Financial advisers are split on Which? research which criticised them for not providing a menu of charges on their company websites.
In its research published on Saturday (24 October), Which? analysed the websites of 500 UK advisory firms, finding that more than two thirds - 349 firms - did not publish fees online, giving customers no advance indication of what they could be charged.
The Consumers Association brand demanded that all IFAs to disclose charging structures on their sites so customers know what services are likely to cost and can shop around.
“IFAs are required to give prices to clients before an agreement is reached, but this usually happens at the introductory meeting. We believe customers should have an indication of what they will pay before committing to meet advisers face-to-face, where they could face a full sales pitch.”
It added that the Financial Conduct Authority currently states that it is ‘best practice’ for IFAs to display fees online, but Which? said the regulator should consider making it mandatory.
The research also revealed that nearly a quarter of sites purported to show their fees, but that most of these did not give enough detail for a real indication of what a consumer would pay. Only 2 per cent of the sites published “genuinely useful information for clients” including a clear breakdown of costs.
Advisers were split on the issue, with some supporting an industry wide template for disclosure, while others said Which? should stop telling IFAs how to run their businesses.
Danny Cox, chartered financial planner at Hargreaves Lansdown said one of the main benefits of the Retail Distribution Review has been the improved transparency of adviser services, their costs and value.
“Not everyone wants or needs advice, but those who are considering taking advice should be able to compare costs and value much easier.
“Adviser firms complain that the financial advice industry should be considered a true profession by the investing public but this lack of fee transparency isn’t helping their cause.”
Ben Smaje, managing director at Kennedy Black Wealth Management, said an industry wide template for advisers would be a good idea.
“I don’t publish my fees online, but it is something I have contemplated on a number of occasions; trying to break down the fee structure would be overly complicated and would put people off.
“I’m always transparent face to face, I want to operate on a no surprises basis and set everything out upfront. If I could distil it down and do it on the website I would but the clients I have tend to have complicated situations.
“We as an industry should be more transparent - there could be a way of doing it where there’s some consistency between websites.”
Neil Liversidge, managing director at West Riding Personal Financial Solutions said: “I just don’t like people telling me how to run my business, especially Which? Until such time as Which? is appointed regulator they can keep their nose out of my business.”
He added that his firm’s fee would be £1820 at an initial charge when giving advice on taking a 25 per cent lump sum from a £150,000 pension pot with the rest invested into an income drawdown plan, compared to the suggested average in the Which? report of £2516.
“We have nothing to hide. We are highly competitive.”
Simon Linstead, managing director at Nurture Financial Planning, added: “We clearly show our fees on our website and have done for some time; I feel that all firms should be this transparent.”
Earlier this year, research by Candid Financial Advice called out larger wealth managers for not disclosing fees on their site, suggesting that only five of the 50 biggest firms in the country do so.
ruth.gillbe@ft.com
