When asked to name the most desirable qualities in a financial adviser, FT Money\nreaders told us they wanted the three Ts — transparency, trust and tailored\nadvice. \n\nThese are the criteria most have in mind when searching for a financial adviser,\nnamed in detailed responses from more than 300 readers, over two-thirds of whom\nare currently paying for financial advice. \n\nTopping the list of their bugbears was any lack of transparency — particularly\nwhen it comes to fees. \n\nJust over 7 per cent of readers who responded to our survey confessed that they\ndid not know how much they were paying for advice. Many more took issue with the\nlevel of fees they were being charged, and the way these were applied. \n\nThe widespread practice of charging ad valorem fees — where advisers take a\npercentage of the value of assets under management every year — was particularly\nresented. \n\n“Fees should be in £, not %” is how one reader bluntly put it. \n\n“A fee based on the value of the total portfolio means that whether it goes up\nor down, the adviser receives a good fee,” said another. “Say my portfolio is\ntwice as big as someone else’s. I then pay double their fees for the same two\nreview meetings a year. Why?” \n\nOther readers were frustrated at not being able to find an adviser prepared to\ncharge fixed fees for investment advice. Some said they chose to manage their\nown investments for this reason, and only paid an adviser a fixed fee for\nspecific services such as tax advice. \n\nVideo: Fintech faceoff: Big banks v start-ups\nRESTRICTED VIEW\nA linked complaint was “restricted advice” — the Financial Conduct Authority’s\ndefinition of firms that can only recommend products from a limited range,\nrather than the whole of the market. \n\nAbout a third of readers who completed our survey confessed they did not know if\ntheir adviser was restricted or independent. \n\nOne reader made the point that by restricting the range of investment options,\n“the term financial adviser is a misnomer; almost all ‘advisers’ are just\nproduct distributors or salespeople and need to be treated with appropriate care\nand caution.” \n\nThere were many other comments about readers’ dislike of “fee-driven advice to\nbuy particular products”, the feeling that advisers were giving them the “hard\nsell”, and “hidden fees and unknown commissions” contained within charging\nstructures. \n\n“Fees hurt,” wrote one respondent, bluntly stating the reason why 16 per cent of\nreaders who did not have an adviser said they were put off from trying to find\none. \n\nGiven the level of dissatisfaction over fees, the impact of regulatory changes\nshould be a wake-up call for advisers and their clients. \n\nUnder the Markets in Financial Instruments Directive (Mifid II), introduced in\nJanuary 2018, investment advisory firms have to provide clients with a breakdown\nof fees, detailing how much they are paying, and what for. \n\nRECOMMENDED\n * The four questions financial advisers are most often asked\n * The UK’s Top 100 Financial Advisers\n * Listen: What do you really think about financial advisers — and what do they\n say about you?\n * Here’s some free financial advice: beware of fees\n\nFees will be individually detailed in pounds and pence; for example, instead of\na client knowing that they pay 1.9 per cent a year for a £100,000 portfolio, the\ncosts will be broken down, such as £800 for financial advice, £200 in platform\nfees, and £900 investment fund fees. A recent FCA document emphasised that firms\nmust communicate “in a way that is fair, clear and not misleading”.\n\nOne reader commented: “Now that I’m seeing my fees in pounds, shillings and\npence, I do wonder what I’m paying for. Never does it cost £20,000 a year to\nlook after my products!”\n\nMany in the industry believe that the regulatory shake-up will cause wealthy\nclients to question the value of the services they are paying for. \n\nCharlotte Ransom, chief executive and founder of Netwealth, said clients often\ndo not have an understanding of “the impact of high fees over time”. Although\ninvestment returns might look good, the net returns — once the cost of fees have\nbeen subtracted — tell the true story. \n\n“Being wealthy doesn’t necessarily mean that you get a good deal,” she said,\nadding that Mifid II would be a “transformational moment” for the industry as\nmany clients would wake up to the fact that “traditional wealth managers are\novercharging”.\n\nOne reader who responded to our survey said that he would be prepared to pay\nmore for good advice. He worked in the US for about 30 years, and had a “stellar\nadviser” who he paid $250 an hour for two hours of financial planning and tax\nadvice a year.\n\n“She required you to bring your last tax return, family budget, list of assets\nand your financial goals and concerns to the interview,” he said. “She was\ninformed, incisive, raised alternative ideas, was non-time wasting and did not\nrecommend particular funds or investments. I would have paid her, and would pay\nanyone in the UK who was as good, three times as much per hour,” he said. \n\nVideo: Listen: What do you really think about financial advisers - and what do\nthey say about you? \nTRUSTED SERVICE\nThe US approach echoes the kind of service that many UK-based readers told us\nthey wanted to achieve. \n\nTrusting their adviser was the most frequently mentioned term, but clarity,\ncreativity in their thinking, honesty, independence and being a good listener\nwere all qualities that readers named in their longer answers as adding value. \n\nOther readers stressed they wanted an adviser who understood their individual\ngoals and circumstances and provided “personal, individual, thoughtful advice”.\nSome wanted this to go beyond investment advice, and wished to “talk\nphilanthropy, business and raising rich children” with their adviser to achieve\n“life objectives as well as financial ones”.\n\nProvided that clients understand what they’re paying for and think this\nrepresents value for money, high fees are fine, said Matthew Fowler, director of\nFowler Financial Planning. \n\n“For anyone whose focus is purely on cost, there are better places to do it,” he\nadded, emphasising that when it comes to financial advice, cheapest is not\nalways best. \n\nThis attitude was reflected among our readers. Of those who were paying for\nadvice, 38 per cent said they were “very satisfied” that they were getting good\nvalue. A further 41 per cent were “satisfied” with the level of charges, but\njust over 13 per cent felt they were “not getting good value”.\n\nAlthough 43 per cent of readers have never changed their adviser, “any event\nthat led to a loss of trust” such as “poor performance over a sustained period”\nand subsequently paying for an unsatisfactory service would prompt them to do\nso.\n\nAlmost a third of readers without a financial adviser named lack of trust and\npoor past experiences as reasons for this. In a survey of 13,000 people this\nyear, the Financial Conduct Authority found that only 39 per cent of UK adults \ntrusted financial advisers to act in the best interest of their clients.\n\nA graphic with no description [https://www-ft-com.ezp-prod1.hul.harvard.edu/__origami/service/image/v2/images/raw/http%3A%2F%2Fcom.ft.imagepublish.upp-prod-us.s3.amazonaws.com%2F4664a63a-f341-11e8-ae55-df4bf40f9d0d?dpr=1&fit=scale-down&quality=highest&source=next&width=700]\nWORD OF MOUTH\nIn contrast, those who have found a good adviser they trust wanted to shout\nabout them. When we asked readers how they found their current adviser, just\nover one-third said it was a word-of-mouth recommendation from a friend. \n\nAlmost a quarter of readers said they followed the personal recommendation of a\nfamily member, colleague or other financial professional, such as an accountant.\n\nThe majority of advisers similarly described word-of-mouth referrals as their\nprimary way of finding clients. Lindsey Hamilton, director of Logic Financial\nServices, said 80 per cent of her clients are referrals.\n\nBuilding trust with an adviser goes hand in hand with readers’ overwhelming\npreference for receiving face-to-face advice. Despite the recent rise of robo\nadvisers, more than 70 per cent of advisers surveyed said they were not worried\nabout the future impact of low-cost digital platforms. \n\nTOP 10 TOPICS RAISED BY CLIENTS, ACCORDING TO ADVISERS\n * Pension/retirement plans\n * Brexit\n * Tax planning\n * Fees\n * Recent market volatility \n * Investment returns/growth\n * Am I doing the right thing?\n * Financial planning\n * Inheritance tax\n * Risk mitigation/capital preservation\n\nMs Hamilton said: “It will never completely replace the value of face-to-face\nmeetings and a person you can just have a chat with if you are worried about the\nworld.” \n\nRob Roberts, financial planner at The Chester Partnership, said that advisers\noffered services that computer algorithms could not replicate, such as “setting\ngoals, working towards set objectives and helping people to understand what is\nand — more importantly — is not available in terms of options and opportunities\nin the market.” \n\nAlongside trust, transparency and tailored advice, one “T” to avoid was an\nexpensive Hermès tie. To be fair, only one FT reader was so specific about the\nsartorial choices of advice professionals. But plenty of others remarked that\nthose with “flashy offices”, chunky designer watches or expensive sports cars\nparked outside were communicating “fat cat” values — and almost certainly\ncharging them too much. \n\nAdditional reporting by Claer Barrett \n\nSTRANGEST REQUESTS RECEIVED BY FINANCIAL ADVISERS \n“Why should I invest now, given the potential for World War Three?”\n\nWe asked financial advisers to tell us about some of the more unusual questions\nthey had been asked by their clients — and this was one of them.\n\nOther advisers who responded to FT Money’s poll had clients ranging from a \nfashion fanatic who was eager to “liquidate part of her portfolio to update her\nwardrobe” to a treasure seeker who wanted to “turn his whole portfolio into\nphysical gold”.\n\nSome clients expected a lot in return for their fees. One adviser was asked:\n“Can you carry my son’s golf clubs across the City for me?”\n\nOthers relayed experiences of dealing with their clients’ marital strife. One\nadviser was horrified when a client pompously insisted: “Don’t tell my wife how\nmuch money I have — she’ll only spend it all”. Another had a client who asked\nhow to hide assets from a cheating partner; a request the adviser turned down.\n\nOne adviser had to explain basic numeracy to a divorced female client worth £8m.\n“This was a classic case of the husband paying for and controlling everything,\nthen when alone, she was unable to understand the value of money and assets,”\nthe adviser said. \n\nOthers had touching stories of human kindness. Rob Roberts, financial planner at\nThe Chester Partnership, described how a couple left a substantial bequest in\ntheir will to the travel agent who found them a hotel in Lanzarote, where they\nhad subsequently holidayed every year for a decade. For his much-appreciated\nefforts, the agent inherited £300,000.