Significant changes in the financial services industry came into play at midnight on 31 December 2012.  These changes meant that financial advisors are now required to be much clearer in the detail of how their services are paid for.  The days of hidden commissions and surprise, unclear charging structures are now thankfully gone.

What this has meant is that when a financial advisor sells or recommends a financial product to a client they are required to make sure that the client understands clearly how much the product or service will cost them, both in the short and the long term.  This change has to a certain extent driven some of the more unscrupulous advisors out of the industry, because they are either not prepared to disclose clearly their charges or they have no desire to do so.

In many ways this change means that the professional advisors who have always traded in this open and upfront fashion are more in demand and that the consumer gets a better deal.  However, one of the downsides is that financial advisors are thinner on the ground than they were previously, when there were more rich pickings to be had.  The new rules are designed so that the consumer knows:

  1. Whether the advisor they’re dealing with is independent or tied.
  2. Exactly how much their investment or contract will cost them in the short and the long term.
  3. That the advisor they’re dealing with is qualified and is of appropriate professional standing.

The days of advisors receiving initial and ongoing commission without providing any form of ongoing service are over.  Under the new rules, advisors will be paid for the service they provide and the amount and frequency of that payment will be declared and agreed with the consumer before they sign the contract.  This is all great news for the consumer, but in reality it also means that access to quality financial advice is being geared by many companies towards wealthier clients.

Barclays, for example, have recently announced that they will no longer offer investment advice to customers who have less than £100,000 to invest.  Having already turned their back on their High Street customers, saying that they would no longer have access to financial advice, this really does beg the question as to whether financial advice is becoming elitist?

At Provisio, we believe that financial advice should be accessible to all and that’s why we’ve made the strategic decision not to set a minimum fund level.  Because we have always worked on the basis that fees are based on value for money, this new regulation affects us less than most.  The great news about this from our clients’ point of view is that with Provisio, financial advice is open to all.

If you are looking for a professional financial advisor you can trust and who speaks your language, you’re in the right place.  Why not get in touch today for a completely no-obligation discussion?