Adviser charging rules

Advisers need to provide their clients with a clear charging structure and clear information on their charges.

We do not set rules for what your charging structure should look like. Examples of charging methods include hourly rates, a fixed fee, percentage charges or a combination of these. Your shouldn't charge different rates for different providers that could both be suitable for the customer’s needs.

Disclosing your charges

Whatever the charge, it must be clear to the consumer. You must disclose your charging structure to a client upfront and in writing, so they have the information in good time before the advice process starts. You must also agree and disclose the total charges your client will pay as soon as you know this.

Ongoing charges

You can only take an ongoing charge if you are providing an ongoing service - for example regularly reviewing the performance of a client’s investments - or for regular payment products.

If there is an ongoing charge for an ongoing service, you must confirm the details of the service, its charges and how your client can cancel the service.

Reviewing your charging disclosures

If you are unable to answer 'yes' to the following questions, you may not be meeting our requirements:

Can your clients understand your charging structure?

• do you disclose your initial and ongoing charges in cash terms?
• if your charge is a percentage, do you provide cash examples?
• if you charge an hourly rate do you provide indicative examples?
• do your clients receive your charging structure before you provide any advice services?
• where your initial charge for regular premium business is paid in instalments, have you made sure they are not open-ended but end when the initial charge is paid off?

Can your clients understand what they will pay and how they will pay the charge?

• do you disclose the total adviser charge specific to the client as early as practical (for example, at the end of the first meeting or shortly afterwards)?
• do you disclose it before the client incurs any charges?
• is it in cash terms?
• is it in writing and in a durable medium?
• do you record the client’s agreement to the specific amount to be charged?
• do you ensure the client has agreed to the method to be used to pay the charge? For example, if you normally use facilitation, is this agreed with the client?