Advisers are taking opposing stances on whether to cut charges for their clients as they react to the tough market climate.
Surrey-based Informed Choice says it reduced its fee from November after recognising the potential impact the economic turmoil could have on new clients seeking financial advice. The firm has also offered the choice of paying the initial fee in 12 monthly installments.
"It is not going to affect our bottom line at all, we just think it is a sensible move at the moment," Informed Choice joint managing director Martin Bamford says.
"We have to be considerate and responsible, and try to ease the burden a little."
However, Financial Escape's Phil Castle says the minimum fee at his firm is expected to be increased following a review over the Christmas period.
"We are rushed off our feet at the moment," he says. "We are increasing business, so we are more likely to put our fees up."
Clancy's Financial Planning principal Jim Clancy argues Informed Choice's move has "commoditised fee-based advice".
"I would say most advisers are charging more at the moment, I know we are finding twice as much work," Clancy says.
"What you have to do is demonstrate the value of your service. Ask a solicitor or an accountant whether they are dropping their fees and I would think not."
Castle adds all adviser firms should be looking to raise fees now to meet an "inevitable" FSCS burden firms may face in years to come to pay for the bail-outs of Bradford & Bingley and Northern Rock.
However, while Castle and Clancy have seen an increase in client interest in recent months, a new survey of UK advisers has found business volumes are expected to be still in the red in 12 months time.
Last week's Fidelity FundsNetwork Adviser Sentiment Index revealed business volumes will remain in the negative in 2009, despite expectations three months ago of a turnaround by September next year.
The quarterly report showed advisers recorded an average -1.11 slump in business levels in September, which then fell to -1.53 this month.
"The first findings reveal an interesting snapshot of how the credit crunch and current economic situation in the UK may or may not be affecting advisers," FundsNetwork head David Dalton-Brown says.
"Part of the analysis was completed before the recent market turmoil and one three months later, so it is interesting to see how the index has already changed."IFAonline
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