All Change on the Advisory Front


From 1 January 2013 Independent Financial Advisers (IFAs) are not permitted to charge commission on the services they recommend but instead will charge a fee for the advice they provide.

Advice has never been “free”. If you received financial advice before without a fixed cost, then you were probably paying commission in the form of a percentage of your investment – typically 1% to 8%, or sometimes more on a lump sum. So for an investment of £10,000, your adviser could have received between £100 and £800 commission.

Instead of receiving commission on new investments your adviser now has to clearly explain how much advice will cost and together you will agree how you will pay for it – either as a set fee paid upfront or you may be able to agree with your adviser that they can deduct their fee from the sum you invest.

In addition, the new regulations state that advisors who offer independent advice must consider all relevant options – if this is not the case, it must be clearly stated – plus the IFA have raised the minimum qualifications standards for practising IFAs, giving consumers greater peace of mind.

For a referral to one of our partner IFAs, Professional Solutions IFA Ltd and Abacus Assurance Financial Services Ltd, please contact the office.