A retainer fee is an agreed fee paid by the client, to secure the services of a consultant. While the Initial Planning fee is meant to remunerate the adviser for specific and well defined work, the retainer fee is meant to remunerate the adviser for time spent for on-going services. The following are examples the services provided in the Retainer Service:
- Budgeting and credit management (e.g. mortgage);
- On-going review/update on protection planning;
- Tax saving strategies reminder;
- Continuing advising on investment based on the client’s entire net asset. Assisting in rebalancing the investment portfolio;
- Insurance policy servicing such as change of particulars and claims handling. Note: Some insurers only permit the original insurance adviser to provide such policy servicing but usually this is not an issue if client makes the necessary authorization;
- Free unit trust funds switching;
- Providing continuing financial education to clients through articles written specially for clients;
- Regular economics and investment market updates;
- "Savvy" clients who would like to have a second opinion on their own investment trades or would like someone to provide them with an unbiased market views can also benefit from this retainer service.
Many financial advisers charge a retainer fee to their clients without them knowing it because products recommended would embed these as hidden fees. For example,
- Some standalone Personal Accident plan products have perpetual renewal commissions;
- Certain riders attached to a life policy attracts on-gong renewal commissions;
- Unit trusts containing trailer fees and wrap fees which are deducted from the NAV; and
- Hedge funds providing trailer fees to the adviser;
I prefer to be transparent in my fees rather than embed these into products.
Similar to the Initial Planning stage, the Retainer Service does not require clients to purchase any products from me.
Is the Retainer Service really necessary?
The Retainer Service is only applicable if the client has already done Initial Planning. Retainer Service cannot be offered to those who did not have their Initial Planning done. After the Initial Planning is done, the outcome of the Initial Planning shall determine whether will there be any on-going advice required. Clients are encouraged to sign up for the Retainer Service if there will be on-going advice.
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