As a Financial Planner, knowing I have provided a good, transparent service means I have no concerns over whether or not a client would be happy to pay for ongoing advice. Costs are certain while the returns are not, so they deserve your attention.

With the industry average ongoing advice charge being around 0.81% (Financial Conduct Authority, Financial Advice Market Review (2020)), it is hugely important that ongoing advice fees are justified by the service that advice firms are giving to their clients.

Ongoing advice is a hot topic in the industry at the moment with the FCA raising an eyebrow to the 20 biggest advice firms over ongoing service concerns. The FCA has raised concerns about firms not providing an annual review of the ongoing suitability of their advice as part of the service that some clients pay for.

In light of the implementation of consumer duty, I think we will see more of these investigations from the FCA into whether advice firms are looking into their ongoing advice service to ensure that they are providing real value for what their clients are paying in ongoing fees.

I was speaking with some prospective clients a few weeks back who were unaware that they were paying ongoing adviser fees from their investments that are held with another financial advice firm. When I mentioned the ongoing fees to them, they said something along the lines of “well we haven’t had or been offered a review for the past 4 years!”. This was shocking to me and completely unacceptable of the firm that they currently hold their investments with.

Annual reviews are crucial to not only review ongoing performance but to ensure that the plans remain suitable for clients ongoing circumstances that are bound to change over time as they move through different stages of life. However, there is much more to our financial planning process than just review meetings and there is a lot that goes on behind the scenes with our ongoing client service.

Here are just a few ways in which we add value to clients:

-Professional tax planning
-Discounted charges to products and platforms
-Our specialist planning software and tools
-Regular performance reviews, switches and rebalances

We add value through our expertise and industry experience across abroad range of areas, all aimed at providing the best possible financial outcomes for our clients. 3% per annum could be added through best practice financial planning relative to the average investor experience (Vanguard, 2020).

Here are 4 points to consider when thinking about the value you get from your ongoing relationship with a Financial Adviser:

1) Keeping your financial plan on track – your financial planner should have an oversight of your overall financial situation and understand what your personal goals and objectives are, providing specialist advice and guidance to keep you on track with your financial plan.
2) Annual review meetings – you should meet at least once a year if you are entitled to an annual review meeting. On top of this, don’t be afraid to check in with your adviser if any queries pop up throughout the year. You are paying an ongoing fee for advice and should therefore feel you are getting value for money.
3) Fees – your fees should be both transparent and competitive for product, fund, and advice fees.
4) The type of firm you are working with – you may wish to consider whether the firm you are working with are independent or restricted and what impact this may have on your investments both now and longer term if your plans were to change.

If you are happy that a Financial Adviser can tick all of the above boxes for you, then you should be in a good position to achieve your financial goals. However, if the above points aren’t being met then it may be time to consider other options to ensure you are getting exactly what you pay for!

If you would like to review your financial planning arrangements please feel free to get in touch with me, at [email protected] or 01603 266333