MiFID II introduced comprehensive cost and charges disclosure for UK financial advisers. Although the UK has diverged from EU MiFID II rules post-Brexit via the FCA’s own regime, the core principle — that clients must understand exactly what they are paying in pounds as well as percentages — remains central. Under Consumer Duty, these requirements have become even more outcome-focused.
What Must Be Disclosed?
Under COBS 6 and related FCA rules, advisers must disclose:
- All adviser charges — initial, ongoing, and any ad hoc charges
- Product costs — platform charges, fund OCFs, DFM fees
- Aggregated costs — total cost in both percentage and monetary terms
- Effect of costs on return — how cumulative costs impact projected value over time
Ex-Ante vs Ex-Post Disclosure
Ex-ante (before) must be provided before any transaction is agreed. It should be personalised — a client investing £200,000 should see that total costs of 1.8% amount to £3,600 in year one, not just a percentage.
Ex-post (after, annually) requires a statement of all costs charged during the year alongside portfolio performance. Under Consumer Duty, this should clearly evidence value delivered relative to fees charged.
Typical All-In Cost Ranges
| Cost Component | Typical Range |
|---|---|
| Adviser ongoing charge | 0.50–1.00% |
| Platform charge | 0.15–0.45% |
| Fund OCF | 0.10–0.75% |
| DFM charge (where applicable) | 0.20–0.50% |
| Total all-in | 0.95–2.70% |
Consumer Duty: Fair Value Overlay
Since July 2023, Consumer Duty adds a fair value requirement on top of cost disclosure. Advisers must demonstrate that the service represents fair value — not just disclose costs accurately. Annual review processes should document value delivered, not just fees charged. Clients paying ongoing fees without receiving annual reviews are a significant regulatory risk area.
Post-Brexit UK Divergence
The FCA has been reforming the MiFID II framework — removing the rigid 10% depreciation notification requirement and streamlining certain disclosure formats. The underlying obligation for transparent cost disclosure remains unchanged and has been reinforced under Consumer Duty.
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This article is for general information. Always refer to the FCA’s current COBS rules and Consumer Duty guidance for compliance purposes.