Refunds

Clause 3d of the code of conduct requires an adviser to provide any refunds payable upon completing or ceasing a contract for services.

If for any reason the adviser is required to refund the client, they should do so promptly.

Fees may not be treated as non-refundable. There may be unforeseen circumstances that arise that require you to provide a refund to your client.

If an adviser takes a fee in advance of performing the work and does not perform the expected services, they must return the portion of the money which relates to the services that were not performed.

It is acknowledged that there may be cases where fees are not refundable, such as where the adviser gives up the opportunity of other work to be available. As a general principle, however, an adviser cannot retain fees that are not fair and reasonable for the work performed, so at the end of an engagement, any fees paid that are more than what was fair and reasonable must be repaid.

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.