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Advisers’ opinion split on future cost of advice

Advisers’ opinion split on future cost of advice

Financial advisers have disagreed as to whether the cost of financial advice will rise or fall over the next five years, according to a study by Investec Wealth & Investment.

More than four in 10 – 42 per cent – IFAs predict total fees will fall over the next half decade, but a third – 32 per cent - think they will increase, and a quarter – 24 per cent – believe they will stay the same.

Opinion is also divided on fees charged by discretionary fund managers, with most advisers – 53 per cent – predicting they will cut their charge, and 45 per cent thinking they will increase or stay the same.

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Mark Stevens, head of intermediary services for Investec Wealth and Investment, said: “Advisers recognise the additional value offered by bespoke DFMs and appreciate that this level of service is likely to cost more.

“However, given the continued strong demand for bespoke DFMs from investors, it’s clear that many clients have no qualms about paying for a quality investment management service and professional advice. This is a positive outcome for clients, their IFAs and DFMs.”

Adviser view

Clive Balchin, managing director of Lancashire-based James Trickett & Sons, said: “The problem with the cost of advice is what the client doesn’t see, which is the amount of regulatory and compliance work that goes into it.

“I think the cost of advice will come down, but the regulator has to give the good guys an easier time.”