In the build-up to – and in the aftermath of – the Retail Distribution Review advisers up and down the country have been scrambling to find a charging mechanism that works.

For many the end of commission has been a death knell; bond pushers that used to take up to 7% initial and advisers that offer no ongoing service have found themselves suddenly having to become transparent and losing client interest as a result.

There is no doubting that this is a very positive thing; for a long time the smoke and mirrors in financial services have served to cloud the clear picture to consumers.

In terms of pure economics, the worst thing about lack of transparency in a marketplace is the fact that the market cannot operate efficiently and competition is hindered. And the moment competition is hindered consumers get a bad deal.

For a charging structure to ‘work’ it must be fair, not daunting, actually cover the work being done and cover costs the clients don’t see – regulation, compliance, software etc.

The charging structure must also be manageable. We have seen difficulties with some investment platforms as to the logistics of how the product fees to the adviser are actually generated. Some say nothing has changed, some require a wet signature on a fee statement for each and every piece of business, and some require us to manage a time consuming and complex method of moving money around within a client’s investment to cover charges.

As a business trying to do the best by our clients and get paid properly for the valuable work we do, without any hidden agenda, it can be challenging.Edinburgh_Castle_-_geograph.org.uk_-_28

We have discussed every way we can structure our fees so that they are attractive, fair, workable, easy to implement and simple.

Each time we reach this undeniable fact: a simple initial and ongoing fee, not linked to the value of the assets managed and paid externally from any platform, is the only way forward.

It will take time to implement fully, but we shall be extracting ourselves from any overly complicated or confusing charging and shouting the virtues of this from the ramparts of Edinburgh Castle.

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