Honister changes charging model due to increased costs
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Honister Capital is revising its charging model in a move which is likely to see advisers pay more in charges due to increased business costs.
The new charging model will be introduced in two stages. From November 2, Honister advisers will pay higher charges through the firm’s existing charging structure.
Honister says this is to take into account rising regulatory costs such as higher professional indemnity insurance premiums and increasing Financial Service Compensation Scheme levies.
From Q1 next year Honister will adopt a new charging structure based on a combination of fixed and variable fees, which it says will be more transparent and fair.
The fixed charges will include regulatory costs and a charge for core services, while the variable fees will take into account the income generated by the adviser firm and the services used.
Chief executive Richard Pearson (pictured) says: “Our aim has always been to provide a competitive charging structure and our advisory businesses have not increased their charges annually in line with inflation, or increased our charges overall, since 2006. Although Honister Capital remains profitable it is not sustainable to continue to absorb the additional costs of business.”
He says the new charging structure will see costs shared fairly between adviser firms, with firms that operate in riskier business areas or with higher volumes of business paying more.
The move is part of a wider restructure at the company. Honister emailed advisers last month announcing that the company was making cuts to reduce operating costs, resulting in an undisclosed number of job losses.
Honister is made up of Burns Anderson, Sage Financial and Honister Partners and direct to consumer business Willis Owen.
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