Advisers who publish their fees upfront on their website will lead to customers having more trust in the industry.
According to Justin Modray, co-founder of Candid Financial Advice, most advisers are still failing to publish fees on their websites.
A survey conducted by the company in 2016 found the overwhelming majority of financial advisers failed to publish fees on their websites. He said the implication of them not doing so was because they had something to hide. Mr Modray said the situation has not changed.
Mr Modray said: “[Clients] feel [advisers] make it difficult to find out how much they are charging. This makes it difficult for people to sit at home and compare prices.
“The only way to find out would be to call the adviser who will try to get them to meet and as a result they feel obliged to use them because they have met them.”
Some advisers have said that the complex fee models built into platform and provider structures can make it difficult to explain what the fee will be.
But Mr Modray argued there are still many ways advisers can give an idea of what the fees look like, including by providing realistic scenarios.
He said being more transparent will improve the trust between customers and financial services, and firms that are more transparent are also more likely to fare better when attracting customers.
“IFAs are not massive steps above double glazing men, and that has to do with adviser charges still being opaque,” Mr Modray said.
Mr Modray has previously called for the FCA to compel advisers to clearly publish both their fee range and example fees for typical scenarios on their websites. This has not yet happened, but Phil Bray from marketing agency The Yardstick Agency said there are effective ways IFAs can disclose fees online.
They can compare fees using information from sources such as the FCA Data Bulletin and use scenarios to give clients a broad idea of what the fees could be.
He also recommended firms should explain the reason behind their charging models, adding that advisers need to make it easy to find fees so that it does not look like they are hiding something.
Mr Bray added: “Don’t just upload your fee agreement and think that’s job done. It isn’t.
“Think about how the page flows, and where the information is displayed. If your fee structure allows, you might consider developing an online calculator to allow the consumer to calculate the fees payable for their circumstances.”
Ima Jackson-Obot is features writer at Financial Adviser
