How much is too much for Financial Advice?

 

Ok, I finally cracked on the weekend. There was an article written about Adviser Charging - specifically the ongoing advice charge - and the link was posted on twitter causing one financial journalist to tweet "A percentage based, Ongoing Adviser fee is daylight robbery."

I don't normally rise to such things, so whether it was lockdown, home schooling, not being able to see my big kids or a combination of everything, I decided I was going to write a blog, rather than post a video (my chosen path of communication on social media).

Income is a sensitive issue I get that and whatever you do for a living, if someone said "you're charging too much" I'd imagine it would create a response of some description - even no response is a response!

But to answer the question, we have to look at the value the client feels they get. The fact this article uses a clients story and their experience, suggests the client wasn't feeling or seeing the value, in which case, one could say that whatever the adviser was charging was going to be deemed too much?

A percentage fee ongoing? if markets go up everyone benefits, if it goes down, the clients value reduces, as does the income for the adviser - is that fair?

Perhaps a fixed fee for ongoing work is fairer? if markets go up the adviser gets the fixed fee and nothing more, if it goes down, the adviser still receives the same fee - is this right?

There are advisers who sit behind the desk, stress testing the portfolios they recommended, making changes every quarter. There are others who outsource that work, freeing their time to help a client with their future plans. Finances at the core, but looking to really understand why someone is saving or where they envisage being when they retire and how much will they need each year to do just that, ensuring the future finances are in good health and if not, suggesting changes that need to be made to help. There are advisers that do all of it.

Should those that do everything charge more?

Every client is different. Some of my clients pay me a fixed fee per annum, some pay me a percentage of the assets I look after, some only pay me when they want to meet me.

It isn't 'Daylight Robbery' its is a charging method that doesn't work for that individual and the charge in the end, becomes too much for Financial Advice.

This blog is the thoughts of the author and is not to be considered as Financial Advice

Victor Sacks is an Independent Financial Adviser at VS Associates Ltd an Appointed Representative of Sense Network Ltd.

VS Associates Ltd and Sense Network are authorised and regulated by the Financial Conduct Authority