Get ready for an onslaught of ‘shocking' performance fees

I am not going to bore you with my applause for the FSA's recent RDR proposals - anything that moves us away from the current system is going to get my vote, especially if it forces investors to ditch their myopia on commission-based fees and ‘encourages' them to actually pay up front for decent professional advice.

My worry is the nirvana conceptualised by the FSA policy wonks may not actually happen – that wonderful new world might look like a British version of the US system where fees are driven down by careful, unbiased planners paid on a fees basis. The FSA has quite rightly focussed on the cost of advice alongside the distribution channels because of course although returns are possible, even probable, costs are a dead certainty that drains total shareholder returns. Yet I think the proposals may actually produce the exact opposite result on costs imagined by the FSA – they may start to rise ...