Of course for our clients this is fantastic news because effectively nothing has changed, they already know what our fees are and they know what our service proposition is.
But stop the world of financial services decides to make this a little messy. We have been told that perhaps we may need to get new fee agreements signed because they do not refer to adviser charging, everything else is ok. And what seems worse is that some providers may need their own forms signed as well. So now it starts to get messy nothing has changed for our clients except for a word so what do we do?
Just to add to this confusion one wrap / platform provider has launched a new charging proposition. One clean and one not! We only have a small amount of money on this platform and we have been told the money can remain under the old structure. In fact working out the cost difference between the two there really isn’t much difference between the two. However, we manage the clients’ portfolios and may change funds. At this stage we have been told that we can have the old rebate funds forever effectively even if we are using it as a new fund. Confused well I am, effectively the FSA (or new form of the FSA) want us to move to a clean charging structure but it appears this platform is saying we can keep with the old even if we change funds. This doesn’t seem right.
Of course we then move to the question of rebates, we won’t argue for or against but some platform / wrap providers have said they would get special terms for funds but of course they can’t keep the special terms and any rebates can’t be paid as cash unless of course there is a change of heart. So how does it work? Well of course unit rebates to the client. Looking at when you come to take charges from clients some providers may have cash accounts and some may not. Those with cash accounts will expect you to manage the cash to pay charges and those who don’t will take charges by unit cancellation.
And then to add to the confusion with only a couple of months to go the FSA have still not finalised the rebate issue, it is likely to go but they are asking for industry feedback.
Don’t get me wrong a clear clean fee structure is what we need but this has been going on for years, providers can’t deliver a final answer until the FSA sort it out. The FSA have had years to finalise things and they will but about two months before it is due to launch. Of course financial planners have to be ready by 1 January 2013 but direct to consumer well that is another mess that has not been tackled.
And then the question is do you become restricted or independent. I won’t bore you too much on this but I can become independent but restrict the business I do, or I can be restricted and restrict the business I do but look at solutions outside my restricted remit if that is right for the client. So actually there is little difference between the two.
So back to the beginning I thought we were ready but now I am not sure……
As for Joe Public, as the press prints more about fees how are they really going to be able to make informed decisions.