FeesJul 18 2017

Mas warns advisers off first free meeting

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Mas warns advisers off first free meeting

A director at the Money Advice Service has questioned whether advisers should offer their first session for free.

David Haigh, financial capability director at Mas, was addressing the issue that many people feel they need help with their finances but are unwilling to pay for it.

He said: "One of my reflections is that in the UK, when they get advice, the first session is often free and arguably many individuals feel that gives them a moral obligation to follow through and not just take the free session.

"There is an argument to say that the way our culture works, that is not entirely helpful.

"People are worried it gets them into a long-term relationship."

Darren Cooke, director at Derbyshire-based advice firm Red Circle, said he can understand Mr Haigh's view, but it is not a situation he has experienced.

"I'm clear that the first meeting is at my expense which indicates its not free as such, It allows the client to get to know me and see if they would like to deal with me and vice a versa, it also allows me to see if I can help them.

"And I'm very clear that at the latest by the end of the meeting the prospective client will be aware of what help I can be to them and what, roughly at least, it will cost them if they want to proceed.

"My fees are also available on my website so they can check against those that I'm not overcharging them on the back of a 'free' meeting. All of these I feel are best practice."

Alistair Cunningham, adviser at Surrey-based Wingate Financial, said he has found "quite the opposite" of what Mr Haigh described.

"Most people welcome a first meeting, and we would bear the cost of an initial phone or face to face discussion.

"We live in a world where information is basically free, and that first meeting is a chance for us to show our expertise and the value we add.

"I've actually had clients quite insistent they want to pay us, and we decline, due to value they've had from a first meeting, especially when information we've provided has not led to advice.

"An example might be explaining the various pension protections from the lifetime allowance."

Mr Haigh added the Mas research also showed that most consumers don't care about the difference between advice and guidance.

He said many consumers guess the difference between the two correctly, bit just as many get it the wrong way around.

Mr Haigh said: "We can get ourselves wrapped up in a debate about this.

"For many consumers it is academic. They don't get the difference and they don't care."

damian.fantato@ft.com