There is always room for improvement but one key area the profession could focus on is transparency with fees, according to Jonathon Clarke, managing director at Clarke and Co.
Speaking to FTAdviser as part of our Coffee Corner series, Clarke said in line with regulation, fees should be better documented to prevent people being surprised about the amount of fees they have to pay.
How do you think the industry can do this?
He explained clients often go from the initial advice to the implementation when they have been given the report.
“It has to be clear from the fee agreement. At Clarke and Co initial advice is a fixed fee. A percentage fee makes it hard to gauge how much a person is paying so there should be a fixed fee for initial advice to ensure there are no concerns.
“That’s what the fee for the advice is and there are no surprises.”
Clarke said this is an area he believes the industry is still not up to speed with, with lots still charging percentages for initial advice.
How did you start out as an adviser?
Clarke said after graduating from university, he went to work as an estate agent to earn money to go travelling.
He said he got into the profession due to the mortgage advice aspect of the industry.
“At the time someone advised about financial advising. They said do mortgage advice first because if you are unable to give advice and communicate with people, then there's no point in going into financial advice,” he said.
Clarke went on to sit the financial exams and joined Abbey National bank, Santander, where he received training for independent financial advice work.
“After the bank, I went to work for a small local IFA and then joined a larger IFA practice. I later went to an accountancy practice, and then went to the firm I was at previously before setting up on my own,” he said.
“It's been a journey. I never set out from day one to be a financial adviser.”
Did you ever end up travelling then?
“No, I never did, “ he laughed.
“It's one of those things, once you start the exams, you just keep going.”
What would you say has been the biggest change in financial services?
“It’s a lot more professional in terms of everyone striving to get the chartered qualification,” he said.
“It's more about advice now, and not as much about just selling plans or products, which when I joined the bank, that's all you could advise on,” he said.
“You could see change coming with RDR and now with consumer duty. That's another positive step for the industry.”
Clarke explained that now, it is a lot more about relationships and the service being provided to the end client.
“That's how I ended up doing what I'm doing now,” he said.
“When you work for banks or larger practices it’s about bonuses and new money targets so client relationships aren't really the focus if you're wanting to earn money.
“That might have changed now.”
