As clients are increasingly looking for value for money from their adviser head of training at the Association of Investment Companies (AIC), Jacqueline Lockie, has set down seven key questions IFAs should have an answer for.
The questions are aimed to help consumers, who are looking for advice or may be changing their current adviser, identify whether the fee they pay their adviser is justified by the service they receive in return.
The tips were drawn up as part of Financial Planning Week due to start on 24 November.
Lockie (pictured) said: "I think now that all clients know they are paying for advice, the question then becomes 'How do I know I'm getting value from my adviser?' The answer isn't necessarily as straightforward as you might think - there are a number of important questions investors ought to be asking."
Seven key 'value for money' questions from clients
These are the questions your clients may be asking you:
1) What's the fee structure? How much do you charge, and is it per hour, a flat fee per job, or a percentage of my assets?
2) If charging as a percentage of my assets, does that include all assets e.g. cash and other assets you don't actively manage?
3) What savings does your financial planning make me? - e.g. income tax or Capital Gains Tax.
4) What's your perspective on the performance of my funds over the last twelve months compared with sector averages?
5) How can I contact you, how often, and in what form? Can I just phone you up out of the blue - what service is included in my fee?
6) How will you demonstrate my progress towards my objectives? Will you compare a year's plan with a previous year's plan? How will you explain it all to me?
7) What types of products do you currently recommend and why?
Clients should also observe advisers' conduct during meetings, Lockie suggested, and look at who does most of the talking.
"A long term relationship is a balance but it should be the client saying how they feel and what they aspire to achieve and the adviser explaining how they are going to get them there," she said.
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