From financial advice fees to credit card charges, these are the stories that caught our eye this week.
Money Marketing: Contingent charging can only lead to bad advice
Money Marketing published a piece by Clive Waller on contingent charging. Waller raises the issue that contingent charging on pension transfers means that a transfer is in the adviser’s interests. With high fees, he questioned whether the potential for bias could lead to consumers receiving poor advice.
LowerMyCharges’ take: A controversial article by Clive Waller, but with more than a grain of truth. The practice of contingent charging is open to abuse and because of this there’s a real risk that it’s not in a client’s best interests.
Pensions Age: Savers access £3.2bn from pension pots without advice
Following a study by SAGA, Pensions Age looked at the news that £3.2 billion worth of pensions savings has been accessed without financial advice. In the survey of 2000 adults, only 20% said that they would consider financial advice before using pensions freedoms to access their pension savings.
LowerMyCharges’ take: There still remains an awful lot of people accessing their pension pots without really understanding pensions freedoms and without taking advice. Our advice is to get financial advice and make sure you understand the short and long term impacts of your decisions.
Financial Times: Where millennials turn for financial advice
The Financial Times looked at how younger investors view the industry. The article explains the issue of younger people often struggling to afford traditional advice charging models, as well as the industry’s tendency to prioritise those with larger sums to invest. Written by the author of the Young Money blog, the article explained that young people are increasingly turning to financial apps for advice.
LowerMyCharges’ take: Not surprisingly, millennials look to digital platforms and apps for financial advice as traditional IFA models don’t fit their needs.
This is Money: Borrowers racked up £219m in fees last year with mistakes including cash withdrawals, gambling on plastic, and buying currency
This is Money reported on research from Moneycomms, which found that £219 million of credit card fees and charges were incurred last year. It’s thought that many credit card holders will have used their card for cash withdrawals, which usually entails a charge and a higher interest fee than other spending.
LowerMyCharges’ take: Be careful not to incur unnecessary costs when using your credit card, they can be very expensive.
Lowermycharges.com is a trading name of lower my charges ltd which is an appointed representative of the Wealth Management Group LLP, which is authorised and regulated by the Financial Conduct Authority. FCA number 816339.