Field Notice 2021-15
Effective July 1, 2021, ESI Financial Advisors (“EFA”) will allow advisors to collect up to 100% of financial planning/consulting fees in advance. In the past, EFA limited pre-payment of planning/consulting fees to no more than 50% of the total fee charged. However, based on feedback from the field, EFA has amended its policies to permit advisors to collect up to the full amount of the fee in advance of delivery of service, provided they meet certain stipulations.
POLICY
In the event a client chooses to pre-pay the full amount of a financial planning or consulting fee, EFA will permit the advisor to receive half the paid amount and will retain the remaining half until the Firm receives final confirmation of delivery of services. Once confirmation of delivery of services is received, EFA will release the remaining balance of the pre-paid fee to the advisor. If the pre-paid fee is greater than $1,200, services must be completed within four months of the date of the agreement. In these instances, if EFA does not receive confirmation of services within the prescribed timeframe, the client will be refunded the amount of the advance payment made. In all instances, planning or consulting services must be provided to the client within six months of the date of the agreement, unless an annual renewal agreement is in place, in which case services will be provided on an ongoing basis throughout the renewal period.
Clients who pre-pay fees but terminate a financial planning/consulting agreement prior to the final delivery of services, will receive a refund of fees paid, minus a prorated amount (at the Firm’s discretion) for services provided prior to the Firm’s receipt of the client’s notice terminating the agreement.
Both the Financial Planning and Financial Consulting agreements will reflect this change.
QUESTIONS?
Please contact the ESI Business Development with any questions at 1-800-344-7437.
TC121305(0621)1