Opinion  

Adviser dissent over long-stop highlights growing anger

Donia O’Loughlin

Many advisers that I speak to admit that they sometimes do work for free for those that cannot afford it. Others have told me they charge those that cannot afford advice a smaller fee than those with larger amounts.

Is that fair? Who knows but one thing is for certain is that those advisers who do this are trying to bridge the well-known advice gap. It can only be a good thing if others find more ingenuous ways of trying to achieve this aim.

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Bulk transfer battles

In other charges news, FTAdviser sister publication Investment Adviser reported this week that a rift has opened up within the platform sector on how to manage the move towards adviser charging.

Four platforms – including Cofunds, Skandia, FundsNetwork and Axa Elevate – have now stated they will keep paying trail and rebates from investments made before December 2012.

In contrast Ascentric, Novia, Alliance Trust Savings and Standard Life have all begun converting share classes in bulk with a view to moving their entire suite of funds on to clean fee share classes within the next few months.

This would have the effect of cutting off trail commission, potentially posing problems to those advisers still managing the transition to adviser charging.

Some advisers may be inclined to continue doing business with those platforms that are paying trail, whether it is in their clients’ interests or not. Others argue that a simpler, cleaner charging structure on all funds is better for clients.

Platforms on either side are playing to the gallery, but it’s not yet clear who is garnering the louder cheers.

Are Sipps and Ssas being too wary?

And finally, pension liberation.

This week providers acknowledged adviser “frustration” at the increasing number of pension transfer requests that are being refused, particularly to small self-administered pensions which many say are an increasing target of pension ‘liberation’ scammers.

Richard Mattison, director at Ssas administrator Whitehall Group, told FTAdviser he has had five transfers to what he described as “genuine” schemes blocked by five separate providers in the last two months alone.

I have been told by many Sipp providers that pension liberation schemes are becoming cleverer and are essentially cloning genuine pension schemes so they won’t be spotted. Whilst I understand the frustration, that old adage ‘better to be safe than sorry’ really comes into play here.

The real question is, where are the regulators? I feel sympathy for the providers in this situation as they are being put in a corner and, until we do more to tackle schemes as they are set up, these unintended consequences will continue.