Planning Finances or Selling Insurance?

I’ve written a couple of blogs this week about my need for financial planning and my fear of wealth management. To repeat again, I don’t want to be treated as wealthy, but I do need help planning my saving and spending.

In my second blog, I looked at a company called Succession, which I criticised  for blurring the lines between financial planning and wealth management. Clearly the aim of Succession is to get funds under advice and charge ad valorem on those fees. Apparently this is “adviser charging” rather than commission but I’m not so sure.


I work for two professional services firms, when we charge – we add VAT to our invoice. Unfortunately this means the customer has to pay 20% more but – that’s the law. We are aware of an arcane ruling that if you advise on insured contracts, that advice might be deemed VAT exempt, but we don’t think there is much substance in that. We would not advise on insured contracts exclusively – where do you draw the line? We don’t.

Here is another view- that of Christopher Mellor a registered life planner – and wealth planner with Succession.

Geez the Trolls come out from under their bridges yet again and spout off garbage without any justification nor evidence to support their misguided, unfounded and totally unsupported figures. The attitude of “..lets just pick some figures out of the air or make something up..” because my comment will sound good is just crass.

Where on earth has the VAT point come from ? There is no VAT on Succession’s initial nor ongoing Planner servicing fees which are in line with the market and our competitors.

The is no VAT on the OCR’s charged by our Strategic Investment Partners for our Investment Matrix investment solutions..

Financial planning or selling insurance?

Professional fees are subject to VAT (ask any accountant, solicitor or actuary). IFAs tell me they want to be regarded as professional – so why is this firm charging for an initial planning service or an ongoing planning service without VAT?

If the RDR really did get rid of commission , how can Succession be charging fees associated with insurance products and not calling it commission? Either you are financial planning or you are advising on insurance and frankly the comments above suggest the latter.

No quick wins

If IFAs want to be taken seriously , they need to stop these sharp practices. Blurring the cost of advice by bundling it into an ad valorem fund management fee is a feeble way of disguising fees. Similarly, under-cutting the professional adviser by not charging VAT is simply exploitative. It exploits the VAT system (and what it pays for), it exploits the professional advisers who play by the rules and it exploits the VAT loophole which presumably exists for a good reason (heaven only knows what).

The 8,000+ people who have paid to use since outset have all paid VAT – it’s the law. Many of them have gone on to use insurance. We would be a whole lot more competitive if we did not collect money for HMRC but that is the deal.

Many small companies are not turning over enough to recover the VAT, we recognise that they are paying more – relative to bigger VAT registered entities – but that is the law.

There are no quick wins, and companies who say they are will lose at the end of the game.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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