Second Deadly Money Mistake Not Negotiating Financial Adviser Fees

This is the second deadly money mistake; consumers are fearful or do not even think about negotiating or even evaluating financial adviser fees and commissions.  You must talk about financial advice fees to get a better deal or you may end up paying too much for very little.

Direct to Consumer – No Advice = Full Commission

Many people may not be aware:

• Full commissions can still be paid on insurance policies and mortgage products.
• Full commissions/fees can still be paid on pensions and investments where no advice has been given.
• No wonder you are offered ‘free’ pens, ‘free’ alarm clocks, M&S vouchers and Amazon vouchers.
• There is no such thing as a ‘free lunch’ and as we know from Mistake 1, going direct may not be the best thing.  Mistake 1 Direct
• Consider also talking to a financial adviser/broker to assess whether you could get a better deal rather than going direct and paying all that hidden commission.

Financial Adviser and Broker Fee Disclosure

When you seek financial advice on pensions and investments, your financial adviser must disclose their fees and charging structure to you before you agree to proceed as well as having fully competent and qualified financial advisers.  No wonder most banks, insurers and investment managers ‘dumped’ their financial planning arms when these rules started on 1^st January 2013.  That said, you must be careful and force your financial adviser or mortgage broker to disclose all their fees so that you can make a fair comparison on even negotiate your adviser fees.

Not all financial advisers charge the same and you should not be ‘hoodwinked’ when an adviser gets out of their executive car, in a smart suit with polished shoes, a nice brief case and a laptop or tablet with the latest cash flow modelling app.  You are making mistake 2 if you do not ask them to disclose their fees and then discuss the added value that they bring to your position.  In addition, not all financial advisers charge the same:

• Many advisers charge a % upfront and a % ongoing of your portfolio value e.g., 3% upfront and 1% pa ongoing.
• Some, rarer, financial advisers charge a set fee such as us and a set fee based upon the number of different plans rather than the size of your portfolio e.g., £X upfront and £Y pa ongoing.
• If your adviser is cagey about their fees, then draw your own conclusions.

See our Fees Shop  Our Fees

As you can see, there is much to be gained from asking for full disclosure of fees upfront.  Do not let your financial adviser ‘fudge’ over the subject.  They want your business, and you can negotiate or even walk away.

Value for Money – Ask your financial adviser what you get for your ongoing 1% pa yearly fee:

By way of example, this is what we offer our 1 X Policy Gold Review Service clients at £435 pa:

• 10,000 knowledge articles online.
• 2,000 knowledge videos online.
• 25+ financial calculator tools.
• Private messaging service.
• Secure document upload and download service.
• Online calendar to book call backs and appointments.
• Online fees calculator.
• Client dashboard and more.
• Weekly news updates X 3.
• Weekly videos X 3.
• Weekly market alerts and sentiment.
• Monthly global markets and economic report.
• Quarterly ‘Easy Read’ newsletter.
• Quarterly ‘Technical Read’ newsletter.
• Unlimited contact and guidance sessions with a Chartered Financial Planner.
• Yearly full financial advice review and report on your investment performance and returns plus fund recommendations and switches for the coming year.

Do not make Money Mistake 2 – always find out exactly what fee you are being charged and what you get for your initial and ongoing fee.

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