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#adviserweek: Can IFAs justify charging clients 1%?

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by Natalie Fast on Nov 28, 2012 at 11:16

#adviserweek: Can IFAs justify charging clients 1%?

Natalie Fast logs onto Twitter to find advisers discussing their fees and swapping fashion tips.

#adviserweek is produced in association with M&G.

10 comments so far. Why not have your say?

Paul Barnard

Nov 28, 2012 at 15:10

A video about Twitter? Whatever next

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Julian Stevens

Nov 28, 2012 at 15:12

I'd thought that Adviser Charging levels are to be a matter of agreement between the adviser and the client with a view to removing all and any provider influence in the matter. Is it anyone else's business? I certainly hope that the regulator doesn't seek to stick its unwelcome nose into the proceedings, not least because it [the regulator] never gives us any say in what it charges us to pursue (and all too frequently fail to deliver on) its own self-set agendas.

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James Clancy

Nov 28, 2012 at 15:41

Rubbish you can get away with brown shoes and a Blue suit

What more important when wearing a suit wear always wear a tie.

The more you spend on your accessories Shirt, Tie, Shoes (the more expensive the better) belt etc you can always dress in ordinary blue suit and get away with it.

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Richard Butler

Nov 28, 2012 at 15:49

We moved to a platform based asset management offering 6 years ago. Our proposition clearly states what we do, how we do it and how much it costs. The client decides whether this represents a valuable proposition or not.. Nobody else's business - not even the regulator can interfere with a free market economy as Providers used to. Can they?

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Julian Stevens

Nov 28, 2012 at 16:11

Oh yes they can. The FSA can do whatever it bloody well fancies and, as things presently (though hopefully not forever) stand, without being answerable or accountable to anybody. Okay, one or two people might be called to appear before the TSC every once in a while, but you only have to look back to March 2011 when Hector Sants and Sheila Nicoll appeared to realise how little that means.

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Duncan Carter 2

Nov 28, 2012 at 16:33

The further question however is, will 1% actually be enough in some cases?

For very large amounts 1% may be too much but for mid range it feels right for us when we break down the time, effort, risk and on-costs. Some years we over-run and others under on an individual client basis.

As Richard B mentions, we put our 'wares' in the shop window and if the client likes what they see then they'll buy. I'm very happy if people don't want to pay, we simply don't act for them. It's a bit like going to Sainsburys for baked beans, I don't see them giving much away for free!

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David Cathcart

Nov 28, 2012 at 18:14

Well said, Duncan, as with everything if we are left to run OUR business eventually market forces will dictate what are acceptable levels of fees. Specialist advisers will be able to charge more, generalists will have to accept the market norm.

Profitable FS businesses are well capitalised and by that very fact, well managed, understand the value they provide to their clients and so have happy clients that come back again and again. This surely what the regulator strives for in all regulated businesses.

The regulator must resist at all cost interfering in the commeciality of regulated firms. If they do not they will in effect create state run advisery firms, which will benefit no one, especially the consumer.

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Julian Stevens

Nov 28, 2012 at 18:33

What the regulator wants is an unachievable Utopia in which every member of the public, regardless of their means, ability or willingness to pay for it, receives absolutely first class, comprehensive and comprehensively researched and documented advice with zero risk of loss and is charged only peanuts.

In striving towards this objective, the regulator (if nobody else) considers it entirely acceptable to charge the industry a king's ransom every year because hey, it's very raison d'etre is consumer protection and consistently perfect consumer outcomes. Under that flag, it can justify virtually anything to anyone.

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Duncan Carter 2

Nov 28, 2012 at 19:25

I saw an article the other day about Barclays Wealth proposed charges, sounded like an oxymoron to me given how their minimum fee is going to be £37,500 or so a year. I assume it meant the wealth that will belong to Barclays.

Reassuringly expensive wasn't the phrase that came to mind nor was it 1%!

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Philip Melville

Dec 03, 2012 at 17:34

Julian,

Our income comes from our clients and I doubt that anyone would have the ability to tell any one of them that they could not pay us for our service.

What would they ( ?) do ? Demand to see our clients bank accounts ? I think we are happily a very long way from that kind of situation .

It is a very interesting situation when the relationship is between you and your client as compliance etc only become relevant as a means of ensuring that your clients understand why you are a part of their financial arrangements and more important why you should be retained in that position.

The needs of regulator etc very much take second place to those of your client.

As we move forwards an awful lot of the industry preconceptions will fall by the wayside as clients begin to understand our role and the costs involved with us.

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