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Many IFAs confused over how to justify renewal

More than one in 10 financial advisers have no idea how to justify trail commission to their clients, according to research from 1st Software.

Three out of four advisers questioned in its survey said they will generate regular client reports and review their portfolios as justification of ongoing commission.

Seven per cent will review providers&#39 policy statements with clients and another 4 per cent will simply forward policy statements to clients.

Managing director Mik Cons says Treasury studies have shown that paying trail can reduce an investor&#39s total pot by between 18 and 20 per cent over a 20-year period.

Cons believes if the compliance burden is increased as a result of a Treasury/FSA overhaul of trail, then technology will increasingly be used by intermediaries to free up their time to give more advice.

1st Software is adding a stochastic financial planning tool to its iTrak wealth management software suite in January.

Cons says: “It is widely accepted that improved use of technology is the best way to create more time for advice.”


Independent view

It seems to me the FSA assumes it is easier to regulate a small number of large organisations than a large number of small ones. Experience tells us, however, that the opposite is true. If a large organisation decides to behave badly, all you get is a large number of people behaving just as badly. […]

Royal Liver Assurance – Progress

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Critical questions

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