Fee-only: Italy ready to close the gap with Europe, says Copernico

Fee-only financial advisory is still taking its first steps in Italy, but sophisticated clients are quickly closing the gap with the rest of Europe, says Saverio Scelzo, managing director of fee-only financial adviser Copernico.

Scelzo says MiFID has started to change the rules of the game.

“Larger banks and insurance companies have managed to soften the blow, but we believe that the process of growth is irreversible. Authorities are trying to make the market more efficient, keeping customers more informed,” he said.

He added that clients using traditional financial products find themselves in a weak position in terms of a lack of information and providers’ conflicts of interests.
Fee-only advisory gives clients a more transparent and informed control over products selected in the portfolios, as well as reducing conflict of interests, says Scelzo.

“The success is determined by the fact that the products distributed aren’t necessarily tied to the company that sells the products and to the lower total expense ratio. On the other hand, caution is necessary because there is still a risk of not being paid by the client.”

In Italy, fee-only financial advice is now offered by most independent companies. But, Scelzo warns, clients should keep in mind that fee-only advisory is not a “crystal ball service”. 

“No-one can predict the future. In our opinion, fee-only is a great instrument to plan the financial future of our customers that will be well informed on their investment decisions.”

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