualties as a result. “Legacy advisers probably can’t cull costs overnight to compete with more efficient, low cost competition, much like the airline industry has experienced.”

Modray came into financial services as a second-careerist in his mid-20s. He had started out in television commercial production but eventually decided his strengths lay in numbers and solving problems.

At 25 he moved into financial services with Bath-based advice firm Chase de Vere and was quoted on personal finance matters in the press. By the time he had joined Bestinvest in 2003, his media work had overtaken the advice side.

“While I enjoy talking with the press, as it is a great soap box to get messages across to consumers, I don’t particularly enjoy the limelight so running Candid Financial Advice is a great balance for me.”

Modray left Bestinvest in 2007 after it was bought by private equity firm 3ii. Having struggled to find another company he would want to work for, he decided he may as well start something himself.

“I wasn’t initially sure exactly what. To fill the time I taught myself web and database programming and ended up building Candid Money, a guidance website to help consumers avoid the many pitfalls financial services seems to throw at them.”

At Candid Money, Modray was constantly asked by consumers how to find a good adviser – a question he struggled to answer.

“Being unable to answer that question satisfactorily was a catalyst to thinking I should launch an advice firm I would be comfortable using myself.

“There were two key points. A good adviser will genuinely put the client’s interest first. It’s a cliché but a lot of people tend not to. The second point, which is closely linked, is making fees very competitive.”

Modray built the Compare Fund Platforms website to help people compare the cost of investing via fund platforms, stockbrokers and discount brokers. Candid Financial Advice was launched the same year with Ian Millward, Modray’s friend and former colleague at Chase de Vere.

“We worked out what we thought was a fair fee and how we could run a business charging that. While we are relatively low-cost we don’t compromise on the advice we give. It’s a key thing to build a business that’s whiter than white because the worst thing would be to build a business up and see it sink as a result of doing anything that’s deemed bad advice.”

Candid Financial Advice keeps a tight lid on costs, which allows it do the same for clients.

“We’re very efficient thanks to IT systems we’ve built ourselves and we prefer to train up bright people new to the industry than employ expensive old school advisers. But the fundamental reason we can offer our clients such a compelling deal is that we’re very patient and not greedy.

“We’ve been profitable from day one but are far more focused on building a valuable market leading business rather than trying to get rich quick. We feel there’s an almost limitless demand for what we’re offering and are very excited about the future.”

Five questions 

What’s the best bit of advice you’ve received in your career?  

I’ve had very little advice but I did learn a lot from John Spiers at Bestinvest.

What keeps you awake at night?  

Netflix. My wife and I are currently hooked on Breaking Bad.

What has had the most significant impact on financial advice in the last year?  

The demand for final salary pension transfers, although I’m pretty certain it’s a mis-selling scandal in the making.

If I was in charge of the FCA for a day I would…? 

Trim costs and focus on nipping problems in the bud rather than let them drift on to the FSCS with its ever-increasing levies.

Any advice for new advisers?  

Play the long game. Focus on doing what’s right for your clients at a fair price and never compromise your ethics.


2013-present: Owner/director, Candid Financial Advice and the Compare Fund Platforms website.

2009-present: Owner, Candid Money website

2007-2008: Consultancy work

2003-2007: Head of communications, Bestinvest

2000-2003: Consultancy work

1995-2000: Financial adviser, Chase de Vere


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There are 24 comments at the moment, we would love to hear your opinion too.

  1. Canniot see any annual fees displayed above for say a couple with 2 x SIPPs and 2 x ISAs total portfolio value £150,000?

  2. Interesting. Looks as though CFA charges on contingent only basis and works via telephone. Not quite like for like with most firms. Just wish we’d all get on with doing what we do rather than mud-sling at one another through MM or white papers.

  3. just had a look on companies house for Candid’s accounts but cant see much out there!

  4. Remind me Justin, whose idea was RDR?

  5. A trusted Adviser 5th May 2017 at 4:09 pm

    Perhaps Justin “the quality of advice has generally improved, thanks to firms being in control of their fees, not influenced by providers”! albeit that doesn’t really help your journalistic argument\twaddle.

    If you want cheap advice some one will always fit that bill from your mate in the pub to the adviser who operates on a shoestring and is under resourced to deliver quality and substance.

    Cheaper \ bargain basement advisers operate because they haven’t proven themselves with a large loyal following of clients whom they have worked with over many years, and there is a reason why they don’t have loyal clients. No one wants a bargain parachute, and you wouldn’t go to the cheapest mechanic to service the brakes on your car!

    Young and\or newly qualified advisers whilst needed for the future of the sector in my experience, lack the empathy, interpersonal skills and life experience a client engagement and servicing process needs, and no amount of qualifications can make up for this. Hence we need to retain our “expensive old school (vastly experienced) advisers”

    I agree with kevin the sooner people like you Justin, stop criticising your fellow professionals on the subject the better. Why not write about the brilliant outcomes clients receive from their long term trusted advisers?

  6. Nonsense. Advisers who deliver genuine value deserve to be well compensated. I also cant understand why it would be a good idea to have price competition amongst firms. This would focus clients on the wrong thing, drive down charges and turn advice into a commodity. Reading the press this week has just depressed me! wouldn’t it be nice, just for once, to read an article from someone praising the advice community…….just a thought….

  7. We are no different to a business that makes boxes – you cost your expenses, overheads etc + margin and that determines the cost of the box.

    It makes no sense to say an IFA charges too much because one IFA could be working from his study alone and one has an office with several admin and paraplanning staff.

    When I pay £3.50 for a coffee I know the raw materials are pennies BUT the value is the environment, the staff, and the cosy chair I’m sitting in

  8. “Struggled to find another company he would want to work for”, i.e. was unemployable?

  9. This is directed at Justin Personally – I used to enjoy what you wrote and was keen to succeed in your efforts at Candid Money, it was the “right thing to do”.
    I agree with you when you say “never compromise your ethics” but this continued “mud slinging” by you on cost of advice is in my opinion a breach of the CII/PFS code of Ethics itself.
    I resigned from the CII/PFS when the FSA were talking about making membership of a professional body mandatory as it it foces people to sign something they don’t agree with in order to work. The FSA saw the light and made just the SPS mandatory and there are bodies which will issue an SPS without being a member, provided you can show them your CPD. In addition if no one will issue a SPS, ultimately, the FCA ironically still remain responsible for them and whilst they haven’t had to yet as far as I am aware, it is sometimes important to risk breaching an ethics code in order to get your message across, but I do feel your continual accusations about the ethics of your peers on fees is simply unethical.

  10. I forgot to say I rejoined the CII/PFS when the mandatory nature was dropped. I may get a call from them for slagging you off here Justin, but to be fair, you were tarring ALL of us with a brush in an attempt to market your business and get free advertising of it.
    I don’t want or need new clients, I only take on referrals and don’t advertise and I certainly would not do it by slagging off my peers.

  11. Yes we should see more press about great advisers helping clients and making a big difference over decades.
    But journalists prefer bad news and scandals and judge others by their own standards?

  12. Cost ? …. the age old conundrum …… expensive or to cheap ?….value or rip off ? any answer to this is just an “opinion” or in the eye of the beholder !!!

    If the only thing we had to charge for was “advice” I would be in whole agreeance with Justin.

    But sadly its just a part of the overall charge. I would suggest Justin, go have a look at a good cross section of firms and advisers accounts, then offer up his “opinion” (if any, would be interested in his opinion)!

    My profit is broadly the same as it was 5 years ago my income has increased by around 22% maybe a bit more.

    Is advice (in isolation) expensive ? you bet you fat arse it is, but then the consumer is not just paying for advice, are they ?

    There must be a technical term for “Sh1t stirrer” ?

  13. Sounds like the FCA drum, cheapest is obviously the best, I think he had better hold hands with the other hack Lewis

  14. Derek Bradley 8th May 2017 at 9:34 am

    For those not old enough to know too much about the U.S. involvement in the 1960’s Vietnam war, and some of the madness surrounding it, this quote has gone down in history as an example of the some of the insanity that was Vietnam.

    As with many examples of madness in what should be a sane world, this quote, which I was reminded of recently, is well worth considering alongside. It is Callum McCarthy’s six pillars of wisdom speech at Gleneagles in September 2006.

    The so-called pillars on which RDR was to be founded were:

    1. an industry that engages with consumers in a way that delivers more clarity for them on products and services;

    2. a market which allows more consumers to have their needs and wants addressed;

    3. remuneration arrangements that allow competitive forces to work in favour of consumers;

    4. standards of professionalism that inspire consumer confidence and build trust;

    5. an industry where firms are sufficiently viable to deliver on their longer-term commitments and where they treat their customers fairly;

    6. a regulatory framework that can support delivery of all of these aspirations and which does not inhibit future innovation where this benefits consumers.

    The Heath Report Two (THR2) had been created to examine the consumer detriment caused by the regulator’s actions in introducing the Retail Distribution Review.

    The Heath Report Three (THR3) will be published toward the end of May.

    As Garry said “It did not seek to be a learned academic document but to assemble in one place a clear description of what RDR has created and suggest lessons that might learnt”.

    In April 2014; the Panacea Team, Lee Travis, now at PFS and Garry Heath met the with the FCA which dismissed the survey of 1,752 advisers, representing over 50% of the direct authorised IFA firms, as “unimportant

    At that April meeting, the FCA informed us that it would issue an internal review early in the autumn which we expected to be in praise of RDR.

    In the end, the FCA commissioned European Consulting and Towers Watson to produce and issue two lacklustre reports, which were quietly released in the week before Christmas to a distracted media – hardly the action of a confident regulator.

    These reports suggested that there was “no evidence of consumer benefit” leaving the FCA to opine that RDR’s “longer journey will benefit consumers”.

    As Garry observed, this is reminiscent of Mr Micawber’s hope “that something will turn up”.

    With the advisory community barely having the capacity to service some 10% of UK consumers financial planning needs and with the remaining 90% who do not want or cannot afford to pay for financial advice, we seem to be in a similar situation to the one described by Captain Miller’s, US Army Corps of Engineers Commander, Task Force Builder, 1968 46th Engineer Battalion 159th Engineer Group ,recollection of Major Booris’s reasoning for destroying a whole village with so much firepower.

    In the case of RDR only one of the six pillars stands, number 4. And as we all know you cannot build any sustainable structure on just one pillar. It just falls down. The regulator has ensured that the other five cannot be built as the ground beneath it has been destroyed by too much regulator firepower.

    In the Vietnam movie ‘Apocalypse Now’, Captain Willard, played by Martin Sheen, asks a seasoned vet while riding a helicopter over enemy terrain “why do you guys sit on your helmets”?

    The answer could be the same reason why IFAs only have a 10% capacity for advice?

  15. Justin your article makes me so angry your low ethical standards towards your fellow professionals and self serving article is poor. For Gods sake why don’t journalist write some positive articles and help educate the public. Also RDR happened and this gave the CII PFS a great excuse to rip off Advisors with unjustified high exam and study material fees on top of the non earning hours studying for level 4…client fees had to rise…FCA fees keep rising and so does the risk of doing business… A good advisor is adviser is scares now and in demand….so its pay back time. Like Gold scares services are valuable.

    Remember Ruskin…if you always seek the cheapest you need to add a margin for the service or product not performing to your expectations. If you do that you are best paying more for the quality service in the first place.
    In our profession to many clients and the FCA want to know the price but do not know the value provided by good advice. Until we educate instead of criticising nothing will improve.

  16. richard wright 9th May 2017 at 11:46 am

    For goodness sake we must be the most dysfunctional industry In the world. No wonder we get walked over and shafted from pillar to post. Its because the powers that be know that every time we will just accept it and take it on the chin. That’s because as a group the average adviser is not a great team player ( as in with the Industry), some are quite selfish and see criticism of others as a way to boost their own firms agenda (as in the above article) or are just plain apathetic.
    Yesterday we had a piece of news that the FCA has spent £65,000.00 of our monies on a pathetic Logo, why are we not talking about this news. Should we not work together as an industry to make the FCA more accountable and fight our corner together on the extortionate fees we are paying to them rather than trying to win brownie points by nit picking about other advisers fees? I totally disagree with this whole piece, we do not have to have our fees in banner headlines on our websites and clients do not think fees is the most important aspect when choosing advice. Every adviser I know offers an initial non charged appointment, at that appointment every adviser I know clearly explains all the various fee options and every other aspect of the service. If the client does not like it they will not come back for the second appointment. That’s pretty straight forward in my book.
    By the way Justin Modray, I see nowhere in this article any details at all of your own fees, any reason why you wish to withhold the information from us?

  17. Justin Modray 9th May 2017 at 6:08 pm

    Richard – our fees are openly published on our website

    • Justin, your fees are a rip off. Why aren’t you charging a client for the work that you do when providing initial advice? Why don’t you use an hourly rate to justify your charges? That’s how I do it, it’s obviously the fairest way to charge.

      All just opinions really.

  18. Years ago I was taught there was quality, cost and speed. Generally you can only have two of the three. If you don’t like the quoted cost then it is always possible to visit another adviser to ask for their cost for the same service. It is impossible as an adviser to consider cost without understanding the position and work involved so “example initial fees” as shown in client agreements are pretty worthless unless it is an initial fee expressed as a simple percentage, which is less likely to give clients value in most cases.

    If the FCA are keen, as they seem to be, to regulate the cost down then it is likely that the quality will suffer (or in fact potentially those offering to provide it in the market disappear).

  19. Stupid should say ‘Some Advisers…’ (and it would be correct too!)

    Come on MM you’ve gone all red top to a broadsheet audience!

  20. Julian Stevens 30th May 2017 at 9:52 am

    Higher qualification standards, more stringent requirements for keeping our technical knowledge up to date, higher FCA levies (up year on year waaay ahead of inflation), higher PII premiums and less certainty of cover, hugely increasing FSCS levies, more stringent requirements for evidencing advice suitability (both initially and ongoing), constantly changing legislation with which to keep up, relentless increases in the culture of claim-to-gain, frequently (not always, but frequently) illogical verdicts from the FOS…. Might all these factors have something to do with increasing advice costs?

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