Our new technology platform will continue to offer a wide variety of ways to facilitate fees and you will now be able to confirm fees online.
You can now:
- verify fees online without having to send us a paper form – saving you time
- spread an initial fee over a set period of time and illustrate for it – helping you meet compliance requirements.
Below you can read more details about how we will facilitate fees between you and your clients, plus details of changes to the commission we pay for accounts held on Charge Basis 1 - our bundled charging structure. Closer to migration we will write to you separately, giving you more details about what this means for you and your business.
Please note: adviser fees are available for all business held on Charge Bases 2 and 3. Details of commission payable under Charge Basis 1 can be found in our remuneration guide.
Confirm adviser fees online
You will now be able to confirm online that your clients have agreed to your fees, without having to send us a signed Old Mutual Wealth Adviser Fee form. You will need to keep the completed form on your records. To fulfil our FCA obligation to obtain and validate clients' instructions, we will request samples of these forms from you from time to time.
Changes to adviser fees
Adviser initial fee
- Payable as a monetary amount or a percentage of the investment lump sum.
We will continue to deduct the fee prior to investment. On our new technology platform you will now see the fee as a cash transaction. We will then pay this into your firm’s corporate fee/commission account during your selected fee payment cycle.
New adviser regular initial fee
- Now payable as a monetary amount only.
- The fee can be taken over a period of up to 24 months
- It will be deducted separately from the regular investment.
FCA guidance has stated that where an initial charge for regular premium business is paid in instalments, you must make sure the regular instalments are not open-ended but end when the initial fee is paid off.
To help ensure you can meet these requirements you will now be able to set a specific period for fees to be deducted up to 24 months. Illustrations will also take into account the closed ended fee.
We will deduct the fee separately from the regular investment based on the anniversary of the date the account was opened. The fee will be funded using cash initially. Where cash is insufficient to cover the fee or charge, the platform will sell units proportionally to fund approximately six months’ worth of fees, up to a maximum of 0.75% of the account value. You can read more about this in our 'Straightforward cash management' webpage.
If a regular investment is cancelled, the fee will also be cancelled. If a regular investment is paused - and this only applies to ISA investors whose Direct Debits are paused until the next tax year because they have reached the maximum ISA limit - the following applies
- If the fee was arranged prior to migration, it will be cancelled when the Direct Debit is paused. Advisers will then need rearrange the fee when the Direct Debit resumes.
Fees arranged after migration will continue when the Direct Debit is paused.
Furthermore if a regular investment is decreased the following applies
- If the fee was arranged as a percentage prior to migration, it will be cancelled when the Direct Debit is decreased (if no amendment to the fee is also made at the same time).
- If the fee was arranged as a monetary amount prior to migration, it will continue when the Direct Debit is decreased (if no amendment to the fee is also made at the same time).
- Fees arranged after migration will continue when the Direct Debit is decreased.
Important migration information
We will migrate all existing initial fees on regular investments. Fee instructions will be capped at a period of 24 months after migration.
On the new technology, because this type of fee can only be specified as a monetary amount, if you have existing regular initial fee arrangements that are specified as a percentage, we will migrate these using the equivalent monetary value.
Adviser servicing fee
- Payable as a monetary amount or a percentage of the account value.
We currently calculate servicing fees and Old Mutual Wealth charges once a month/quarter/half year/annually depending upon the frequency chosen by you and we deduct these fees on the account’s charge date.
In future, we will typically deduct servicing fees on the anniversary of the day the first account was opened under an individual’s customer reference number. These charges will accrue on a daily basis and you will continue to be able to specify a frequency for the fee payment. If your servicing fees are deducted on a quarterly or annual basis, after migration there may be a change to the month in which your fees are deducted and your fee payment will be based on the fees accrued to this point.
For all products the fee will be funded using cash initially. Where cash is insufficient to cover the fee or charge, the platform will sell units proportionally to fund approximately six months’ worth of fees, up to a maximum of 0.75% of the account value. You can read more about this in our 'Straightforward cash management' webpage.
It will no longer be possible to add VAT on top of your servicing fee.
Adviser ad hoc fees
- Now payable as a monetary fee only.
- Can be requested at any time and is not linked to a client contribution.
For all products the fee will be funded using cash initially. Where cash is insufficient to cover the fee or charge, the platform will sell units proportionally.
You can no longer specify an ad hoc fee as a percentage of an account’s value.
When you request an ad hoc fee from the Collective Retirement Account, you can specify which sub account (crystallised or uncrystallised) you wish to deduct the fee from.
How fees are deducted from the CRA
The enhancements to the CRA give you additional flexibility to manage crystallised and uncrystallised assets separately as they will be split into crystallised and uncrystallised sub accounts.
If you request a servicing fee and your client holds both crystallised and uncrystallised assets, we will fund the fee from the largest crystallised sub account. If your client does not hold crystallised assets, the fee will be funded from their uncrystallised account.
Contingent charging and the CRA
There are three ‘Personal recommendation’ questions within the new business process which you will see when inputting a transfer. The last of these questions is to identify whether contingent charging was used for this transfer advice.
If there are no safeguarded benefits being transferred or the only safeguarded benefits are guaranteed annuity rates you should always answer ‘No’ to the contingent charging question. In line with FCA rules introduced on 1 October 2020, in nearly all cases we will not accept the transfer of safeguarded benefits being transferred where contingent charging applies. The exemptions are where the transfer is from a pensions product offering guaranteed annuity rates or whether either serious ill health or serious financial hardship applies.
Safeguarded benefits involve some form of guarantee or promise about the pension income someone will receive. Examples of safeguarded benefits include defined benefit (sometimes called final salary) pensions, deferred annuities, guaranteed annuity rates and guaranteed minimum pensions.
Changes to how VAT is facilitated
In future we will not provide an option to add VAT to an adviser servicing fee. If you need to add VAT to your fee, you will need to specify the servicing fee percentage inclusive of VAT. If you currently use the option to add VAT to your servicing fee, then at migration we will gross up the servicing fee to ensure you continue receiving the same level of fee.
Please note that if VAT changes in the future we will not make any adjustments to fees that were previously agreed, inclusive of VAT. If you wish to adjust your fee to include changes to VAT, you will have to get your client to sign a new Old Mutual Wealth fee form before making any adjustment to the fee online.
Removal of initial commission on non-advised business on Charge Basis 1
Since the Retail Distribution Review we have continued to facilitate initial commission on non-advised top-ups to Collective Retirement Accounts and Collective Investment Bonds on Charge Basis 1. You will now no longer be able to receive this commission. If you have existing trail commission arrangements, these will continue and will be unaffected.
Changes to fee statements
We currently provide a single statement that gives fee and commission details for all accounts on our technology platform. On the new system you will receive two statements:
- For ISAs and Collective Investment Accounts
- For Collective Investment Bonds and Collective Retirement Accounts
Fee/commission payments at migration
We will make a final payment of fees and commission to you around the time of migration that will cover all fees and commission deducted on the former system.
Adviser back office system integrations
As part of our technology platform upgrade we have worked with back office software providers to enhance the integrations we offer and to minimise any disruption through our migration process.
Where possible, we have ensured that all updates will happen automatically but in some cases you may need to carry out some additional steps. Please note if you receive electronic statements you will get two statements, one covering Collective Investment Accounts and ISAs, the other covering CRAs and Collective Investment Bonds. You can find out more information on the adviser software section of the hub or by typing the name of your adviser software provider in the search box at the top of this page.