It is my deliberate policy not to accept initial commissions from any fund manager. Some clients may prefer the option of having me accept a commission instead of send them a bill, but if I am going to use this system it does restrict my choice of funds to only the usual expensive ones used by most advisers.

In rare circumstances if there is a pressing reason to do so, I will make an exception and use a commission based fund at the client's request.

(To date, I've never done this. I don't intend to, I don't want to. There are scenarios where conceivably a commission would be a more efficient way to do business. Use of the word "independent" prevents me from accepting commissions unless they are rebated.)

The one exception where I will accept a commission is where it is simply offset against a fee for service and the commission does not come from an entry fee. If I were charging $2,500 for a comprehensive plan and one of the recommendations included shares in an initial public offering, or a commission paying mortgage, I would take that commission and subtract it from the $2,500. Rebating such a commission to you would create taxable income which could not be offset by the plan fee because financial plan fees generally are not tax deductible. Clearly there are examples where offsetting, as opposed to rebating, is more efficient. As long as my total income equals the agreed plan fee my independence is not compromised.

Initial commissions for insurance and mortgage products

Where possible I try to give quotes on insurance policies and mortgages with commissions rebated. Some companies allow commissions to be rebated right from the point of getting the first quote, full commission waiving usually reduces the ongoing cost of insurance by about a third. If no suitable policy can be found where commissions are waiveable, or if a commission paying policy is more suited to your requirements, I will rebate the commissions to you by cheque, once they are received. An agreed fee for service is charged for writing insurance policies and mortgages.