Fees

A professional fee should provide advisers with a reasonable return for their services, skills and knowledge. If it does so, it is likely to be fair and reasonable to a client.

Advisers must be able to justify the fees they have charged by the work they have performed and the costs they have incurred.

Code of conduct requirements

The following clauses of the code of conduct either must, or should be, taken into account when setting fees:

set fees that are fair and reasonable in the circumstances	8a
before commencing work incurring costs, set out the fees and disbursements (including Immigration New Zealand fees and charges) to be charged, including the hourly rate and the estimate of time it will take to perform the services, or the fixed cost for the services	8b
set out payment terms and conditions	8c
ensure that fees, disbursements and payment terms and conditions are provided to clients in writing prior to the signing of any written agreement	8d
each time a fee is payable, provide the client with an invoice containing a full description of the services that the invoice relates to	8e
written agreements contain a full description of the services to be provided by the adviser	1.5b
clients confirm in writing that they accept the terms of the written agreement	1.5d
changes to the terms of written agreements are recorded and agreed in writing	1.5e
work in a manner that does not unnecessarily increase costs	1.1d
obtain agreement in writing from the client, to any material increase in costs, as soon as the increase is known to the adviser	3c

Practice hints for setting fair and reasonable fees

Influences on fees

There a number of factors to take into account while setting fees. Some factors are competing which can act to drive fees higher or lower.
Influences on lower fees might include:

• the level of qualification or experience of the adviser concerned
• the current marketplace for fee levels
• the ease of a particular application
• the client having partly completed work relating to the immigration matter
• the desire to assist in an unusual circumstance
• the desire to enter a particular market.

Influences on higher fees might include:

• the level of qualification or experience of the adviser concerned
• the specific difficulties or complexities of a particular case
• the time required to spend on the case
• the costs associated with running a larger business or practice
• the desire of the applicant for high personal service levels.

As part of the yearly renewal of their licence, all advisers provide the Authority with information about the fees that they charge, and the Authority publishes the average and median fees charged by licensed immigration advisers on its website, www.iaa.govt.nz.

Hourly or fixed fee?

Many new advisers wonder whether professional fees should be charged at an hourly rate, or on a fixed fee basis. There is no right or wrong answer to that question. A fixed fee arrangement might be more suitable where the scope of the work can be well defined, whereas an hourly rate charge might be more appropriate for special, preliminary work or ancillary work that is hard to quantify until the full extent of the work is known.
Note that you do need to calculate your hourly charge rate in order to calculate and justify any fixed fees you may charge.

Calculating fees

Some guidance for calculating fees for defined services, and ensuring that they are fair and reasonable, are outlined below:

Steps	Actions
Calculate an hourly charge rate	Take into account recovery of: labour costs (salaries for the adviser and staff) practice overheads (i.e. fixed costs such as rent and insurance) the costs associated with maintaining a professional library, licence registration, and continuing professional development. Do not forget to add a ‘mark-up’ for profit, to recognise the fact that the adviser is in business. Determine the hourly charge rate on the basis that a professional would ‘charge out’ on average 1500 billable hours per annum – i.e. approximately 32 hours per week.
Calculate average fees for services you frequently provide	Identify the average number of hours you spend on services you frequently provide. Multiple this number by your charge hourly rate to set a fixed fee for a particular service.
Prepare a budget (in hours) for each new assignment	Before giving potential clients a quotation for services consider if the tasks relate to one of your fixed fees. If a fixed fee is not appropriate, estimate realistically the number of hours each task is expected to take and who will do them, and multiply the number of budgeted hours by the hourly charge rate.
Calculate the proposed client fee	Set out the total fee to be quoted.
Set payment milestones (see payment terms and conditions below for more guidance)	Consider: What your payment milestones will be Will you be requesting any money in advance of the work being done? (If so it needs to sit in the client account until the work is completed and the fee is payable and invoiced).
Check	Consider the resulting fees, and ask: Are the proposed fees fair to the client? Has the work been planned to be undertaken as efficiently as possible? Do the resulting fees represent value to the client? Having paid these fees, is the client likely to recommend the adviser’s services to others?