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Chelsea reveals 30bps increase in advice cost

In a video interview with FTAdviser’s Emma Ann Hughes, Chelsea’s Mr McDermott said already there were early indications that a “decent proportion of the IFA community” would be putting their charges up.

Mr McDermott said: “If they lived on the trail commission, which is 50 basis points, there is evidence that the average IFA charge is going to be between 75 basis points and 80 basis points so that will be a detriment.”

On the subject of is the industry ready for the FSA’s Retail Distribution Review requirements coming into force in 2013, Mr McDermott said most had made decisions about how their business model would have to change.

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He said: “Most IFAs have had a decent leadtime in to this. There are still bits of information outstanding to them but in terms of their pricing models and how they are going to distribute their advice I think most IFAs ought to be well on the journey.”

Click here for the full interview.