As clear as mud

Robert_Sterling_3 · 2 October 2004 at 1:04PM

This is an Xtraxt from a leaflet I received from a bank today:

"If you receive advice from one of our advisers they will give you a cost of advice statement. The amount will depend on the size of your investment. We allow for the cost of advice in the benefits provided by your plan, so you have nothing more to pay.
If you apply for your plan directly you have made your own decision as to the suitability of the investment for you, as such there is no cost for advice."

Hmmm

Milarky · 3 October 2004 at 2:00AM

Don't they have to write something formulaic like that just because of the regulation of the sales process?

[I think it's something to do with 'transparency' ::) ]

dunstonh · 3 October 2004 at 4:21AM

Seems fine to me.

When getting advice, there is a paragraph/section called "cost of advice". When apply directly, you are taking on full responsiblity for the plan and have no grounds to complain about suitability or advice. There has been no advice given so there is no "cost of advice" section required.

Robert_Sterling_3 · 3 October 2004 at 1:05PM

But since you pay the same for what you get as the people who do get advice I would claim that they pay nothing for their advice. This seems to be a bit of "double speak" or a bit of a chiz.

Rather like the bit on a bill at a supermarket which says 2.5% of the bill is for the financial transaction itself and is charged even if you pay in cash.

Gordon Brown is onto the latter case.

He seems to think it is a bit of a chiz too.

I realize there is no VAT on the 2.5% financial transaction cost. Even if the shop were M&S and M&S financial services did the transaction.

P.S. Delete "chiz" and replace with "creative financial accounting".

dunstonh · 3 October 2004 at 1:59PM

Are you saying that the product offered has exactly the same terms when you go get advice and when you dont get advice?

If yes, the comment may seem a bit of a cheek as they are effectively making more out of the plan as they are keeping the commission to themselves. In this case, they dont need to put the "cost of advice" section in the literature which is what they are referring to in.

That comment isnt a regulatory requirement so it could be worded differently.

Wherever a provider offers the same terms with advice or execution only, you should go for advice. You get the consumer protection and you may get the IFA to refund some of the commission depending on the amounts involved. So you could end up getting more with an IFA than you can direct.

As clear as mud

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