The cost of advice will increase as IFAs move to adviser-charging models, says Taxbriefs editorial director Danby Bloch.
He said: “The cost of advice will go up quite a lot in net terms. Fees will be received in exchange for advice and the client will pay them out of net income. If you combine the 20 per cent VAT that may be payable on advice, plus payment out of net income, then you have got a substantial increase.”
But Ernst & Young director of financial services Malcolm Kerr said wealthy clients may see the cost of advice go down, as they will not be prepared to pay the same level of charges as a percentage of investment that advisers receive as commission. He said: “The commission being taken out of the product is significantly higher than the adviser charges that will be levied, particularly on wealthy people. The market will set what people are prepared to pay.”