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Price or Value. Which is more important, Which?

“A cynic is a man who knows the price of everything, and the value of nothing” Oscar Wilde

Phil Bray sparked a bit of chat on Twitter Saturday morning (yes, I know, we really should all have had better things to do).

It seems Which? have called for advisers to publicise fees on our web sites. Phil asked what we thought of this.

Which? suggested that we give “customers no advance indication of what they could be charged” and that we just want to get them into our office “where they could face a full sales pitch.”

My initial answer was that as we have variable rates for different staff I think putting fees on our site would not be helpful to a potential client. We’ll happily give an estimate of fees, but only when we’ve met. That’s why the first meeting is free. One person’s ‘sales pitch’ is another person’s ‘getting to know each other before we decide if we want to work together’.

I think there is a wider issue here, however. I would suggest Which? should be less worried about how much the service will cost, and more concerned with helping people choose the right service for them.

And I’m not referring to independent/restricted. Whether clients care about that distinction is for another day. I’m talking about financial advice that is suitable to their financial position and their personality.

How can I get financial advice? Let me count the ways:

  1. Money Advice Service

  2. Mate down the pub

  3. Family member, perhaps parents

  4. Own research

  5. Best Buy lists

  6. Press

  7. Pension Wise

  8. Social Media

There may be others. In addition to such non regulated advice, we have the adviser community offering different services

  1. Advice (recommending a product)

  2. Planning (plotting a path to achieve objectives then Advice)

  3. Coaching (understanding objectives before Planning then Advice)

Which one or more of these suits an individual’s circumstances and needs is inevitably going to vary. Someone with time and a bit of knowledge won’t need an adviser at all.

Someone with a clear idea of their future but no financial knowledge or spare time might need an adviser. They might use a planner to see how realistic their dreams are.

A person unsure of the future might use an adviser firm which will help them understand themselves better before moving onto planning.

The point here is that the fees and costs associated with each approach comes second to the type of help that is needed. I’m not saying cost isn’t important, but that a focus on cost alone is to miss the main point.

My concern with Which? calling for the FCA to make fees on websites mandatory (as well as some of the language they use) is more likely to put people off seeking advice at all.

I’d suggest Which? would be serving their customers better by recommending they get a clear understanding of what style of advice is going to add most value for them, seek an appropriate source and THEN worry about the cost. How that cost is shown and the various issues Phil will cover.

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