New legislation is afoot which is going to reshape the way in which investors remunerate their advisors. This is because there are still cases where advisors are paid an upfront commission which seems disproportionate to the amount of work done and also because there are instances where advisors receive an ongoing fee paid by product providers despite not continuing to see and advise their clients.
The FSB has been hounding life companies and others to get their affairs (commission structures) in order for some time now, but despite repeated promises from the industry to do so, they haven’t all come to the party and the FSB has now had enough. They have decided to go the route which the UK authorities took and that is to introduce Retail Distribution Review legislation.
The White Paper has just been made public this week and your advisor will be addressing the issues it covers with you in the coming months.
Pressure is mounting on the financial advisory sector and the end result will mean that advisors will charge for everything they do for clients from now on, but at least you will know why you are being billed.
In other words, if you are receiving advice and acceptable service, you need to be willing to pay for it. If you aren’t, then don’t agree to an automatic fee being levied off your investment.
