The challenge of firms offering widely different pricing to different customers exposes the limits of the recent drive towards fee transparency.
It has emphasised the need for individuals to see fully the fees they are paying, but not provided guidance on how their fee schedule sits relative to others in the same position.
This move to create standardised pricing, with clearly segmented client bases is one that much of the financial planning industry embraced in the years running up to the Retail Distribution Review.
Many readers will know the challenge it posed to bring this alignment without compromising the profitability of their businesses.
It requires tough conversations.
Sometimes in order to harmonise pricing, fees have to go up as well as down.
However, much of the financial planning community has made this change – working hard to demonstrate the value they add to clients in order to accomplish it.
It seems entirely reasonable that professional advisers require the DFMs they work with to show the same level of commitment to their clients and embrace the tough business decisions necessary to ensure that existing clients enjoy the same pricing structure as new clients.
Fairness demands it.
Charlie Parker is managing director at Albemarle Street Partners
