Consumers savvy about advice fees

Pressure on advisers

By Madeleine Collins
Wed 10 Oct 2007

Clients willing to fork out for advice but expect more from planners.

Investors want transparency on advice fees and expect more accountability from their financial planners for the recommendations they make.

Fresh data from research house Nielsen commissioned by ING Australia found clients are willing to pay for quality advice.

However, they expect advisers to clearly articulate their value and fee structure.

The survey of 700 consumers and 300 advisers in June and July 2007 revealed no preference for payments based on fee for service, commissions or a mix of both.

Eighteen per cent of consumers favoured commissions, while another 18 preferred a mix of fee and commission. Twenty per cent had no preference.

Seventy one per cent of surveyed consumers considered fee transparency very important.

"The debate is not about fee for service versus commission. It's about the provision of quality advice and the overall outcome," ING executive director of sales and marketing Dan Powell said.

Only 12 per cent of consumers said they would recommend an adviser if they have not been contacted in the past 12 months.

The percentage of people satisfied with their planner grew to 90 per cent up from 80 per cent in 2006.

Consumer lobby group Choice has called for the removal of trail commissions from investment products.

A study of 1350 financial planners by research house Brandmanagement found that over 40 per cent said their clients were asking more questions about fees and charges.

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