MiFID II will concentrate financial advisers’ minds wonderfully on how they charge their clients on an ongoing basis – and how they present those charges. Anecdotal evidence strongly suggests that most advisers haven’t yet woken up to their new responsibilities with respect to annual charges disclosure as part of the new transparency required about total costs of investing.

Platforum’s upcoming Adviser Charging Report to be published in December will contain hard statistical evidence of the extent to which advisers are aware of the requirements and what preparations they have made.

As a great deal of the advance material about MiFID II makes the disclosure requirements look as if they are just an issue for providers and platforms, we think that adviser consciousness about this will probably be low. Leastways, that’s the view of Peter Smith of TISA who has talked to groups of advisers about MiFID II.

Just to be clear, advisers will have to tell their clients annually in advance what they will be charging them – in pounds, not just percentage terms – and then at the end of the period they’ll have to  account to the clients for what they have actually charged.

At Platforum, we think that this will help focus clients’ attention on adviser charges and the value for money that they represent. Judging from conversations at the Personal Finance Society’s festival this week, advisers who have thought about it tend to agree with us.

It will be fascinating to see whether these innovations will have an impact on ongoing charging rates – and even more interesting to see whether they spur many advisers into providing more added value work for clients. We see an up-tick coming in more tax planning and the greater use of valuable tools like cash flow modelling.