Over the last few weeks I have been writing about the state of financial services, particularly about high charges, no guarantee of performance and why ongoing financial planning should provide better value than advice/selling especially if the ‘adviser’ depends upon selling a product for their remuneration.
There was an interesting article in The Sunday Times on 8 September basically confirming my thoughts.
Whilst the article focused on disclosures by an ex St James’ Place ‘partner’ and the pressure (and incentives) they were under to make sales, the same can also be said, to some extent, for most financial advisers who are dependent on selling products, although the days of extravagant corporate hospitality and gifts are, thankfully, long gone for ‘independent’ financial advisers.
The main points I took for this article were:
‘Advisers’ were under great pressure to sell.
Customers pay high one-off fees for advice, taken from the savings product.
The effect of the charges, after the effects of compound interest was to take almost half the profits.
Customers never really understood the charges even though they were presented with them.
If someone wanted to withdraw money, it was made difficult for them to do so.
It was all about appearances, with dazzling marketing and ‘free’ advice seminars.
Please do not get caught up in all the hype of financial services.
Do not look for financial advice, seek ongoing financial planning.
Ensure that you pay for advice directly, don’t have ‘adviser charges’ hidden in the product fees.
Understand what you are being charged for.
Understand the value of the advice you are paying for.
In my next blog, I will suggest how you can identify if you are getting value for money for your financial planning.
If you would like to talk to a truly independent financial planner please get in touch on 01661 860438 or email David at firstname.lastname@example.org
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