Taken from Policy Manual Part D: Professional Practice.
It is recognised that potential clients and advisers may wish to engage in an initial consultation, prior to entering into a formal engagement for services.
If no fee is charged for an initial consultation, there is no need for an adviser to adhere to the client engagement process in accordance with other clauses of the code of conduct.
If a fee is to be charged for an initial consultation however, all of the requirements of the client engagement process in accordance with other clauses of the code of conduct must be followed.
An issue that has been identified in this area of professional practice is advisers not adhering to the client engagement requirements of the code of conduct, when charging a fee for an initial consultation.
In summary, the following actions must occur in respect of an initial consultation, where a fee is charged by the adviser:
A written agreement for an initial consultation fee need not be a complex document, and indeed will likely communicate more effectively if it is not. If engaged to provide further services following an initial consultation, a subsequent written agreement identifying the services required, and addressing the issues potentially arising in an ongoing professional relationship, would then follow.
If the client decides not use an adviser’s services following an initial consultation, the adviser may also wish to complete a letter of non-engagement, to ensure that the outcome of the initial consultation is clear.
An adviser should treat the initial consultation, and any follow-up, as very important. At this time essential information is gathered, and initial views of available options communicated. It often sets the direction for the professional engagement.