Advice firms criticised over hidden fees

Advice firms criticised over hidden fees

Financial advice firms have been criticised for not spelling out their charges, making it hard for people to shop around.

Research by Candid Financial Advice found only two of the 60 largest advice firms in Britain published explicit charges on their website, while another two gave a general indication.

Justin Modray, director at Candid Financial Advice, said: “When the FCA banned sales commissions at the end of 2012 this offered hope for a fresh start.

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“But old habits die hard and anecdotal evidence suggests many firms have used it as a welcome smoke screen to significantly increase their annual advice fees, typically from 0.5 per cent to 1 per cent.

“I say anecdotal because it is hard to prove when firms keep their fees such a closely guarded secret. It is still almost impossible for people to easily shop around and get an idea of what a financial adviser is going to charge them.”

Brewin Dolphin and Hargreaves Lansdown were the two firms which listed their fees on their website.

Meanwhile Vestra and Fairstone gave general indications of their charges, with the latter listing “typical” charges.

St James’s Place, Chase de Vere and Origen were listed among those which did not list their charges.

A spokesman for Chase de Vere said: “It is misleading to compare Chase de Vere and Candid Financial Advice solely on charges.

“Chase de Vere has 200 advisers giving independent financial advice on a face-to-face basis across the UK.

“Candid Financial Advice has one adviser who gives remote independent financial advice by telephone. Not surprisingly they don’t mention this in their press release.”

A spokesman for Fairstone said: "“We quote typical fees on our website as they represent the average costs incurred by our clients across a range of financial advisory requirements – it is virtually impossible to highlight specific costs online without a detailed understanding of the client needs.

"To try and be as transparent as possible we do also highlight the typical ‘all in’ costs for both financial planning and investment management. Ultimately the fees charged depend upon the type and complexity of the advice required, how long an adviser and paraplanner need to spend on the matter and also what level of ongoing service the client would like."

SJP and Origen did not respond to a request for a comment.