Financial advisers charge clients thousands of pounds annually – but don’t see them for years

Hundreds of thousands of people pay financial advisers to look after their money, but most go years without ever meeting them, research shows.

More than half (53pc) of 1,000 people who have between £50,000 and £1m invested with a financial adviser had not had a face-to-face meeting with them for two years or more, according to Bancroft, the wealth manager that conducted the study.

They paid on average 1.5pc a year in fees, or £2,835 based on the average portfolio size of £188,948.

Bancroft’s Keir Ashman said: “Some were paying £7,500 a year and we’ve even come across clients in the past paying over £30,000 a year.”

More than one in three did not know how much in pounds they paid their adviser. Most often this was because they found it too difficult to calculate what they were being charged, although one in 20 said their adviser had never told them.

The value of financial advice has been thrust into the spotlight recently as clients have complained about poor performance and service, particularly since the coronavirus outbreak.

Telegraph Money recently reported that disappointed savers had been abandoning their wealth managers over poor communication and customer service during this year’s market falls.

Find a Wealth Manager, a comparison service, said the number of people contacting it because they were unhappy with their current adviser had risen by a third.

Many clients said they had either heard nothing from their adviser after their investments had fallen by 20pc30pc or been sent only generic and unhelpful comments.

Lee Goggin of Find a Wealth Manager said: “There can be several elements to costs and charges, thanks to the number of moving parts in providing the service. But that’s no excuse for any lack of transparency.”

He added that investors were prone to being seduced by attractive headline fees that did not represent the reality of what they would pay.

Anthony Morrow of OpenMoney, a financial adviser, said: “All charges have to be provided in isolation, but unless the customer knows their way around a key features document it can be a real pain finding out what the total cost is likely to be.”

In November last year the Financial Conduct Authority, the City watchdog, said it was concerned that charging models could be harming consumers, particularly older savers with more complex issues.

‘Unless customers know how, it can be a real pain finding out what the total cost is likely to be’