Better qualified advisers and a change in the way you pay for advice

Dec. 9, 2011 - PRLog -- The world of independent financial advice is undergoing a big reform, which will see advisers required to become better qualified and to change the way they charge for their services.

As part of the Retail Distribution Review, from the end of 2012 advisers will be required to reach a new qualification level known as QCF 4. This may involve him or her taking more exams or undergoing an assessment by an accredited body to test their knowledge. Alternatively, your adviser may have already reached this level but besides this, advisers are undergoing a ‘gap-filling’ exercise to ensure their knowledge is up to date in all areas.

The regulator, the Financial Services Authority is also planning to ban commission payments from insurance and fund management companies to remove any perception of bias from an adviser’s recommendations - though commission will still be paid on certain types of insurance products.  

A new system called ‘adviser charging’ is being introduced from January 2013, which will see advisers agree their charges with you at the outset, including what services you receive for what you are paying. This charge can be paid for out of the product you are buying which could for example take the form of one upfront charge and then a smaller ongoing charge for future service. The charges may reflect the amount of time your adviser has spent with you developing your financial planning and product needs or may represent a percentage of the funds you are investing or keep invested, or may be a combination of these.

The premise of the reform is that you and your adviser are much better informed about what it is you are paying for. If you have any concerns about these payment changes, please get in touch to discuss the issue in greater detail.


Paul Dixon
Chartered Financial Planner

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Census Financial Planning is an independent financial planning practice providing a professional and comprehensive financial planning service, located on the Lisburn Road in Belfast, Northern Ireland.