High investment charges, expensive pension fund fees and extortionate advisor fees are under the microscope of the Financial Conduct Authority (FCA) after a recent review, on the back of which a raft of new rules have been confirmed.
The FCA has warned financial firms that they must put themselves in the shoes of the customers before recommending any financial products. The level of care provided by financial firms was put in the spotlight after MPs used the Financial Services Act 2021 to require the FCA to consult on levels of care provided to consumers and customers.
As a result, from April 2023 when the Consumer Duty is published by the FCA, firms that put their own profits before customer’s needs will face fines and other penalties.
Exit fees paid by customers who choose to switch their investments to another provider were singled out as needing a much tougher approach. Craig Croft-Rayner, an independent financial advisor at LFBB says “This can’t happen soon enough. I see so many clients locked into poor performing investments who feel there is no escape due to ridiculous exit charges of up to 6% of the value of their portfolio.” He went on to say “In my view, all exit fees are unreasonable. It is a privilege, not a right, to manage my clients’ money and they should be allowed to leave without penalty”
Another target of the FCA is what it described as “opaque charging structures” where it is unclear exactly what a customer will pay, and fees are often layered or bundled together to make it difficult to decipher.
Here at LFBB Financial Services we pride ourselves in being absolutely clear on fees, we always make it clear exactly what a client will pay and what value they will receive in return. We never apply exit charges to any of our clients’ portfolios.
If you would like your existing investments reviewed, or you are considering investing a lump sum, get in touch with one of our independent financial advisors on 0114 272 9721 for a free consultation.