Barrett (pictured) said advisers should benchmark their prices or show their “typical rates” in certain areas of service so consumers can shop around and do not feel “anxious” about seeking advice.
Other professions, such as solicitors who traditionally charged hourly fees, have also started indicating prices for certain services, such as divorces, she explained.
Post-Retail Distribution Review (RDR) rules stipulate advisers have to be transparent about their charges but they do not have to display them upfront.
An investigation by consumer champion Which? in January this year found more than half of the advisers questioned did not reveal how much they charged until customers met with them in person, making shopping around difficult.
But advisers argued it was virtually impossible to come to a conclusion on price without finding out exactly what work the client needed.
Barrett argued the industry needed to find a middle ground. “It’s a step too far for advisers to show their cost on their profiles but they could show a benchmark or rate typical in this area,” she said.
“I don’t think we are ready yet for people shopping around. But there is no reason why over the next few years we wouldn’t see pensions and investments move towards more commoditisation.”
She added: “I think it’s possible. It’s quite crude but it’s better than nothing. Otherwise consumers are not interested, they are scared of engaging with an adviser. Consumers need prices to shop around.
“As an industry I understand it can be difficult but we should be trying to do it. It will break down the barriers for consumers.”
She said adviser directory Unbiased will conduct research in the coming year on how other professional industries handle cost comparison, before devising a “formula” that will seek to give consumers a general guidance on cost among the firms on its register.
IFA Prydis suggested in December less than a tenth of the population has complex enough needs to warrant the fees they would pay for advice, and would be better served by guidance.
But Barrett argued the cost is not the problem for consumers, it’s the perceived lack of transparency around pricing.
“It’s fair consumers pay for advice, as there is a level of risk that is being taken out of the equation when they receive advice. But consumers do not want to be surprised about the cost,” she said.
