Trail commission fees

dunstonh

Aged wrote: »

So now we're seeing what we're paying, as opposed to it being hidden. The issue is whether or not we are receiving the 'advice' that we're being charged for

The requirement is for you to be told what the ongoing charge will be and what service you will get for that ongoing fee.

That ongoing fee may not include automatic pro-active advice. It may just be an annual report or provision of an online portal with you able to contact the adviser as and when you need it.

However, if the service says it will do something then it must do it. So, effectively, you should know what it costs and what you get for it. If you are getting that then fine. If you are not getting that then speak to the adviser.

TH1878

Aged wrote: »

Are they not just the same thing at the end of the day?

Nope. One is paid as an 'introducer's fee' and one is specifically agreed with the client for documented ongoing services (which may be as simple as 'we'll keep your file at our offices).

sandsy

Before 2013, if you bought an investment product through an adviser, the product provider agreed to pay commission to the adviser and the cost of it was incorporated in the product charges. The structure of the commission was a matter for the product provider - but would usually comprise an upfront amount and ongoing amounts. Some advisers offered an ongoing advice service with the the cost covered by this ongoing commission, others didn't. Not all providers specified that there needed to be an ongoing advice service for the commission to continue to be paid, particularly the older the product is.

Since 2013, advice charges are explicitly for the customer's account but the customer can agree that they are paid out of the investment.

Where there is no advice provided, providers can still pay commission to a distributor on the old basis.