17 November 2014

Financial Advice - still room for improvement

I can only sympathise with those who are not involved full time in the financial world, and who find financial products complicated!

I have my own pension plans (as you'd expect), and one was set up some years ago by a local financial advice firm, before I could do it myself. I have not heard from them for years and had forgotten that they were flagged as the financial adviser for that plan - so they have been receiving "trail commission" every year even though I've been managing it myself.

They have just written to offer an ongoing service - presumably because the Financial Conduct Authority is making noises (quite rightly) about advisers needing to provide an ongoing service if they are receiving ongoing remuneration.

The plethora of charges they quote can only be described as confusing, even to someone in the know like me! Their letter quotes product charges which differ from my annual statement, there are new discounts on the charges which are (though it doesn't explicitly say so) conditional on taking the new ongoing advice service, and there's the new ongoing advice service itself which differs between the financial adviser's letter and the product provider's illustration.

They generously add that they will not charge me an initial advice fee for signing me up for the ongoing service. But they leave it up to me to complete three rather complicated forms if I wanted to go ahead.

Part of the problem is historical - older pension products in particular had complicated charging structures and special deals with certain financial advice firms who promised to do their best to push that providers' products (so much for independence). And I fear that we are not out of those woods yet.

But part of the problem is also being unable to see things as clients do. I'm not perfect (I know!) but I do try hard to present things simply and clearly to my clients, and I do (usually) complete forms for my clients, requiring them only to check and sign. 

I'm always glad to hear if someone thinks there is room for improvement, but I do like to think that our letters to clients are generally readable and accurate.

1 comment:

  1. I am glad to know that you have pension plans for your retirement and I think it’s really a good approach to think about it when you are able to earn good. I also have a high paying job and will be consulting a personal financial advisor Las Vegas to discuss my financial investment plans.

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