According to a Financial Services Research Forum survey, consumers are sceptical about independent financial advisers when they are paid commission, as they believe that it will result in the recommendations being biased.
But the study also found that the majority of consumers are also reluctant to pay for advice. The survey showed that in the UK, most people took advice before purchasing Financial Services Authority regulated products, as this advice was seen as being necessary due to a lack of knowledge, a lack of up to date information and the need for specialist guidance.
Independent advice was found to be more popular than tied, but the research showed that banks and building societies were used, mainly because of the trust that consumers placed in them.
It was also found that social class played a part in the type of advice sought. The higher social classes showed more of an interest in financial advice than the lower classes.
Our view
is a fee based adviser. Every client is quoted a fee before any works are commenced. Why should an adviser get paid double commission for filling out the same application form and research if a client, who originally agreed to invest £10,000 in a policy, then walks through the door with a cheque for £20,000 meaning the commission doubles?