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Are Banks Guardians of Financial Advice?
Things have been shaken now and even investment advice is something that customers will have to pay for. Even top notch banks will impose huge fees which can eat up a large part of the money you invest. Even the biggest names are charging 3pc according to some firms. Most banks shall levy the already existing charges.
These so called guardians will charge solely for advice and won’t even include the basic product costs or investment charges. Customers must be aware that even though they might opt for this advice, high end banks don’t have such a wide range of funds for investment. In most cases, the client is made an offer of the guardian’s own funds.
The rules of the game have changes. Those selling can’t make money off the those who provide the product. Advisers will need to charge a fee on the face or agree with the client beforehand.
Guardian bias needs to be removed and the entire process needs to be made transparent. Clients should get to see what they are being charged for. Even though the huge fees exist, most banks have a narrow offerings in term investments funds. Even the guardians of financial advice, recommend something called funds of funds.
Here clients have all risks well assessed. A score shall predict which set of funds need to be invested in. But a fee is paid to a manager who monitors these very portfolios and make changes whenever required. Some banks have suspended their advice giving schemes because there were concerns over there suitability.
Most guardians don’t want to come out with a planning structure. Most advisers want to charge less and have a bigger range of services. An effort to switch over to Internet execution services is being made. Such charges don’t take a competitive shape. Banks want to make sure services come in wherein the customer need not pay upfront and will pay 1.25pc as an on-going fee, though there will be a yearly review and with charges for the platform.
Banks want to fees for the transactions when switching occurs or newer investments are being made. The top charges fixate well with the current standards of the industry but whether they show the true value depends entirely on the guardian’s advice given under an independent.