In a recent article in the Financial Times, Moneybox’s Paul Lewis discussed whether financial advisers, wealth managers and fund managers take a percentage of their clients’ invested assets year after year.
Below, Adviser Points of View asked financial planning expert Sam Jennings of Jennings & Co Financial Planning his opinion.
Jennings says: “We have regular contact with our clients and a lot of interaction with them due to the ongoing advice fees that can be factored into the funds. The majority of clients like the fact they can call us, have multiple meetings, fund switches and review the policies we have set up on a regular basis without the fear of being invoiced for it. We don’t believe many clients would approach us or ask for additional advice if there was a worry of being charged for it each time.
“The general public like to stay within their comfort zone, and to let things tick along in the background.”
“I would say the general public like to stay within their comfort zone, and to let things tick along in the background. Many people have old pension policies and investments that they mean to dig out the paperwork for and get them reviewed. However, if they felt as soon as they walk through the door of an adviser and ask for an analysis to be carried out on their policy, that they were going to be charged a fee, it would delay many potential clients from walking through the door. However, if that same client already had money invested and was being charged an ongoing fee within their existing fund for advice, we would carry out the analysis on the new policies with no additional fee.
“Our clients are segmented into groups and partly based upon the ongoing advice fees each has. The ones that are charged a smaller fee for ongoing advice due to the funds under management for them, the different service and regular advice, analysis and communication they receive, and vice versa for clients with higher levels of funds under management. Rather than focusing on the cost, we try to give value for money.”