Advisers see future in up-front fees
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Your support makes all the difference.FINANCIAL advisers have begun charging fees as their traditional commissions come under attack from the consumer lobby and the Government. The shift involves only a minority of advisers, and even then they are likely to set their fees against the commissions they earn from the products they sell, but hourly rates of pounds 75 or pounds 80 are not unusual for London firms.
Rules laid down for independent advisers under the Financial Services Act and enforced by Fimbra, their main regulator, state that they must make it clear to clients how they will be paid for their advice. There is no obligation to spell out an hourly rate, although Fimbra recommends this.
Because the rules do not cover the rates, customers may find themselves on shaky ground in seeking redress for what they feel is an unfairly high bill. David Weardon, complaints manager at Fimbra, said: 'If it is not totally apparent that a member has overcharged, and it is clear there is no breach of rules over how the adviser was to be remunerated, this would be a matter of commercial practice.'
Fimbra normally distances itself from matters of commercial practice, although it could put pressure on a member if there was a clear case of overcharging.
Mr Weardon said rules over fees and charges were a 'problem area' and he believed it would be taken into account by the Personal Investment Authority, a new regulator that eventually is to assume responsibility for advisers.
He said Fimbra (071-538 8860) occasionally gets complaints about fees but they normally relate to claims that consumers were not told how they would be charged.
The Insurance Brokers Registration Council (071-588 4387) has a code that requires a broker to agree fees in advance, and Jane Rees, IBRC registrar, said brokers are also expected to estimate the time it is likely to take.
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