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Half of advisers think clients are being overcharged

Half of advisers think clients are being overcharged

Nearly half of advisers think some clients are overpaying for the value of the advice they receive, findings from the New Model Business Academy showed.

The New Model Business Academy asked its members how they view the range of charging structures offered across the sector.

Among the 47 per cent who felt some clients were being overcharged, the main concerns were around high fees for initial and ongoing service, overcharging wealthier clients and charging for outsourced work.

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But 53 per cent of advisers did not believe clients were overpaying and said charging structures do not fully reflect the amount of work involved in providing advice.

Tom Hegarty, managing director of the New Model Business Academy, said: “The regulator has never provided specific terms around adviser charging, which may explain why there is such a wide range of charging structures in our profession.

“At the New Model Business Academy best practice meetings, this topic often provokes healthy debate and our findings demonstrate that there is a distinct lack of consistency across the industry. 

“The discrepancy across the industry does, of course, make it difficult for customers to judge whether they are paying suitable charges for the value of advice they receive.

“However, despite the varied offerings, what was agreed across our member base was the value of the adviser-client relationship, where trust and personal service are seen as paramount.”

Research by consultancy firm Harrison Spence found that adviser charges have steadily increased in recent years with a 1 per cent charge now becoming the norm.