I don’t know who designs your questionnaires, but yet again I find them leading the respondent.

For example the question on ‘Would you be better or worse off with adviser charging’.  In my case the true answer is  - absolutely no difference – it’s what I have done for some time. 

This leads to the nub of the issue. Why is everyone getting in such a tizzy?  There are two options. The provider produces a form for the adviser to send to the client – which states what the trail is and that the client now agrees that this is regarded as a fee paid by the provider to the adviser. Just like Skandia has done for years.

Alternatively the adviser writes to the client, explains the position and tells them they will now be directly charged – or if available can chose between this and the above – whichever suits them best.

Yes – I am aware that some advisers have built an income on penny numbers being paid from old life policies. I have no sympathy with this. They should have charged a one off  fee in the first place, arranged a nil commission contract and explained to the client how much they will save over the lifetime of the plan. 

I’m afraid that basically I suspect that many are in a funk about the removal of trail because their clients were never actually told what was being trousered. Yes I know there is a disclosure document. These details always appeared on the small print on the last page and were rarely read.  What the adviser should have done is to explain it exactly in his covering letter/report – which I know few if any did. 

In the same way I think that fund managers and platforms should write to clients annually not only providing a valuation but stating in exact monetary terms what has been charged for each individual client. What’s wrong with that?

What I do think is vital is that the providers who will now not be paying this trail should benefit the client accordingly. This regulatory ruling should not be a gift to the providers bottom line. 

Kind regards

Harry Katz

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