I've campaigned for the last 10 years in Ireland for more transparency around the financial advice process and adviser charging in particular.
I've lost count of the number of times I've used the Upton Sinclair quote;
"It's difficult to get a man to understand something when his salary depends on his not understanding it" or "money is like a bar of soap, the more you handle it, the smaller it gets"
To rephrase Mark Twain; “good people do good things, bad people will do bad things. To get a good adviser to do bad things takes commissions”
I even produced a manifesto which set out the following objectives:
Professional Fees not commissions
In addition to establishing a specialist fee-only Financial Planning Consultancy Business myself, I set out to campaign for a simple, pro-consumer mission of the abolition of all commissions on all investment products.
Education
To campaign for higher professional standards than the current entry-level standard of the QFA and for grandfathering to be phased out.
To campaign for more relevant Continuing Professional Development content, to require advisers to pay for their seat at CPD events and to campaign for advisers to undertake more than the bare minimum of 15 hours CPD.
Ethics
“Integrity is doing the right thing even when no one is watching” CS Lewis
To campaign to improve the integrity of the Financial Services Industry
Financial Planning
To campaign for higher standards of technical proficiency and competence to provide Financial Planning rather than product sales.
Supporting Independence
Independent advisers in Ireland would be best supported by the formation of a network within which they could specialise and benefit from economies of scale.
I've also studied the evolution of the financial advice profession and the evolution of adviser charging and have first hand experience in the U.K. USA, Australia, South Africa.
I also commissioned a detailed analysis of the Irish VAT regulations from a tax expert in addition to making submissions to Revenue on the correct treatment of VAT on adviser charges.
This year I have reviewed and implemented EU regulations relating to MIFID II, PRIIPs, GDPR, the 4th AML directive and a host of business as usual issues including an office move.
I rarely use the word but in respect of this subject I would like to venture that I do, in fact, have some expertise.
Some observations in no particular order:
1. Adviser charges in Ireland are not out of line with the rest of the world
2. It is possible to obtain fee only consultancy. I work that way myself for specialist matters and expert witness. But these fees are subject to VAT.
3. Regulations are intended to protect consumers. They are not optional for advisers and compliance costs money. Describing regulations as red tape, tick box or form filing exercises doesn't change the fact that advisers must comply with regulations and that expense is passed on to the consumer.
4. Technology can assist advisers to be more productive. Around the world fees have started to come down as advisers adopt Fintech to improve their business processes.
5. As in all things this really comes down to a question of value for money. If an adviser is charging for a service, its incumbent upon them to demonstrate that they are delivering that service