While I appreciate the point that Phil Gammond was making in his letter (Money Marketing, December 4), he was overgilding the lily in his comparison of the actual cost to the customer of fees v commission.
It is not right to compare the net cost of advice (£120 in his example) with the gross earnings the customer would need to achieve to pay an equivalent fee (£392 in the example). Whether a fee or commission is charged, the only relevant point to the IFA's customer is the amount he pays from his net income.
For Mr Gammond's example, that is £235 on a fee basis compared with £120 on a commission basis – still a swingeing increase but not the threefold increase Mr Gammond suggests.
Mark Dowling, Audit project manager (insurance and unit trusts), Group audit & compliance, Alliance & Leicester, Narborough, Leicester