From June 1st, firms wanting to promote themselves as independent advisers will have to provide clients with a fee option, or will be in breach of Financial Services Authority rules, which could result in a fine.
At present there are only around 10% of independent financial advisers who offer this service, alongside the more common commission option. To provide a fee option, independent financial advisers need to set their hourly rates for different types of advice and have a system to log how many hours they spend on each case, as without this, challenges from clients regarding charges could prove difficult to defend.
The Financial Services Authority is monitoring the situation, but has not decided on its course of action against firms in breach of the rules.
Our view
is Independent and has been offering fee options versus commission options for every advice based client since the day we started trading. This new move will cause some advisers to become a little clearer in exactly what and how they get paid.