Which? calls for greater IFA fee transparency

New Which? research reveals that independent financial advisers (IFAs) are not being up-front with potential customers over what they could expect to be charged for advice.

We analysed the websites of 500 UK IFA firms and found more than two-thirds (349 firms) didn’t publish their fees and charges online, giving customers no advance indication of what they could be charged.

We want all IFAs to disclose charging structures on their sites so customers know up-front what services are likely to cost and can shop around. IFAs are required to give prices to clients before an agreement is reached, but this usually happens at the introductory meeting. We believe customers should have an indication of what they will pay before committing to meet advisers face-to-face, where they could face a full sales pitch.

The Financial Conduct Authority (FCA) currently states that it is ‘best practice’ for IFAs to display fees online, but we are calling for the regulator to look at whether it should be mandatory for IFAs to display fees on their websites.

Our research also found:

  • Nearly a quarter of sites (115) we looked at purported to show their fees, but most of these (76%) don’t give enough detail to give a real indication of what you would pay. Many sites use these pages as an advert for face-to-face meetings.
  • Just 2% of the sites we looked at publish genuinely useful information for clients including a clear breakdown of charges.
  • Just 33 sites allowed us to download a ‘Key Facts document’ and of these 25 didn’t have a suitably detailed fees page or had no fees pages at all.
  • When we contacted IFAs nearly a third (31%) provided a rough idea of fees when contacted by potential customers, but one in 10 (12%) refused to divulge costs even during an initial telephone enquiry.

Which? executive director, Richard Lloyd said:

“Paying for financial advice could be one of the best investments people can make, especially if they are taking advantage of the new pension freedoms, but a lack of transparency on fees could put them off at the first hurdle.

“Good IFAs have nothing to fear by publishing fees online and we believe that if some firms can do it, then the others have no excuses. We need IFAs to be much more open about charges or the regulator should step in and change the rules.”

Notes to Editors

  1. We analysed the websites of 500 financial advice firms across the UK to see if they displayed the fees a client could expect to be charged for their services. We weren’t looking for a comprehensive list of charges, merely some indication of what clients could expect to pay when seeking financial advice, while websites that clearly displayed their fees or used illustrative examples were noted as the ‘best.’
  1. We also questioned 206 IFAs in August 2015 about how much they charge for a number of typical investment scenarios. We found prices varied enormously – for example when we asked how much it would cost to get advice on taking a 25% lump sum from a £150,000 pension pot and invest the rest into an income drawdown plan, the average cost was £2,516 or equivalent to around 1.7% of the total pension. The highest amount we were quoted was £7,000 – around 4.7% of the total pot and around 15% of IFAs quoted more than £4,000.

A summary of our research is here:

IFA summary


  1. Which? tips for anyone looking to employ an IFA:
  • Finding out fees and charges may not be as easy as it should be, but you need to shop around and gather quotes from a number of local firms to get an indication of how much you can expect to pay.
  • Meet each adviser before making any firm decisions and check they are qualified to the correct level.
  • Don’t feel pressured into agreeing anything unless you’re happy with the adviser.
  • Under the terms of 2013’s Retail Distribution Review, payment for advice must be agreed between you and the IFA before any advice is given.
  • Make sure you understand any payment method you agree to, and are clear about ongoing charges.
  • IFAs are regulated by the Financial Conduct Authority so if you are unhappy with the service you received, complain to the IFA in the first instance. If your issue is not resolved after eight weeks, you can contact the Financial Ombudsman Service for an independent investigation of your case.





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