Fairstone is moving to a single charging structure with an ongoing advice fee of 80 basis points, as it looks to meet consumer duty requirements.
FT Adviser can reveal the adviser firm has moved away from its three-tier proposition to instead have one default service with one charging structure.
The service, called ‘ActivePlan’, will have an ongoing advice fee of 80 basis points.
This is a drop of 20 basis points against Fairstone’s previous top-tier ‘ActivePlan Plus’ service but an increase of 5 basis points when compared to the previous standard ‘ActivePlan’ service.
Fairstone said this move will ensure every client receives the same core level of service, and those with specific needs can receive additional features.
Matt Jeffrey, head of office and independent financial adviser at Fairstone, said: “With the ability to add on additional features such as a twice-yearly review, bespoke investment situations, lifetime cashflow planning or estate planning our services can truly be tailored to individual needs and adapted at every stage of their financial planning journey with us.”
Clients with less complex financial needs can use Fairstone’s fully remote advice service ‘Mineral’, which offers access to advice through digital channels.
Lee Hartley, chief executive at Fairstone, said the changes were part of the company's work to ensure it met its consumer duty obligations as well as a new strategic direction for the company, focused on simplicity and consistency.
Hartley said: “This is the first time we have updated our service offering in 15 years and clearly this initiative has required a significant amount of change, however, we are doing this from a position of strength.
“We know our streamlined proposition will mean we continue to provide the best service for our clients while meeting the requirements of consumer duty on an ongoing basis; and ensure less variability in our charging structure.”
Adviser raises concerns
But some advisers within the group have raised concerns about the changes.
One adviser who spoke to FT Adviser on condition of anonymity said under the new fee structure, some clients will now fall out of the bottom because they do not reach the minimum fee, instead they will move to transaction only.
Hartley admitted the firm did expect to see a transition of clients into Mineral - its digital advice service.
“This will allow our advisers to give their full-time attention to clients with more complex needs and ensure all our clients have a transitional service option,” he said.
“We continually segment our clients and asses the value of our services offer. Clients typically with lower asset values have fewer complex needs and will be better suited by our Mineral proposition.”
But the Fairstone adviser went on to say firms would lose some of their clients and the revenue from them, because they were no longer able to service them.
