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Since 2013 all UK financial advisers have been required to charge clients fees for any work carried out. Prior to this date, you may recall that commission was regularly paid to the adviser, and this could vary from provider to provider.

Why is it then that almost three years since this rule was introduced, according to a recent survey, many clients still do not know exactly how much financial advice actually costs?

A recent article in the Sunday Times highlighted the frustration many investors are facing with some of the UK’s largest financial advisory firms due to lack of transparency surrounding fees.

One firm was highlighted by the Sunday Times readers as providing extremely confusing literature and hiding behind anything but transparent fees. Not all financial advisers are independent, in fact, there has been an increasing trend to offer what is described as “restricted” advice. This suits the needs of many people and may provide a cheaper alternative to independent advice. However, independent is not necessarily more expensive. It is sometimes difficult to compare like with like when it comes to fees, especially where the advisory firm is also providing the investment solution.

At FMB, our documentation to clients clearly states our fees separately from any fund charges. The cost of fund and investment management (TER) and financial products is also made explicit in our reports to clients. Everything is separate so comparisons can be made, and the effects on future performance can be measured.

We have had a transparent charging structure in place since long before 2013 so all of our clients know exactly how much they will be paying before making any commitments to transact any business. We have three charging points:

  1. Planning fee (for new clients) – this is an hourly rate to produce your financial plan and costs £150 per hour.
  2. Implementation fee – where we need to invest monies or switch monies from one provider to another we charge up to a maximum of 3% of the transaction. i.e. on a new investment portfolio of £100,000 we would charge £3,000 to “implement” the plan.
  3. Ongoing Advice Fee – This is charged at 1%pa of funds under management. For large portfolio clients, the price is on application depending on requirements and portfolio complexity.

Unlike some of our competitors, we have no exit charges or minimum contract periods. We want you to be happy with the service we provide and feel that our clients should want to stay with us based upon the ongoing service we provide, not a fear of incurring additional charges to leave.

In addition, we don’t charge for our first meeting, when we get to know each other and tell you exactly how much it will cost to produce a bespoke plan, which will be sourced from the “whole of market” before any client commits to working with us.

If you would like to arrange a free, no-obligation meeting or discuss our fees in more detail, give one of our friendly planners a call on 01539 725855.

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Financial Management Bureau Ltd is a limited company registered in England and Wales. Registered office: Shenstone House, Helsington, Kendal, Cumbria LA8 8AA. Registered number: 02089786