Initial consultations

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.

In summary, the following actions must occur in respect of an initial consultation, where a fee is charged by the adviser:

• any fee charged for an initial consultation must be fair and reasonable in the circumstances [as per clause 8a of the code of conduct]
• before the initial consultation takes place, any fee to be charged must be set out in writing [as per clauses 8b and 8d of the code of conduct] 
• the payment terms and conditions that apply to the initial consultation fee must be set out in writing, prior to the signing of any written agreement [as per clause 8c of the code of conduct]
• a written agreement must be entered into, and must set out the services to be provided and meet all of the other terms required of a written agreement [as per clause 1.5 of the code of conduct]
• the client must be provided with a copy of the code of conduct [as per clause 1.4a of the code of conduct]
• the client must be provided with a copy of the adviser’s internal complaints procedure [as per clause 9b of the code of conduct].

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.