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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. A premium added on to a fee solely because of a client’s ability to pay is not likely to be fair or reasonable to a client.

Issues that have been identified in this area of professional practice include advisers:

  • not rating highly from the perspective of their clients in the area of providing services for a reasonable cost in the Authority’s annual Survey of New Zealand Visa Applicants Who Have Used an Immigration Adviser
  • not being clear and transparent about how fees are calculated, when fees become payable, how fees are to be paid, and changes to fees
  • failing to obtain the agreement of the client to any changes in 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.

Code of conduct requirements and additional considerations

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

An adviser must ensure that:
  • the fees set are fair and reasonable in the circumstances
 8a
  • fees and disbursements (including Immigration New Zealand fees and charges) to be charged are set out, including the hourly rate and the estimate of time it will take to perform the services, or the fixed cost for the services
 8b
  • payment terms and conditions are set out
 8c
  • fees, disbursements and payment terms and conditions are provided
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
In relation to fees, an adviser should also:
  • record a full description of the services to be provided by the adviser in the written agreement with the client
1.5b
  • 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

These obligations flow from the fact that advisers are professionals who have the privilege of being licensed to provide services to the public, which other service providers who are not licensed or exempt are excluded from.

The duty that follows from that privilege is professionalism, and as a professional service provider an adviser must act fairly in their dealings with clients, and are not entitled to put their personal interests first. An adviser therefore has no right to set commercial terms that are not fair to their client, and the terms of an agreement with a client will never override this premise. Advisers can expect to be held to account if they do so.

Practice hints for setting fair and reasonable fees

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.

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

Steps Actions
Prepare a budget (in hours) for each new assignment Before giving potential clients a quotation for services:
  • list each subtask to be completed
  • estimate realistically the number of hours each task is expected to take and who will do them.
Calculate an hourly charge rate Take into account recovery of:
  • labour costs (salaries for the adviser and their 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 the proposed client fee Multiply the number of budgeted hours by the hourly charge rate
Check Consider the resulting fee, and ask:
  • Is the proposed fee fair to the client?
  • Has the work been planned to be undertaken as efficiently as possible?
  • Does the resulting fee represent value to the client?
  • Having paid this fee, is the client likely to recommend the adviser’s services to others?