You may not be aware that there is a drive by the FSA to get IFAs to charge fees properly and move away from old style commissions. The reason for this being that most bad advice has occurred by advisers selling products in order to be paid and some products and insurance companies can pay far more than another for exactly the same thing.

As I set the firm up on a fee basis 10 years ago, we still seem to be ahead of the majority of IFAs who still seem to operate on commission terms and have business models that rely upon high upfront remuneration. I have sympathy for those that are trying to change to something more like our model – where I believe our clients (customers if you are the FSA) are treated fairly. The journey is long and in our 10 years to date I have never found a short-cut that was worth pursuing.

The industry press has been covering the proposed changes for significant time now. In this weeks Money Marketing quotes Gareth Marr as saying “Large networks and nationals have business models that are so based on commission that the cost of converting will decimate their economic model and lead to a wipeout of the IFA community”.

I fully accept that the change will be difficult, but I have spent the last 10 years building a firm that treats clients fairly and ethically. We charge fees and for sure, not everyone can afford our services. It has been a long hard slog to grow the business . However just because something is difficult does not mean that it shouldn’t be attempted. We aren’t talking about going to the Moon, we’re talking about a fairer way to charge clients.

For sure the implications for the industry are significant. For starters, how to attract and retain staff is an issue. All our staff are employed and at present salaries have very little connection to personal targets as our emphasis is on service, which we live or die by.

The world is changing, a sense of ethics is long overdue in many aspects of commerce. We all know that the key word is “sustainable” yet we seem unable as a society to fully embrace the implications which I heard recenlty described as “creative destruction” a rethinking of not just how business is transacted, but why.

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