Five major providers have joined forces to agree a "shared" approach to facilitating adviser and consultancy charging.
Aegon, Friends Life, Legal & General, Prudential and Scottish Life have produced a set of principles (see below) for advisers and providers to ease the facilitation of the payments.
Steven Cameron, head of regulatory strategy Aegon, said the approach could help to avoid problems for advisers and providers.
"We feared there could be chaos in early 2013 if advisers were to agree certain charging structures with clients, only to find the provider they then recommend wasn't offering that particular option," he said.
The project was facilitated by Deloitte and also involved input from Sesame Bankhall and a number of trade bodies.
Gavin Norwood, partner at Deloitte, said: "The industry needs to develop a common view of how adviser charging and consultancy charging will work in practice."
The providers' ten generic principles
- The AC agreement is between the client and the adviser firm, not the adviser.
- The CC agreement is between the employer and the adviser firm, not the adviser.
- AC/CC taken from pensions can only pay for advice and services on pensions.
- Providers will communicate to the market the products through which they will facilitate AC and CC, and the AC and CC structures available for these products.
- Before any ACC or CC can be facilitated, the adviser firm and the provider need to re-agree terms of business.
- AC/CC instructions will capture any initial, ongoing or ad-hoc AC/CC and stipulate that it will be the gross amount (i.e. including VAT). The CC instruction can be at scheme or at individual level.
- Providers do not require information with regard to AC/CC which they are not facilitating.
- The provider will comply with AC/CC instructions once validated, in a timely manner.
- Advisers or employers will communicate services/changes to services being provided to the client or individual, in a timely manner.
- Advisers will keep their own VAT records for AC/CC. Providers will not keep these records.
Read the full document [asset_library_tag 3862,HERE].
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