MSE News: FSA bans commission to advisers on investments

feesarefare

magpiecottage wrote: »

I have seen plenty of cases where even the costs of writing business have not been covered.

How does that work? That doesnt seem very sensible to me. Surely if it costs more to write the business than you make, your better off not writing it? Where are these strange beings that are willing to to work at a loss while creating an ongoing liability for their business?

How do these IFA businesses manage to survive when other types businesses would go under operating on the same basis.

feesarefare

dunstonh wrote: »

Most can. These threads are a bit of a joke really. They allow the disillusioned with a chip of their shoulders to have a go at the distribution channel with the lowest complaints stats.

These threads certainly arent a joke!

Thats really out of order Dunstonh. These forums are here for everybody to air their views, and I dont think you do our industry any favours with comments like that.

As you are no doubt aware the IFA sector is far from perfect so its only to be expected that a number of people have a less positive view than you.

Why have you got such a problem with people that want more transparency on how we get paid and higher professional standards? The only IFAs I know personally who have problems with the RDR are the old school ex Abbey Life/Gan/Allied Dunbar/Llyods TSB/Double Glazing salesman and your not in the same league as them are you?

Perhaps you might like to comment on this http://www.fsa.gov.uk/pubs/plan/sdg_ri.pdf

feesarefare

spenderdave wrote: »

His charge obviously includes the time he spent afterwards sorting out paperwork etc

But they cant charge £190 per hour for doing admin , they surely have different rates for different work?

After all you have said about HSBC IFA I take you used the option of walking away?

feesarefare

TBeckett100 wrote: »

In most companies that is cross subsidised by the more profitable clients. If you are going to accept commissions it is fair to make everyone welcome. Of course the larger the investment the less % taken etc.

As a fee charging IFA I find it difficult to understand how you square that one with your "more profitable" clients? I would I imagine they wouldnt be overly impressed that you make more money out of them in order to provide a service your loss making clients. Just think about if I suspect you would find it embarrassing and very difficult to explain the scenario to your HNW clients , why on earth do you do it?

Take commission away and the £50 a month saver wont get independent advice.

Correct, there is absolutley no value in paying for independent advice if all your doing is saving £50 a month. Anyone with one hour to spare, access to the internet and possibly a pair of shoes could sort out a £50 a month savings plan.

dunstonh

Thats really out of order Dunstonh. These forums are here for everybody to air their views, and I dont think you do our industry any favours with comments like that.

Come off it whiteflag.

Why have you got such a problem with people that want more transparency on how we get paid and higher professional standards?

I havent and at no point have I said that. Please don't revert to form. You have been so much better under this login after your previous one was banned. We have been able to debate, discuss and disagree on points without any issues. Nothing is to be gained from making things up about what is being said or not said.

TBeckett100

feesarefare wrote: »

TBeckett100 wrote: »

As a fee charging IFA I find it difficult to understand how you square that one with your "more profitable" clients? I would I imagine they wouldnt be overly impressed that you make more money out of them in order to provide a service your loss making clients. Just think about if I suspect you would find it embarrassing and very difficult to explain the scenario to your HNW clients , why on earth do you do it?

.

to reword, having a larger bias of wealthy portfolios keeps the business running. if i were writing ISAs everyday and not much else, then the business wouldnt run.

I would not expect my wealthy clients to pay more to cover others. Most IFAs do a bit of "charity work"

charterman

I have nothing to fear from these changes. I am already more highly qualified than necessary and charge client fees. My fees are likely to rise due to the extra cost to my business of incorporating the associated changes into my business process and the extra charges imposed on me by the FSA. Those who think fees will fall are likely to be those looking for "cheap" not "good value". We recently stopped the "first half hour is free", clients now pay to see me.

I would say however that the clients, who ultimately are the most important in this, are unlikely to benefit from these changes. Those advisers who are determined to rip off clients will find a way. More people will get thrown to the banks for advice, from where most complaints come. These additional complaints will put up my costs and therefore client fees. Some extremely good advisers, who for whatever reason are not prepared to study for additional exams, will leave the industry. Who would you want to be your surgeon? Someone who has 30 years experience or someone who recently passed an "A" level?

I will be forced to concentrate my business on those clients who in reality need my help least, the wealthy. Those with limited resources will be unable to afford the fees I am forced to charge. The cost of regulation is what is killing the advice process not how advisers are paid.

"there is absolutely no value in paying for independent advice if all your doing is saving £50 a month." I am sorry but this is absolutely wrong. You put £50 per month into the wrong investment and you could cost yourself a fortune. If you can only afford £50 then you cannot afford to lose it.

feesarefare

Who mentioned investing? Saving and investing are two different things aren't they

merikiito

I still find it hard to believe that so much money can be made from other peoples money. The City has amazed me in the past with billions effectively being made from gambling other peoples money. People are giving advise on how best to spend/save/hide your money and making large sums of money out of it. Most of the information is available out there to make your own choice, it is people who are too dumb and have too much money to invest and then moan when it all goes t*ts up using the service (then wanting the rest of us to bail them out) Its about time we had a "National bank of UK" run for the people for the people enabling us to invest in our own country and then take more pride in where we live.

I have tried to use so called advisers in the past for Morgages, life insurance and savings and each time found a better deal afterwards with not a lot of effort. In all 3 cases using the internet!

The greed in our society should be stopped and people should be allowed to invest in there own jobs and country

feesarefare

TBeckett100 wrote: »

feesarefare wrote: »

to reword, having a larger bias of wealthy portfolios keeps the business running. if i were writing ISAs everyday and not much else, then the business wouldnt run.

I would not expect my wealthy clients to pay more to cover others.

but isnt that exactly what is happening?

Most IFAs do a bit of "charity work"

Agreed- I do, its just I keep it seperate from my "business", after all its the business that pays my mortgage.