The two main hurdles preventing IFAs moving to fees are the difficulty of paying fees to bigger firms and consumer unwillingness to pay for advice, warns Threesixty Services.
Partner David Ingram said commission cannot be abolished as most consumers are not prepared to write a cheque for advice and so would not get any advice at all.
He said bigger firms with multiple RIs also experience difficulties because of the onerous training requirements and strain on systems. The bigger the firm, the more resistance it might meet when trying to convince advisers to switch models.
Ingram said most of Threesixty’s clients are fee-based or moving to fees and the same two problems have been repeatedly cited when advisers shift their business model.
He said: “In a true fee-based model, a consumer would take the advice and then write a cheque for it but that is not going to happen so if we abolish commission, what are we going to do without disadvantaging our clients?”