Compare Independent Financial Advice to Bank Financial Advice Fees
The Retail Distribution Review (RDR) which took effect on 1 January 2013 means that for any financial services advice that you receive, a fee for the service must be agreed before you adopt the service. Many banks have moved to non-advised selling processes meaning that they can still take full commission and avoid agreeing a fee.
The fee can still be paid from the policy, commission in all but another name.
In addition, the Mortgage Market Review that started in 2014 also sets out that many mortgage products cannot be arranged without advice to avoid the debacle of toxic mortgages that we have seen over the last few years and bringing about the collapse of many banks across UK, Europe and the US.
Advisers are now segmented into
- Independent Financial Advisers - whole of market advice, fee must be agreed
- Restricted Financial Advisers – limited advice by areas advised on or by companies that are advised on/sold. Fee must still be agreed – many banks and building societies have adopted this model.
- Non-advised Sales – no advice, your decide what you want from a list of products, full commission can still be taken - many banks, building societies and websites have adopted this model.
Given that many banks have started to release their fee structures, we thought it a good time to compare restricted advice fees to our whole of market independent fees.
Compare Fees and Advice
Our sources for the selected bank fees were those published or released to finance industry newspapers as at 18/01/2013 and have not been verified. Admittedely, as time a markets change, so may these fees.
Financial Advice for Investment fees below are for £25,000 Invested, many fees are charged as a % of the investment.
- AXA Insurance – Restricted Advice – Fee 3.25% = £812.50 + ongoing advice fee
- Co-operative Bank – Restricted Advice – Fee 3.25% = £812.50 + ongoing advice fee
- Clydesdale Bank – Restricted Advice – Fee 3.25% = £812.50 + ongoing advice fee
- HSBC – No Advice given meaning no liability and no recourse for compensation scheme or Financial Ombudsman - £475 plus ongoing review fees starting at £499 + VAT.
- Leeds Building Society – Restricted Advice – Fee 3.6% = £900 + ongoing advice fee
- Legal & General – Restricted Advice – Fee 3.6% = £900 + ongoing advice fee
- Lloyds Banking Group – Restricted Advice – Fee 2.5% but their minimum investment with advice is £100,000 – so minimum fee is £2,500 + ongoing advice fee
- Nationwide Building Society – Restricted Advice – Fee 3.0% = £750 + ongoing advice fee
- Royal Bank of Scotland – Restricted Advice – Fee £500 + 1.25% = £812.50 + ongoing advice fee
- Yorkshire Bank – Restricted Advice – Fee 3.25% = £812.50 + ongoing advice fee
- West Bromwich Building Society. – Restricted Advice – Fee 3.25% = £812.50 + ongoing advice fee
- FinancialAdvice.net (us) – Whole of Market/Independent Advice – Fixed Fees - Non Face To Face Fee £562.50 or Face To Face Fee £750 + optional ongoing advice fee
Conclusion on Comparing Financial Advice Fees
Simple conclusion: Whole of market, award winning, independent financial advice is cheaper with us than the restricted financial advice sample above.
Speak to us today and learn more about how adviser fees work.