Why are IFAs so reluctant to charge on a fee basis?

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Recent research from IFA Promotion shows that 600,000 sensible people use one of the 52 white-labelled IFAP ‘find an IFA' search database. They are asked the question - how do you want to pay for the advice? Do you want an IFA who charges a) commission or fees or b) fees only?

The most recent figure shows that 20% ask for an IFA who charges on a fee-only basis. That’s a staggering 120,000 or more people every year seeking a fee-based IFA. I’ve heard that fee-only IFAs are receiving so many leads they do not need to put any effort into seeking new clients and, in fact, some turn clients away or refer them elsewhere. Do I believe this? Of course I do, as IFAP’s marketing director has told me only 2% of the circa 9,000 IFA member firms addresses registered on the IFAP database are fees only. I don’t think there’s anything wrong with commission while the provide...

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