Guidance on Heading Use for IFA’s

Guidance on Heading Use for IFA’s

Income - Section K Adviser Fees

  • Only transactions that use headings in the Investment category and the Life & Pension category are reported in Section K
  • Each of these 2 categories has 4 headings; Lump Sum Fee, Initial Fee, One Off Fee and Ongoing Fee
  • Lump Sum Fee – use for Initial Charges paid by a single payment – most common
  • Initial Fee – use for Initial Charge when paid by several instalments – rarely used
  • One off Fee – use where a fee is charged but there is no Initial/Lump or Ongoing associated with the advice i.e. it’s ad-hoc advice
  • Ongoing Fee – received in later years after an Initial or Lump Sum Fee

 

Income - Investment Initial Commission 

  • Generally, do not expect this to be used as new product sales are in the post RDR era.  Can arise if there are still Initial commissions being received relating to a pre RDR sale.

 

Income - Life & Pension Initial Commission 

  • Generally, do not expect this to be used as new product sales are in the post RDR era.  Can arise if there are still Initial commissions being received relating to a pre RDR sale.
  • Sometimes this heading is used in error when Protection Initial Commission should used if the product is pure protection with no investment element

 

Expense – Commissions Passed On 

  • Commissions Passed On headings are provided to allow Section B reporting of Gross and Net Commissions.  As yet no reporting of Gross and Net Fees is required
  • Commissions Passed On headings are provided for each product type
  • Only use these heading if the income being passed on was earned as a Commission
  • Only use these headings if the recipient is a third party i.e. an introducer
  • Do not use these headings if the recipient is an internal adviser – use a different expense heading
  • Record Fees passed on using a different expense heading – as these do not have to be reported at present

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