Do You Pay Fees To Your Financial Adviser?

April 26th, 2010

One of the common questions asked of a Financial Adviser is, “How do you get paid?”

In the past there has been a division between fees only, and fees for investment advice only, and commissions based advice. The Governments of the UK, and Australia have in the past 2 weeks announced an intention to ban commission for investment advice. Today New Zealand’s own ISI an organisation representing some of the investment companies have announced they are going to introduce a voluntary ban on investment commissions.

What does this mean for you the consumer? It means that you will pay more for advice than you currently do. Probably a lot more. But the Governments of the world, and the well paid consultants believe that commissions lead to bad advice. In some cases there is no doubt of this. But for the average KiwiSaver consumer, I have my doubts.

But my doubts are of no use to you or me. Commissions will be banned on investments and fees for service will be set up. And you, dear consumer, will pay or suffer without the benefit of good advice.

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