In my column published here last month, I highlighted the disproportionate increase in advisers’ regulatory fees and, in particular, the staggering unfairness of the rise in the FSCS levy.
Having now reviewed a significant number of actual invoices, it is alarming that these cost increases seem unrelated to any change in the way in which an adviser is operating.
I still believe that these uncontrolled and unjustified costs are the greatest threat currently facing the adviser community.
I therefore found it even more troubling to read in a more recent story on FTAdviser that a survey conducted by Money.co.uk showed that consumers were willing to pay an average of £253 for advice on their pension, while the average adviser cost for such a consultation would be £500.
On the face of it, these statistics, coupled with the aforementioned rise in fees, suggest that advisers are being squeezed from both sides in a way which, if not quickly and fairly addressed, will make continuing to advise clients virtually non-viable for a great many firms.
It appears, however, that the Money.co.uk survey was conducted only with over-55s who held a pension, and that it focused specifically on pension freedoms advice.
The age and existing financial situation of those surveyed suggests that they are likely to have received ‘free’ financial advice previously in the pre-RDR world. If this is the case, paying a fee for advice would be more foreign to them than it would to someone receiving advice for the first time.
Second, the portrayal of pension freedoms in the mainstream press suggest that many consumers view advisers as a barrier between them and their pension pot, rather than as a trusted adviser, working hard to safeguard their best interests.
The portrayal of pension freedom in the mainstream press suggest that many consumers view advisers as a barrier between them and their pension potHowever, even given the slightly skewed foundations of this survey, it does appear evident that the RDR has not yet achieved one of its major goals, that of helping to improve the perception of financial advisers in the eyes of the general public.
The vast majority of advisers are highly skilled specialists and it is frustrating that so many consumers are yet to realise the true value of seeking professional advice.
I am hopeful that a light at the end of this particular tunnel may emerge from the recently announced Financial Advice Market Review.
When launching the review, City minister Harriet Baldwin stated that it aimed to make high-quality advice more accessible for consumers. This would be an achievement which would benefit everyone, consumers and advisers alike, and one I would urge you all to support in whatever way you can.
Ken Davy is chairman of SimplyBiz Group
