ABI: Check providers can deliver on charging
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The Association of British Insurers has urged advisers to check if providers’ systems will be able to deliver their chosen method of adviser-charging.
Speaking at a Personal Fin-ance Society RDR seminar in London last week, ABI distribution policy adviser Alexander Smith said advisers can set up their adviser-charging model in a variety of ways, with different charges for different services and the option to set the frequency of payment collection.
He said: “The problem is that providers’ systems are not necessarily capable of meeting all of those requirements. What providers are doing is trying to develop systems to facilitate adviser-charging that cover as wide a range of options as possible. What they cannot do is promise to offer every single type of adviser charge that advisers may want to offer.
“It is not too early now to start talking to providers around the type of adviser charge they might be able to facilitate and your method of charges and what you will be looking for from providers.”
Smith said that if clients want adviser charges deducted from a product, a separate agreement between the client and the provider will have to be signed authorising the deductions.
He said: “This is the consumer setting something up with a provider. That means they have the ability to cancel or amend it at any stage by contacting the provider directly. We will have to act on the client’s instructions.”
Smith added that providers would ensure that the adviser is notified of any changes made by the client.
He said while it is likely that clients may query deductions, providers will not refund any money and will direct any queries to the adviser.
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