Adviser network Sanlam has suspended fee rises for large firms in response to the coronavirus crisis but will still push ahead with planned increases for smaller firms.
Sanlam has frozen fees for firms that pay above the £20,000 per year minimum but appointed representatives that pay smaller fees will still see an increase in their annual fees to £20,000 from next month.
This has irked a number of advisers as businesses are finding it increasingly hard to operate due to the current economic climate caused by the coronavirus.
The firm said it had decided to continue with its fee hike as members have been aware of these changes for the past two months and understand why they are taking place.
John White, chief executive of wealth management at Sanlam, told FTAdviser: “The changes to the minimum fees have been notified to the members for the last two months and the reasons for them are well documented and ensure that we are fair and reasonable with all the members.
“We have already suspended any annual price increases in the network for ARs that already pay above the minimum fees in light of the current conditions.
“We are considering the needs of all our members at this time and will work with any that may struggle financially in the months to come.”
But one adviser affected, who wished to remain anonymous, said although the doubling of fees was mentioned months ago there have been “seismic changes” since then.
They said: “The supposed reason for the fee hike is due to increased costs due to an increase in levies from the Financial Services Compensation Scheme and professional indemnity insurers.
“If Sanlam can afford to hold back on fee increases for some members, why should that be subsidised by others?”
The adviser also questioned how Sanlam intended to work with its ARs who will struggle financially in the next few months as this has not yet been communicated.
They added: “Even HM Revenue and Customs are helping businesses in the current pandemic. Why can't Sanlam?”
Another adviser said: “In the midst of one of the biggest strains on anyone's finances, when advisers' income is threatened on two fronts by falling investments resulting in reducing income for advisers, as well as pressure on whether to charge money to people who may need it to put food on the table, Sanlam has, without any concern, pushed ahead with a 120 per cent increase in fees charged.”
In February, FTAdviser revealed Sanlam planned to subject its adviser companies to a change in its fee model, which will see all appointed representatives charged a minimum of £20,000 regardless of turnover.
At the time of reporting eight companies decided to leave as a result, while the remaining 22 affected have been looking at ways to reduce their fees to minimise the impact of the charge, which comes into force from April.