One in six (16%) advice firms expect the Consumer Duty value for money rules to lead to an increase in the total charges that clients pay, a new study has indicated.

A survery of advisers by Copia Capital Management found that 38% believe they will have no impact, while more than a fifth (22%) are expecting to see a reduction in some or all fees.

Copia’s poll of 116 advisers was part of a webinar on the value for money assessment requirement of Consumer Duty with the firm’s managing director, Robert Vaudry, and the lang cat’s consulting director, Mike Barrett.

The findings revealed considerable change in adviser sentiment since the lang cat asked the same question as part of research it undertook last October. Back then, 64% thought the rules would have no impact, 18% thought they would lead to a reduction in some or all fees, while just 2% expected an increase in overall charges.

During the webinar, Vaudry confirmed that the poll’s findings tally with his own conversations with advice firms, and said: “In recent meetings with advisers, several firms currently charging clients less than 1% say they are now considering putting their fees up – either increasing the absolute fee or raising the asset thresholds where fees decrease.

“This may have been something they were thinking about anyway to reflect the rising cost of living, but we’re also hearing that through the requirements of Consumer Duty firms have a better understanding of the cost of the services they provide and the value they are delivering for clients, giving them an opportunity to re-evaluate their charges. As a result, I think we could see the cost of advice increase marginally.”

Barrett also reminded advisers to consider the needs of each client and added: “Almost certainly someone with £3m to invest will have more complexity from a planning and investment management point of view than someone with £30,000.

“However, just charging a blanket percentage without considering the client need, especially if you have very high net worth clients, will be poor practice. There is likely to come a point where the Consumer Duty assessment process will shine a light on the cost of delivering these services.

“You might need to cap your fees for high-net-worth clients, while at the other end of the scale, you could find that those with lower assets just aren’t going to get good value for money from the fees you need to charge.”

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