I am writing in response to your Letter of the Week (FA, 29 January), in which a disgruntled consumer bemoaned his local IFA firm’s fixation on percentage-based fees.
In my experience, people who volunteer that they are “happy” to pay me a fee do so expecting it to be considerably lower than the fee that is subsequently quoted to them.
I do not expect anyone to be “happy” per se to hand money over to me. I do however expect them to understand and appreciate what (tangible and intangible) benefits they are getting from the transaction, which is not usually something that can be totted up as easily as “three hours per review meeting”. What price experience? What price current market and legislative knowledge? Pensions are a specialist and complex area with huge ramifications for ill thought-out decisions.
If people do not want to pay the going rate for ongoing pension advice then they will end up without ongoing pension advice. It is a free country. However, if I got quotes from five builders (for example) and they were all much higher than I expected, then my conclusion would be “perhaps there is more to this job than I thought”. And I would certainly not go back to them to ask if they would do it for half the price.