Commenting on a Which? report, ‘Make the Grade’, which concluded that less than a third of financial advisers give good advice to their clients, Liberal Democrat Shadow Chancellor, Vince Cable MP, said: “This finding emphatically underlines the growing and glaring need for a genuinely independent system of generic financial advice – one that does not depend on the self-interest of people trying to earn themselves commission.
“The government has put a lot of money into financial education and is supporting the principle of a levy on City companies in order to strengthen financial education. However, this report makes it clear that a more urgent problem is the lack of independent financial advice that people can access, before they run into serious debt.”
In response to Cable’s attack on commission payments, Justin Wiggins, independent financial adviser at Heliting Services Ltd, said: “From my point of view as a self-employed adviser, any fees I receive are my salary, the alternative would be that the client pays me. Clients, in the main, don’t want to pay a fee and given the choice 99.9 per cent of the time they will choose not to.
“Public perception is that people want something for nothing. Products are not loaded to incorporate the fee so the customer won’t lose out,” he added.
Paul Brett, director of Freehold, said he believed all financial professionals should charge a fee for their service. He commented: “I agree with paying fees for financial advice. If you go to a lawyer, solicitor or tax adviser you will always pay a fee. If you don’t, it reduces the perception of them as a professional person in the eyes of the customer. When the customer does not pay a fee they are thinking of what the person is getting out of it.”
