How are Financial Advisory Fees Charged in the UK?
The advisors' fees are based on the scope of services provide by them. Generally speaking, the services are divided in two ways – advisory and sale of financial products. The fees taken for advisory services are based on hours spent researching and consulting while the commission is received from financial companies based on quantity or amounts of sale of financial products like insurance policies and debt products.
So How Much Do Financial Advisors Charge?
IFA fees usually vary from £40 to £400 per hour, depending on the niche they have developed in the market. On the other side, clients are becoming well updated on the results of financial advisors these days with use of online reviews and finance websites. A mistake in advising here and there can ruin the career of the IFA. Because of this, the better reviewed and profitable advisors will normally be on the high end of the pay scale. Most important is that you get return on your investment when hiring a financial advisor and this is why Compare the Financial Markets only works with credible and experienced financial advisors.
What are the New Regulations by the FSA on IFA Fees?
FSA has understood that this is the time to raise the transparency and quality of IFA services and therefore has made strict rules of financial advisory fees beginning in 2013. This move will help regulate IFAs, ensuring that clients are fully aware of the services they are being charged for. How much do financial advisors charge? We can now easily find out.
The regulations distinguish between fee and commission and also restrict commission income in certain situations which can result into biased financial services. Not only do clients benefit in terms of reduction of fees, but also IFA as a profession will gain public trust from these regulations.