Seven months after the implementation of the Retail Distribution Review (RDR), one adviser said he charges 70% more than he did under the old commission system as a result of the rule change.
Simon Kershaw, director of Wirral based Simon Kershaw Associates, said that RDR had forced him to up his charges, and that these pressures were likely to be being felt across the industry.
He said: "Many clients are being charged considerably more for the same work. In reality, these people are a lot worse off since RDR," he said.
"In the old days I would have charged 3% commission plus 0.5% for trail but now it's 4.5% plus 0.75 for administration. The difference is the result of the regulator and the perception of potential risk further down the track."
He added: "In general, advisers won't work for the sort of lower levels of income that we used to take on the chin.
"Although I do still look after old ladies with five or ten grand a year and cross subsidy, more commercially-minded organisations will have decided they can't make it work."
Kershaw added that he felt another big problem with the industry was that clients were being shoehorned into portfolios.
He said: "They expect independent advice, but actually end up answering 20 questions, and are then told they're a ‘six or a five and here's their solution'. They aren't even being put into good portfolios."
Kershaw said he also had a problem with the regulator not 'grandfathering'. He explained that he thought it was unfair that it had expected people in their late 50s and early 60s to take exams.
"These people were not a threat, the regulator should have phased in the qualification requirements."
Three years at Wells Fargo
Effective from 9 December 2019
One firm with permission suspensions left
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