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For richer, for poorer: Loyalty in financial advice

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ended 17. September 2026

A recent FT Adviser article on firms switching off ongoing advice fees for clients who no longer fit their core service or pricing model has sparked a debate about the moral and ethical obligations of advisers.

NextWealth said firms were making more deliberate decisions about which clients required a full ongoing advice service and which could be served differently, including through different fee models, more junior advisers or hybrid offerings.

One reader argued this was not a “benign act of giving clients a freebie” but the practice of “shuffling off” less profitable clients. “Put bluntly, they are dumping the less well off,” they said.

Another reader agreed, arguing that the profits made from serving clients during accumulation and early decumulation should help pay for their advice in decumulation, adding the new private equity owners at their firm did not see it that way. 

However, not everyone agreed. One reader said: “If a customer becomes unprofitable, a business is well within their rights to terminate the relationship. No business should be forced to keep a loss-making customer on file.”

My questions to advisers are:

  1. When a client has paid ongoing fees for many years, does an advice firm have a moral, ethical or professional obligation to continue serving them if they later become less profitable?
  2. If a client can no longer be served profitably under a firm's existing model, what should the firm do – move them to a different service or adviser, reduce fees, use a hybrid offering, or end the relationship altogether?
  3. If firms become more selective about which clients they serve with full ongoing advice, is there a risk that people with smaller portfolios will increasingly struggle to access the advice they need?

I look forward to hearing your repsonses. 

Best, 

Hereward

 

5 responses from the Newspage community

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Scott GallacherVerified
Director at Rowley Turton
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As a firm, we have always struggled with the idea of stopping work for long-standing clients simply because the economics of the relationship have changed.

We were delighted when those people became clients, they showed us loyalty over many years, and walking away from them later because their circumstances had changed has always felt uncomfortable.

However, as the firm has matured, it has become harder to maintain that approach in every case. Our preference is always to find a way to continue supporting the client, perhaps through a different level of service or adviser.

Where that simply isn't viable, we have sadly disengaged from some clients who no longer fit our service model, but have always tried to handle that carefully and, where possible, introduce them to another firm better suited to their needs.

My concern is that, as minimum portfolio sizes rise, more people who still need advice may find themselves caught in an expanding advice gap.
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Martin RaynerVerified
Financial Adviser at Compton Financial Services
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Advice firms need to make a profit, but that does not mean every client has to be profitable every year. You cannot happily take someone's fees through the profitable years and then drop them as soon as the economics become less attractive. That is not much of a long-term relationship.

A lot of financial advisers take a pragmatic approach. If the work becomes lighter, perhaps in the tail of drawdown, simplify the service and reduce the fee. Equally, a small portfolio requiring significant ongoing work may simply not be sustainable.

The bigger issue is the rising cost of giving advice. More regulation, more risk and more work that clients never see all come at a cost. The market is looking at how advice can be delivered more efficiently, because rising costs make smaller portfolios increasingly difficult to serve.

A long-term relationship should survive the leaner years. Loyalty that disappears when the fees stop being fat is not much of a relationship.
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Graham NicollVerified
Financial Planner, Chartered FCSI at NCL Wealth Partners
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Yes, I believe there is a moral obligation. If a client has trusted a firm and paid ongoing fees for many years, they shouldn’t simply be discarded because they are no longer commercially attractive.
Firms need to design service models that allow long-standing clients to continue accessing advice when they need it. That might mean a lighter-touch or hybrid service, rather than full ongoing advice.
There is also a wider issue. As firms increasingly focus on clients with larger portfolios, we risk creating a bigger advice gap where those with more modest assets struggle to get help. Technology should enable us to serve these clients more efficiently, not provide an excuse to leave them behind.
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Paul DenleyVerified
CEO at Oakham Wealth Management
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There is a difference between recognising that a client no longer needs the same level of service and deciding you no longer want to provide it because they are less profitable.

We would never move a longstanding client on, or reduce their service, simply because our commercial priorities had changed. We made a commitment and we should see it through.

If a simpler or lower cost service genuinely suits a client better, that is worth discussing, but the starting point should be what is right for the client, not whether they still clear the firm's latest profitability threshold.

There is something uncomfortable about charging someone through the profitable accumulation years and then deciding they are no longer commercially attractive when their assets fall in later life. Our service is all about investing for the long term and so we need to form long term relationships. Clients will inevitably be more profitable at some stages than others.
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Eamonn PrendergastVerified
Chartered Financial Adviser at Palantir Financial Planning Ltd
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No advice firm can be all things to all people, but there is a difference between having a defined client proposition and simply dropping less profitable clients.”

Our service focuses on clients with higher levels of wealth and complexity, where ongoing retirement, tax and estate planning can justify a comprehensive service. That doesn't mean someone with a smaller portfolio is less deserving of advice; they may simply need a different proposition.

Ongoing advice has real costs — compliance, administration, annual reviews and adviser time — and firms have to remain commercially viable. But I also believe there is a professional responsibility towards longstanding clients who have supported a firm for many years.

If a full ongoing service is no longer viable, firms should look at alternatives such as a simpler service, guidance, transactional advice or referral to another adviser.

Specialisation is reasonable, but we shouldn't allow it to widen the advice gap