Time for a new approach…
Traditionally, the financial services business model has relied on the supposition that a client will make a financial purchase which will result in the generation of a commission for the adviser or his company.
But what if the best advice for you is to place your money into National Savings or maybe just leave it in the bank? And what if you need a tax planning report as opposed to a new investment?
We have had issues with this traditional approach for some time. Finally, following a review by the Financial Services Authority of the intermediary sector (Retail Distribution Review), it has been decided that from January 2013 product providers will no longer be able to pay commissions to financial advisers for the sale of investment related products.
In its place will be something called Adviser Charging, which simply means that the way you pay your adviser has to be agreed between you, and that the costs of product charges and the cost of advice must be clearly separated. But this does not mean that you will physically have to write a cheque to receive financial advice (although you may wish to pay for advice that way). Fees could still be deducted from any financial products that you purchase, but the main benefit is that you can be more confident that your adviser isn’t recommending a product to you because of the commission he’ll be paid.
We welcome this move as it’s a far more transparent way of delivering financial advice and we wholeheartedly support the FSA’s decision.
Please go to our how we charge and services pages to find out more.
