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Sharon Bowles to launch EU crackdown on ‘excessive’ advice charges

Bowles-Sharon-MEP-480

Liberal Democrat MEP and Economic and Monetary Affairs committee chair Sharon Bowles is planning to launch an EU crackdown on “excessive” adviser charging.

Bowles says she is “unhappy” at banks’ post-RDR advice charging structures and wants to intervene with tougher disclosure rules for all advisers.

Speaking to Money Marketing, Bowles says she is looking to introduce rules that will force advice firms to show their charges as an hourly rate equivalent through Prips legislation currently moving through the European Parliament.

She says: “There could be more disclosure so, just like lenders have to show APR for interest rates, advisers show what it would mean for an hourly charge.

“There could be intervention when it is excessive as advisers have to prove they are earning their money.”

Bowles is also considering pushing for a ban on percentage fee charging through Mifid II in order to force advisers to charge a fixed fee or hourly rate.

Lansons Communications director Richard Hobbs says Bowles has significant influence in Brussels, but adds: “The rest of Europe is on a bancassurance model and does not have the same sensitivity to charges as we have. It does not follow that this UK-centric issue will carry very far when you involve all 27 states.”

Association of Professional Financial Advisers policy director Chris Hannant says: “I do not think it is appropriate at a European level to try and micro-manage fees. People will only agree to fees they are happy to pay and the sort of concerns she has are fanciful.”

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Comments

There are 33 comments at the moment, we would love to hear your opinion too.

  1. i think i’m going to become a politican, spout crap all day long and get paid exceptionally well for doing so. Oh yes and not forgetting the big fat expense account.

  2. Another blast of hot air from the Ginger Whinger.

  3. Better still let’s investgate Ms Bowles’ Salary and Expenses’ Claims and work out what it is costing US the Uk Tax Payer per Hour for her Services! Perhaps she may want to publish this so we can judge if she is worth OUR money!
    Great to see that a once Profitable industry contributing to UK GDP is being decimated..

  4. Who is this moron to start dictating market fee levels? Does she not realise that a lot of the charge actually goes to pay costs? I could nearly understand her frustration if it was all money in an advisers pocket but even then clients can shop around if they dont like their first, second or 3rd offer. Bringing it down to an hourly rate will not make one bit of difference. She really is a silly woman.

  5. Taking the average salary for an MEP, adding in the daily subsistence allowance, then adding in reimbursed travel costs, it is estimated that the total annual cost of an individual MEP is £400,000.

    However, then consider the establishment and ancillary costs, the costs of offices, the staff and everything else that an MEP will consider necessary and have at their disposal.

    Perhaps MM might ask Sharon Bowles to apportion her individual share of the total involved and let us know her hourly rate?

    One suspects it may well fall into the “excessive” category.

  6. I wonder if she ever got her own nose out of the trough if she would be any good at finding truffles and perhaps earn her living for once?

  7. How about an EU crackdown on the excessive number of MEPs?
    While they are at it they could introduce a crackdown on the cost of regulation, which is currently costing more than is saved in consumer detriment.
    Advisers are paying around a fifth of their profits to keep unelected, unaccountable quangos in operation.

  8. I suspect these people will never be happy until the entire advice industry has gone out of business.

    Then 10 years down the line they will try and re-invent it when they see the significantly increased social services costs.

    As someone who once followed politics I have found myself no longer watching Question Time because the low intelligence, blinkered thinking and slavish following of party lines makes me so angry. I’ve even started listening to music radio in the morning instead of Today.

  9. We all need to ignore people like these as they have no grasp of reality and don’t comprehend that the UK taxpayers are being overcharged for her services but there is no appeal process except at an election

    MEPs seem to get elected because the majority who don’t give a toss don’t vote, so in essence we get the MEPs we deserve and our bills still keep rising for the EU directives year on year, because if they stopped issuing them, there would be no justification for the MEPs existence.

    Not a bad idea !

  10. Nicholas Pleasure 8th February 2013 at 11:21 am

    Once Ms Bowles hourly rate is published may I suggest that as advisers we club together to create a fund that can offer to pay her double to just shut up and go away?

    That would be nice.

  11. Is she aware a significant proportion of the costs used to base advice charges on comes from regulation and compensation schemes and the costs incurred in constantly shifting business models to suit the regulators current flavour of the month. Less interference and burocracy would greatly help in making advice fees more affordable.

  12. I wondered where Stan Bowles had got to these days. Great player in his pomp, similar hair-do!

    Daft lass and a hypocrite to it would seem!

  13. Please all send your excellent comments to; Sharon.bowles@europarl.europa.eu

  14. Ridiculous, ignorant and stupid comments from this woman – MEP indeed.
    You’d think they’d have something better to do.
    Unbelievable that they are actually trying to dictate what IFA’s charge and trying to micro manage IFA small business (because they will leave the Banks well alone as usual).
    They seem to think IFAs should work for free – who will pay their ridiculous levels of regulatory fees when we are all out of business.

  15. I see no reason why fees should not be expressed as an houtly rate and an estimate of time being given – same as a solicitor or accountant who is engaged is obliged to do.

    All the evidence shows that most people don’t shop around and if the cost is too high it doesn’t make any difference whatever way you disclose it.

    Of course her first comment is she is unhappy at the Banks so it is geared towards helping an IFA compete fairly.

    There is no information on what she considers excessive but I doubt it would be at a level that meant it was not profitable to stay in business – clearly that would impact everybody.

  16. Ms Bowles was elected in 2009 with a total vote for the Lib Dems of 14%. This entitled the party to have 2 MEPs, thus a 7% of the vote counted to elect her to the European Parliament. In the same election UKIP got 18.8% of the vote and again got 2 MEPs. (9.4% per person).
    The Conservatives got 34.8% of the vote and got 4 in, a rate of 8.6% per person. The greens got one @ 11.6% and Labour got one @ 8.2%.
    So Ms Bowles owes her position by a warped election system that allows her a political platform with such a small minority vote that if it were first past the post, the Tories and UKIP would have over half the total vote. Who created this godawful election process? How does she speak for anyone in the South East? She is a patent agent and runs her own firm, and with a degree in Chemical Physics and Mathematics she was at my uni at the same time as me, although I never met her as I was into rock music, running disco,s etc at the time. I digress!
    The point is that some of our most difficult clients after teachers are engineers, as they can count the cost of everything but not the value, and she is one of them.
    She first got promoted to the EU by replacing, on the party ticket, Chris Hume when he got elected to parliament, and we all know what happened to him. Perhaps hubris is a common trait of MEPs, lets hope.

  17. This from a woman who represents one of the most corrupt organisations in the Western world. As I understand it, auditors have refused to sign off the EU accounts for many years.
    People like her contribute absolutely nothing to the wealth of this nation, in fact are a drain on taxpayers money, and then have the affrontery to try and dictate how others earn their living.
    What a complete buffoon.

  18. I seem to be alone but I do not think this is a bad idea. Advisers like to charge by a percentage as it is easy, and on the whole it is easier for the client to accept than if the client has to write out a cheque. When ‘fees’ are being paid as a percentage of the investment it can leave the client open to abuse from an adviser. The adviser may publish an hourly rate of say £150 per hour, but for ongoing services charge say 1% of the clients investments. Say the investments are £500,000, that is £5,000 per annum. If the adviser spends 20 hours servicing the client that is some 13 hours extra fees extracted from the client for nothing. Nice work if you can get it. In effect the adviser is actually charging an hourly rate of £250 per hour, £100 more than the published rate. If you have nothing to hide what is the problem?

  19. I was all for RDR as I did believe that adviser fees should be fully disclosed. This I’m afraid is a step too far as everybody involved in financial services knows that wealthier investors help subsidise work that we do for the less fortunate clients.

    I would like Mrs Bowles to explain to an investor who only has £10,000 to invest how charging her say six hours work at £170 per hour is fair. Is she really going to run on a ticket of supporting a reduction in fees and charges to the wealthy who are normally happy to pay us to save them tax.

    All I can say is good luck in your re-election campaign as I for one will be publicising her blatant attempt to burden less well off with higher charges to subsidise the rich!!!!!

  20. “Bowles is also considering pushing for a ban on percentage fee charging through Mifid II in order to force advisers to charge a fixed fee or hourly rate”. You can just see the conversation now; “dear mr client, we no longer charge 3% on your investment of £100,000. Oh no, instead we work on a fixed fee because EU regulations tell us to and the fixed fee for your case will be £3,000.” Fantastic regulation.

    How obtuse is this woman? And how does one quantify “excessive” exactly?

    As her comments seem to be directed at banks it seems that she’s just wants to have a “bash” at them.

  21. @ Mr Consumer
    “There is no information on what she considers excessive but I doubt it would be at a level that meant it was not profitable to stay in business – clearly that would impact everybody”

    Want a bet?.

  22. Maybe she should target her energies at cutting the gravy train that is an MEP.

  23. Again a politician meddling in an area that she doesn’t understand. With regards to excessive charges by banks, well banks don’t offer advice any more, only wealth department and IFAs. If she did her research, post RDR charges are a lot less than before and the people that pay them can afford them.

    She assumes that all IFAs are on seven figure salaries, whilst most work excessive hours to make a living. Maybe communism would be fairest to her.

  24. Do not worry about what this lady is saying.

    She will do as exactly as she is told by the Germans,and they have bigger fish to fry than this.

  25. Oh my god I just read something really funny about this woman apparently she made the shortlist to become the next Governor of the Bank of England.

    Well I’m so glad she didn’t get the job because if this is the type of idea she comes up with – God help us – just imagine what state the country would be in a few years time.

    http://www.telegraph.co.uk/finance/financevideo/9678133/Sharon-Bowles-has-the-balls-to-become-next-Bank-of-England-Governor.html

  26. Nigel Tinsdale | 8 Feb 2013 1:37 pm

    How many clients have funds less than £50,000 so if an adviser charged 20 hours at £150 to service this client it would equate to a 6% annual fee – can you imagine the outcry then!

    At least a % approach means that those with smaller funds have access to on-going advice – in other words the rich subsidise the poor which she should be positively encouraging.

  27. Well thats made my mind up on how to vote if we get the EU Referendum.

    OUT !

  28. Why are people so obsessed with hourly rates? Most lawyers charge a fixed fee plus an hourly rate and then they charge out their administration costs on top. I have a commercial lawyer as a client and his firm were involved in negotiating PPI contracts. Their minimum fee sometimes exceeded £100k and was not based on an hourly rate. The Law Society argues that the fee should be based on “complexity, technical skills/knowledge required, liability for the advice and lastly…hourly costs of administration etc. would you charge the same rate on a complex occupational pension scheme as you would for recommending a Cash ISA? A lawyer wouldn’t. Most accountants my clients engage work on a tariff based on the turnover of the Limited Company/Business they are working for, Investment Banks likewise charge fees based on the size of the takeover/merger deal, by all means discuss hourly rates….just make sure that all the above situations are covered in exactly the same way. It won’t happen…it would be restraint of trade and would not represent a free market economy….let’s all take a deep breath and relax…..if you can?

  29. RDR; Really Dumb Renumeration.

    Be careful what you wish for.

  30. Anon @9.17
    Don’t you mean
    Really Dumb Regulator?

  31. Another idiot who opens their mouth with no understanding of how we work.
    This particular idiot has made the same mistake as the FSA in deciding what information they want in their regulatory returns. An hourly rate is no indicator to the consumer of what they will pay. An adviser charges £200 per hour. A Paraplanner £100 per hour. A secretary £50 per hour. 10 hours work to do the job for a client. Depending upon complexity it could involve 10 hours of the adviser’s time or 1 hour of their time plus the rest of the time split between the other two under the supervision of the adviser. Or just one hour of the advisers time and 9 hours for the secretary.
    Cost for 10 hours work could be £2,000, £875 or £650. Hourly rate £200, £87.50 or £65. Depends upon complexity, risk, staff required and who does the work.
    Regulators should be run by people who do the job and directed by MPs who live in the real world.
    Moneymarketing should feed this back since it is a fundamental failure to understand what proper advisers do.

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