Commission banned: are you now more likely to get financial advice?
With the implementation of the Retail Distribution Review, commission payments to financial advisers are now banned. Does that make you more likely to seek out independent advice?
The revolution has arrived, with financial advisers now banned from receiving commission from the providers of any products they recommend to their customers.
The regulators have moved to ban such payments in an attempt to clean up the financial advice industry and to ensure that people like you and me, who may seek out some financial advice from a professional, get the best, unbiased guidance. The thinking goes that we will no longer be steered towards a specific product simply because the adviser will pocket more cash in higher commissions when we take it out.
The changes mean that we will have to pay for the advice we receive up front though, rather than the previous model where many advisers offered their advice free, relying on the commission.
You can find out more about these changes in How to transform your finances in 2013, while How much does financial advice really cost? is also worth a read.
So have these changes made you more or less likely to get financial advice this year? Does the removal of commission make you more likely to trust an adviser’s judgement? Or will having to pay for their insight up front put you off speaking to them in the first place?
More on financial advice
How much does financial advice really cost?
Wake up your Wealth: a digital financial adviser
When should you get financial advice?
Why DIY finance can be dangerous
Should you go to a financial adviser?
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Comments
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As usual for all shades of Government these days sadly, a possibly sensible (who will ever know?) piece of legislation, but with unintended consequences that were obvious to everybody except MPs and Civil Servants.......
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What happens to those of us who used IFAs to arrange say, pensions which need ongoing reviews ? Any change in any year, and they automatically get a percentage commission. Will they still be entitled to do so? I asked for an annual review, and asked that my adviser contact me automatically, but he never has, yet when I make changes up till now he still gets a bite. This seems very unfair. however, from now on, when we want to make a change, or have it reviewed each year, will we be expected to pay a sum each year? What if it it just reviewed and no change is deemed necessary or worthwhile? Their percentage earned to date is not insignificant..
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No change - I wouldn't use an FA before, and I am no more likely to in the future.
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02 January 2013