Tax avoidance hots up
The past few years have seen HMRC strengthen its…
In the financial services industry there are 2 ways you can pay for advice. The first is to pay on a fee basis, as you would an accountant or a solicitor. The second is on a commission, where the cost of the advice is built into a product you are sold.
We work on a fee basis. We believe this is the only way that we can someone giving truly independent advice can work.
When you purchase a financial product, you will pay an amount in charges for each year you hold that policy. It is these charges that will be used to pay the commission for your advice. Despite what some people may tell you, this is not funded by the Life Company or bank, it is funded by you!
Although there are many honest advisers that give excellent advice through a commission basis, we see many examples where this has not been the case. Surely it canít be a coincidence that the investments that pay the highest commission get the highest levels of business. That is why we feel that you can only give truly independent advice if the fee that you charge does not vary with the type of contract recommended or the company chosen.
No. If we advise you to set up a policy that pays commission, that commission is yours to do what you want with. If you want to use that to pay our fee, as most of our clients do, then you can. If the company we recommend pays a high commission, then you can even have some of that money back! Itís yours.
We understand the benefits of paying by direct fees versus using commission to offset our fee, both from a tax perspective, and from a cash flow perspective. The Implementation Fee Strategy© is specifically designed to build you your own optimised payment strategy. We will ensure that you pay for our advice in the most cost effective and tax efficient manner.
If your adviser is working on a fee basis, he can advise you on areas that donít pay commissions; areas that tend to be ignored by many. Examples of such areas are Trusts, Wills, Alternative Investments, Investment in property, and savings products.