More than half of financial advisers believe that commission-based advice would be of benefit to those who cannot afford fees, according to a survey by HSP Consulting.
The LinkedIn survey, which was sent to 450 IFAs and senior financial services professionals in July, found that 38 per cent of respondents think a commission-based model would “definitely” be beneficial.
In addition, a further 25 per cent said it would be “somewhat” beneficial, while 38 per cent said it would of not benefit at all.
Felix Milton, chartered financial planner at Philip J Milton & Co, said: “The results show that there is a clear preference for the benefits of receiving advice.
“I certainly think it is of benefit, so long as the fees paid are no greater than that which they would pay if it was not facilitated by commission.”
Milton explained that financial advice is valuable and those with lower assets arguably have a greater need as the impact an adviser could have is likely to be more valuable in overall terms.
“Alternatives could be payment plans where clients pay a set amount over a number of months perhaps,” he said.
Meanwhile, Tim Morris, IFA at Russell & Co Financial Advisers, said: “Other than more affluent clients and business owners, most clients still want to pay their fee from their investment/pension.
“So, if fully disclosed, I don't see much of a difference between that and commission.”
He argued that in fact, there are advantages to the commission-based approach if it's structured in a similar manner to advice firms such as St James’s Place - albeit they aren't charging a commission.
sonia.rach@ft.com
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