An introduction to advice fees and charges
At Wesleyan Group, we’re always transparent about the charges you might incur when you save or invest in our products.
If you take out a product through a Specialist Financial Adviser from Wesleyan Financial Services, an initial advice charge will usually apply. If you opt in for ongoing advice from your Specialist Financial Adviser, you’ll pay a charge for this too.
Information on Wesleyan Financial Services’ advice charges can be found below.
Bear in mind that depending on the product you take out, you may also pay product provider charges, such as annual management fees.
Advice charges for insurance, protection and mortgage products
For providing advice and recommendations for insurance, protection or mortgage products, Wesleyan Financial Services will typically be paid a fee by the insurance or mortgage provider. While there is no direct advice charge for you to pay, that doesn’t mean the service is free, as you still pay for advice indirectly through product charges.
Details of the commission can usually be found in your illustration and Suitability Report.
Advice charges for savings, investments, pensions and annuities
When you take out these types of product via advice from a Specialist Financial Adviser, there are three potential types of advice charge you might need to pay:
- An initial advice charge – this is the cost of the initial advice. It's paid as a percentage of each new investment you make as a result of advice.
- An ongoing advice charge – paid if you opt in to receive regular advice and annual reviews.
- On request advice review charge – for reviews you request outside of the ongoing advice service.
Annual management charges may also be charged by the product provider. These will be clearly outlined before you invest. You will never be charged until you have accepted and agreed the fees.
In return for any advice charges you pay, you can expect to receive financial advice from highly qualified Specialist Financial Advisers, always with your very best interests at heart.
Initial Advice Charge
When you take out or top up an existing product via a Specialist Financial Advisor from Wesleyan Financial Services, you’ll usually pay an initial advice fee. This is calculated as a percentage of your investment, and it’ll be taken out of your plan automatically.
The Initial Advice Charge applies when you do any of the following as a result of our advice:
- Take out a new savings, investment, pension plan or annuity
- Make regular payments into a plan
- Select existing funds in a pension policy for drawdown*
- Top-up a savings, investment or pension product you already hold.
Details of the current charges are shown in the tables below, but please bear in mind that we may change the Initial Advice Charge at any time in the future. When you take out a new savings, investment, pension product or annuity, or top-up an existing savings, investment or pension product in the future, the Initial Advice Charge at that time will be applied.
* We will waive any Initial Advice Charge which would apply for moving pension funds to Flexi-access drawdown when, as part of the same advice, those funds have already been subject to an Initial Advice Charge within the previous 12 months. We will reduce the Initial Advice Charge to 1% for moving pension funds into a Flexi-access drawdown when, as part of a separate piece of advice, those funds have already been subject to an Initial Advice Charge within the previous 24 months.
Initial Advice Charge for lump-sum contributions
To calculate the initial advice charge, there is a tiered structure based on a percentage of your investments. Here’s how it works for lump-sum contributions:
Investment amount | Rate applied | Example costs |
|---|---|---|
| The first £300,000 + | 3% | For an investment of £50,000: 3% of £50,000 = £1,500 |
| Any amount above £300,000 | 0%* | For an investment of £550,000: 3% of first £300,000 = £9,000 (+ 0% of remaining £250,000 = £0) = £9000 |
Note these rates only apply to lump sum contributions paid in one go, and not a total of all investments made over the term.
Initial Advice Charge for regular monthly contributions
If you’re making monthly payments to your plan, as well as (or instead of) lump sum contributions, here’s how the advice charge would be worked out:
| Investment amount | Rate applied | Example costs |
|---|---|---|
| All amounts | 3% of the premium deducted from each premium for the first ten years. After the 10th anniversary of the premium commencement, no further Initial Advice Charges are taken from that premium. | For a £250 investment per month: 3% of £250 = £7.50 per month. This equates to £90 per year. Over 5 years the cost is £450. Over 10 years the cost is £900. The Initial Advice Charge then ceases. |
* *The Initial Advice Charge is collected for ten years on premiums paid as a result of advice and will increase proportionately where the premium is automatically indexed. The ten year Initial Advice Charge collection period runs separately for each advised premium increase. For example, for a plan started with an advised premium of £500 a month, which is increased to £750 after five years following further advice, the Initial Advice Charge is collected on £500 for years 1 to 10 of the plan and on the £250 increment for years 5 to 15.
Your illustration and Financial Planning Report will confirm the level of Initial Advice Charge you will pay based on your actual investment amount.
Ongoing Advice Service
Opting in for the Ongoing Advice Service (OAS) service means your Specialist Financial Adviser will provide pro-active advice and guidance on any relevant changes to taxation, regulations or your professional entitlement, to ensure the products you hold remain right for you.
If you opt into our Ongoing Advice Service, either when you take out a product or at a later date, you will pay a fee called the Ongoing Advice Charge. This will be applied to all Wesleyan investment and pension products (excluding annuities) you hold.
You won’t receive a bill for the charge. It’s taken automatically through your plan(s) by cashing in units, usually each month. You will receive an annual statement which details the costs and charges taken over the period.
The Ongoing Advice Charge will apply to:
- new savings, investment and pension plans taken out after 30th December 2012
- top-ups you make to existing plans, including those opened before 30th December 2012.
Note that the charge will therefore apply to all payments you make into plans after 30th December 2012, whether or not you took advice on the initial investment.
| Rate applied | Example costs |
|---|---|
0.5% of how much your investments are worth each year. This will be collected monthly as part of your product charge, or by cashing in units you hold. The Ongoing Advice Charge is applied every year at the prevailing rate at the time. | For an end-of-year value of £30,000: 0.5% = £150 per annum. This equates to £12.50 per month For an end of year value of £38,000: 0.5% = £190. This equates to £15.83 per month |
The figures in the table above are example costs only. Your illustration and Suitability Report will confirm the details of the fee as they apply to you.
The Ongoing Advice Service rate may change in the future. We will give you at least 90 days’ notice in writing if any changes are applied. Your illustration will include an example of the Ongoing Advice Charge you may need to pay in the future, based on your actual investment and potential growth.
Opting out of the Ongoing Advice Service
Remember, you can choose not to take the Ongoing Advice Service in the first place, or to opt out later on. You can cancel or opt out after the first 12 months of membership. To cancel the Ongoing Advice Service, please get in touch with us.
Please ensure you cancel this service if you become a non-UK resident for tax purposes, as we can’t advise you in these circumstances.
On Request Advice Review Service
If you prefer to have, and pay for, your advice reviews as and when you feel you need them, as an alternative to the Ongoing Advice Service you may wish to opt for the On Request Advice Review Service. If you select this option there will be no Ongoing Advice Charges applied to your investments. Instead you pay a direct fee, currently £900 + VAT, for each review you have.
Under this service, you may request an Advice Review with your Specialist Financial Adviser at any time, and this will cover the same areas as an Ongoing Advice Service review. Please note this option does not include features of the Ongoing Advice Service that are additional to the review itself, such as Advice Alerts.
Other charges
As well as advice charges, other fees may be charged by the product provider, such as annual management charges, fund charges, platform charges and specific product charges.
These additional charges will be detailed in your product documentation, such as the Key Features Document and personal illustration.