Nearly half of advisers think clients are being overcharged, survey finds Nearly half of advisers think clients are being overcharged, survey finds

15 Mar 2017 Tom Hegarty

Almost half of advisers think that some clients are overpaying for the value of service they receive, according to a survey conducted by SimplyBiz's New Model Business Academy (NMBA).

While 53% of the 139 advisers who took part in the survey thought clients were not paying too much, 47% said clients were being overcharged.

Those 47% said they were particularly concerns about high fees for outsourced work, and initial and ongoing service. Concerns were also raised that wealthier clients were being overcharged. 

The Financial Conduct Authority recently raised concerns about investment advice charges as part of its review of the asset management market. 

NMBA managing director Tom Hegarty (pictured) said the recent focus on charges from the regulator had prompted advisers to rethink charging structures. 

'The regulator has never provided specific terms around adviser charging, which may explain why there is such a wide range of charging structures in our profession,' he said.

'Ahead of the retail distribution review, “three plus a half” emerged as a popular pricing standard, although this linear scale is often now seen as unfair, especially for those with larger ‘pots’, despite the argument that the adviser is taking on a higher risk.'

Hegarty said the focus meant advisers needed to ensure they designed charging structures with clients in mind. 

'To avoid any further industry "finger-pointing", we recommend that all charging structures should be designed with the customers’ interests at its heart and that measures are put in place to minimise any potential conflicts of interest,' he said.


Testimonials

"I can thoroughly recommend SimplyBiz to any IFA who is either already directly regulated or who wishes to go directly regulated. I conducted my own independent 'Fact Find' on the various companies (both Networks and Service providers) in the marketplace and found SimplyBiz to be the best. I am most pleased with the T&Cs, the high level of service and of course the very competitive cost that SimplyBiz offers members."

M Mohan
Middlesex

Read More

Latest News

GDPR – the dawn of a new era in data security and usage

January 09, 2018

As you are no doubt aware, the General Data Protection Regulation (GDPR) was first introduced in April 2016 by the Information Commissioner’s Office (ICO) and the new regulation must be adopted by every UK firm that handles personal data by the 25th of May 2018.

Read more >

View from the top...

January 09, 2018

With nearly five decades of experience in the financial services sector, SimplyBiz Group Chairman, Ken Davy, provides a unique perspective on the advisory landscape. In this edition of Adviser Today, Ken gives us his view on the FCA’s recent Paper on the ageing population, and why he feels this piece of research is so important. 

Read more >

Davy warns of 'year of regulation'

January 04, 2018

SimplyBiz founder and chairman Ken Davy has warned 2018 will be the year when advisers are hit by more rules and regulations than ever before.

Read more >

A New Year message from Ken Davy

January 03, 2018

SimplyBiz Group Chairman, Ken Davy provides an update on the year ahead, regulation, our services, and his campaign to reform the FSCS funding system. 

Read more >