Over 90% of advisers change approach to charging

Over 90% of UK advisers have changed their approach to adviser charging in the last two years, according to Platforum.

The firm’s recent report, UK Adviser Market: Costs and Charges, said the most glaring trend is towards cutting charges for higher value clients and increasing them for those nearer the bottom end of the scale.

Over a quarter of firms increased their charges across the board for all clients. Another 40% of firms increased their fees for just their low value clients and reduced their fees for higher value clients in order to stay competitive.

According to the report, advisers see this rebalancing of charges as a way to ‘increase fairness and transparency’ in their pricing structure, which was the main driver for the change according to over half of firms. Regulatory change was the second most cited reason for altering their charges.

Higher regulatory costs are continuing to prompt advisers to take a long hard look at their approach to the basic economics of their businesses. They need to cover their costs, which have been rising, and so charges to clients are on the increase. However, advisers are mindful of the optics of their charges on larger portfolios, thanks to MiFID II 'pound and pence' cost disclosure.

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