No Advice Websites Can Charge What They Want

No Advice Websites Can Charge What They Want.

Following a focused review of the annuity market, the financial industry regulator, the Financial Conduct Authority has confirmed that “no advice” services do not need to disclose how much in fees they will be paid/deducted from your pension or investment in real numbers, they can still use percentages provided it is clear to the consumer.

What’s the fuss?

Financial Advice – when you receive financial advice, your adviser is required to agree a fee in writing with you. As all our clients will know, we confirm our fees as a set monetary amount in writing. Some financial advisers hide behind %’s but the regulator is applying pressure to make sure that % based advisers give examples of works and fees in real numbers to help the consumer. In addition, when you receive advice, your adviser is responsible for that advice and for its suitability. To give advice, a financial adviser must also have a high level of qualifications and keep their knowledge up to date.

No Advice Selling - when you buy a financial product, no advice is given and yet again there is no requirement to agree a fee in writing with you. Provided the fees paid usually with the word “commission” used, is confirmed in the key features quotation small print, they are free to charge what they like. We suggest this model, in many cases, is designed for “the more you sell the more you get paid”. There is no liability for any financial product’s suitability and you are on your own, you made the decision to buy. There is no requirement for the salesperson to have high level of qualifications and keep their knowledge up to date. For many, you may end up paying more and getting less. Why do you think there are so many banks, building societies and insurance companies who have closed their financial adviser arms or set minimum limits that you must have at least £150,000 to get advice? Excellent commissions, no advice, no liability, no research.

Comment

Words can never truly express our astonishment at how the regulator is failing to protect the consumer.  Yes, banks have huge distribution potential which is what the regulator needs i.e. people to have access to financial products, but some of these products and service are awful. The regulator has a statutory duty to protect the consumer and promote financial awareness. This is not the answer.