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[ ADVICE ]
A set or hourly rate for financial
advice appears to have numerous
advantages for clients over
traditional percentage-based
models. So, asks Anthony Luzio,
why do so many investors persist
with the latter option?
Set & match
A
n oft-repeated myth about
the impact of the Retail
Distribution Review (RDR)
since its inception in
2013 is that it made it uneconomical
for financial advisers to offer their
services to anyone with a portfolio of
less than £250,000.
Yet this ignores those firms offering
advice for a flat or hourly rate, rather
than taking a percentage of the value
of the portfolio.
However, while a flat fee means that
in theory anyone can obtain financial
advice, Fowler Drew’s managing
director Stuart Fowler says the biggest
beneficiaries of flat fees are likely to
be the wealthiest clients.
“They are otherwise subsidising those
with small sums to invest who may
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