Questions on Hargreaves Lansdown's remuneration structure, provider switching times and an IHT warning - here's our weekly heads-up on the financial stories that may have caught your clients' attention over the weekend …
Hargreaves Lansdown advisers double their money if they sell more to clients
Hargreaves Lansdown (HL) advisers can more than double their annual salary through a bonus that is directly linked to how much cash they draw in from customers, The Sunday Times reports this weekend.
The 90 full-time advisers working at HL are paid a basic salary of £55,000 a year on average, but can earn as much as £58,000 on top of that in the form of a bonus if their customers generate extra fees for the firm by buying more products and investing more money.
The Sunday Times says the issue of bonuses for financial advisers raises fresh questions about whether investors receive the best service if their advisers' pay is - even partly - contingent on hitting sales targets.
A spokesperson for HL tells the paper: "We have a first-class team of expert financial advisers who put their clients first, and we have all the necessary monitoring and controls in place. Our fees are highly competitive, clear and simple: we offer a free initial consultation and clients only pay fees for the advice they need. We are one of the few adviser firms that publish a fee structure on our website."
Revealed: The pension firms that will take months to release your savings
This piece in The Daily Telegraph reveals changing pension providers can take anywhere from 12 days to more than two months.
The paper reports findings from PensionBee, which ranks Aviva as the top performing firm, taking an average of 12 days to transfer a pension fund.
This compares with worst-ranked Mercer, which, according to PensionBee, takes 62 days. Now Pensions, Capita and Willis Towers Watson are also ranked poorly, taking an average of 61, 45 and 42 days respectively.
Mercer tells The Telegraph it attributes its lengthy transfer process to its defined benefit transfers, which were "subject to greater checks to limit the risk of savers falling victim to scams."
How to reduce inheritance tax: ‘Word of warning' issued on utilising IHT exemption
A warning has been issued to those who are looking to reduce their inheritance tax (IHT) liabilities via leaving their entire estate to a spouse or civil partner, reports the Daily Express.
The standard IHT rate is 40%, which may apply on the value of an estate which is greater than the £325,000 threshold. However, there are ways for people to increase this threshold.
Haines Watts tax partner Jonathan Scott says transfers between spouses and/or civil partners are exempt from IHT, however, this does not mean IHT will never be payable on the estate.
The tax specialist explains: "Word of warning - this sounds highly advantageous, but it is only a tax deferral. When your surviving spouse or civil partner passes away, their estate will become taxable (to the extent it exceeds the nil rate band)."
Our weekly heads-up for advisers
The Financial Services Compensation Scheme (FSCS) declared 11 adviser firms in default between 1 August and 31 October.