Polarised opinions focused on the benefits of fees and commission risk damaging the industry and consumers, according to Cofunds's Alistair Conway.
The platform provider's director of marketing and proposition says extreme views on both sides are neglecting options in the middle ground.
Speaking at a debate in London today, Conway says the financial services industry is getting caught up in an unnecessary debate over the benefits of fees versus commission, rather than looking at how consumers want to pay for financial products and advice.
He says customers often think commission is better simply because they do not realise they are paying for the commission costs over the lifespan of their financial product.
"The main problem with commission is a lack of transparency," he explains, "as the customer is still paying for the advice eventually.
"The benefit of commission is people often don't like writing out big cheques for hundreds or even thousands of pounds."
Conway says the industry needs to look at ways to help customers pay for their advice, which are transparent and flexible.
"Provided a customer is aware of the costs and agrees to them, why not charge 50 basis points from their product each year?"
Bruce Wilson, managing director of Helm Godfrey, agrees advice won't always need to be paid for upfront following the RDR, but believes technology needs to be in place to enable clients to pay in other ways.
"Some types of investment aren't geared up to be able to pay for advice in this way. A charge can always be added to a wrap platform instead, but we need to make sure wraps are up to scratch for this to become possible," he says.
Conway hopes the industry and the regulator can consider the needs of consumers to ensure people are not putting off making financial provisions in the future.
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