Why Financial Planning and Investment Advice should only be taken on a fee paying basis.

Almost all so-called financial advisers earn their living from the commission generated by the transactions they arrange for clients. This means that, in reality, they are just financial salesmen, not genuine advisers. In consequence it matters little if they represent just one insurance or investment company or if they claim to be an “independent financial adviser.” At the end of the day, they have to sell you an investment or insurance product to make their living so they are only “independent” in that they can choose between different commission paying alternatives.

So what happens if the best advice is “.....do nothing?” Or when the steps you should be considering do not give rise to a commission? For example, sound financial planning advice will include recommendations to invest in building society accounts and National Savings, neither of which will generate any commission.

The truth is that commission remunerated advisers cannot advise you on such matters and still make a living - they have to sell you something! So as you can see, there is a great deal of difference between selling financial services and providing a professional, impartial advisory service.

The deficiencies of the commission system are:

• Contrary to popular belief, paying a fee for advice is generally cheaper than the commission related charges you would otherwise suffer.
• Commission rewarded advisers are not paid to advise you about financial matters in the broadest sense (such as tax planning) but are paid for selling you a product - which may of course affect your tax affairs.
• Commission rewarded advisers are not paid to look after your affairs on an on-going basis. Their reward comes at the front end, in as far as they earn a one-off commission at outset and must then search for a new client to earn their next payment. Unless you hold out the prospect of buying something else, you may not see your “adviser” again for some considerable time.

Hopefully you will now understand how a fee-based system takes away the worries of high unjustified charges and uncertain results and makes the whole experience of taking professional advice so much more comfortable and transparent.

If your adviser is clear that he/she will still be paid for their valuable advice, they do not need to confine their recommendations to products which pay commission. Instead they can advise you on a wide range of financial issues, resolve problems, help with matters of taxation and inevitably have a positive effect on your financial position.

Only then will you feel comfortable that you are both on the same team, working with the same agenda, towards the same objectives - YOUR OBJECTIVES.

As you will have gathered, we work on a fee basis like accountants and solicitors, crediting all commissions (if they arise) to our clients. We are always happy to provide estimates for initial and ongoing work and will always provide an initial meeting without any charge or obligation, to see how we might work together.

This approach allows us to consider any form of investment or financial planning strategy - how many times have you heard a financial adviser suggest that you REDUCE your life assurance or LEAVE your money in the building society? Our clients are familiar with both of these strategies.

Our service is about financial planning in its widest and most professional sense. Our recommendations have no relationship to the ability to earn commissions and are thus genuinely impartial.

Notwithstanding the interest in fee-based advice as a concept, there seems to be a resistance in some quarters to paying more than a nominal charge for financial advice. The myth continues that so called “free advice” is still acceptable even though your financial decisions may be some of the most important you will ever make.

The brutal fact is, that financial and investment advice has to be paid for in some way or another. If the adviser is not properly remunerated, the advice given is almost certain to be rudimentary and in the worst case, inaccurate.

Many of our clients have experienced this so called “free advice” in the past and some, with the benefit of hindsight, consider it to have been the most expensive mistake of their lives.

All our clients, have come to realise, that if you want professional advice, from well qualified experts, that will help you to achieve your objectives, you have to pay for it - THERE IS NO SUCH THING AS A FREE LUNCH!

• Our approach to Fees
• Our Fee Guarantee
• Our Commitments
• What is a Certified Financial Planner^CM
• The Institute of Financial Planning

No investment decision should be taken based on the content of this website. Always take full individual advice first, the regulations governing tax rates and investments may change in the future.

CFP^CM and CERTIFIED FINANCIAL PLANNER^CM are Certification Marks owned by Financial Planning Standards Board Ltd. Institute of Financial Planning is the sole licensing authority for the marks in the United Kingdom, through agreement with FPSB.

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Tony Barber Financial Ltd is an Appointed Representative of Financial Ltd which is Authorised and Regulated by the Financial Services Authority.
Company Registration Number - 5102278. FSA Number - 464539
Registered Office: Corner House, High Street, St Dogmaels, Cardigan, Pembrokeshire, SA43 3EQ