Retail Distribution Review  

Guide to Adviser charging

  • Describe how adviser charging works
  • Decsribe the importance of the current system
  • List the differences between adviser charging and commission
Guide to Adviser charging


Adviser charging is the system that was brought into play in 2012 to be the new form of payment that advisers receive.

Pre-RDR, advisers could have a choice of fees or commission, but the FCA felt that this introduced bias into the sector.

While clearly some advisers had enough integrity to not let commission payments sway them, and indeed many argued that the commission payments from big policies helped subsidise the advice given to less affluent clients, it was clear that every time a provider offered a big commission on a new product, it would see a spike in sales.

How does adviser charging work, and what are the pitfalls?

This guide seeks to cover the basic points of adviser charging, including the rise of contingent charging, and sets out how advisers can make it work.

My thanks go to: Simon Cowley, wealth management consultant at Walker Crips Wealth Management; Gemma Harle, managing director of Intrinsic’s financial planning and the mortgage network; Dr Matthew Connell, director of policy and public affairs for the Personal Finance Society; Ricky Chan, director and chartered financial planner at IFS Wealth and Pensions; Jeannie Boyle, director and chartered financial planner at EQ Investors; Alastair Lewis, senior business development manager at Blackfinch; Mihir Kapadia, chief executive of Sun Global Investments;  Kay Ingram, director of public policy at LEBC Group; the Heath Report; Steven Cameron, pensions director at Aegon; Verona Kenny, head of intermediary at Seven Investment Management.

In this guide


Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. An adviser charge can be facilitated through a provider. True or false?

  2. Which of the following is NOT something the FCA was unhappy with, pre-RDR?

  3. What is the main difference between adviser charging and commission?

  4. Why do some in the advice industry believe a ban on contingent charging would be a bad thing?

  5. The RDR and advisers charging has restricted access to advice - a large portion of the industry believes. True or false?

  6. What is the overall advantage of adviser charging?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Describe how adviser charging works
  • Decsribe the importance of the current system
  • List the differences between adviser charging and commission

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