Fee Only Advice
"It is unwise to pay too much, but it's worse to pay too little." John Ruskin (1819-1900)
There is a common misconception that financial advice is free.
At GoldCore Wealth Management we prefer to deliver advice on a professional fee-only basis, and this is why…
The Commission Basis:
The “commission basis” means that the broker:
• Will offer an apparently “free” initial consultation, without charge or commitment, at which he will start the fact-finding process and attempt to identify your financial needs and desires.
• Will give ostensibly “free” advice and recommendations, setting out the impact of charges and will show you the commission he would receive if you were to proceed through his agency
• Upon implementing and completion of the above, receive a commission paid to him by the provide of the product. Will usually receive a notional “renewal commission” for years to come (for investments, usually of the order of ½% pa of fund values), this is there for the advisor to provide ongoing service, unfortunately in our experience, often no ongoing service is provided or if it is, this is limited to an annual phone call asking if any further advice is required.
Tied Agents:
Another class of financial advisers is “tied agents”.
These salespeople represent the company that employs them and they can only recommend products from one provider. However something to be aware of is this advisor does not have to research to be aware of the rest of the market and are therefore rarely seen as a source of expert advice by discerning investors.
Commission Based Advice:
One of the main drawbacks we see time and time again is that for commission based advisors, recommendation of the best course of action or indeed inaction for the client may not earn the advisor any commission so may not be recommended. The most valuable advice might be associated with educating clients or helping them to meet their overall financial goals. Often this can be achieved without the sale of a product. An example might be providing solutions regarding estate planning where significant tax savings can be achieved without recourse to any product-based solutions.
We recognise that investor’s needs are varied and each investor might have a different level of understanding of financial products. Financial services companies have used their awareness of customer’s dislike of upfront commission charges to devise different methods of paying advisors which are more marketable.
Selling a commission earning product causes advice to be skewed, in terms of the strategy recommended, the product, the provider selection and sometimes in terms of the specific features of contracts established. In any recommendation to an investor the options presented should be drawn from the global market, the best of breed investments and these should be looked for outside the commission driven circle of products being offered to investors in Ireland and elsewhere.
Professional Fee Only Advice
We believe that advice provided on the basis of a sales commission cannot be considered “independent”. We therefore accept no commission payments from any product providers – these belong to our clients.
Because we operate on a professional fee basis, our advice can be considered objective, professional and impartial. A tailor-made fee agreement will be presented to you after the initial consultation outlining the scope of the work which we propose to do for you and specifying the fee charging basis. Our fees for advice reflect our qualifications, experience and expertise, and in some cases are related to the quantifiable results that we can achieve for you.
GoldCore’s Wealth Management services are primarily, though not exclusively, aimed at high-net-worth individuals with significant investment sums and earnings available, and with personal and taxation circumstances requiring bespoke expertise. Typically, this would involve an initial investment portfolio of more than €100,000.
Many of our clients are themselves self-employed professionals, or Directors and for whom an additional benefit of the fee basis is that our fees can be paid from their business accounts and offset against tax as a business expense.