For investments, pensions and retirement advice, no, commission was banned by the Retail Distribution Review in December 2012. Advisers must now charge an explicit fee you agree in advance. Commission does still exist in a few areas, notably mortgages, most protection insurance and some equity-release products.
The short answer
- Commission on investment, pension and retirement advice was banned by RDR in December 2012.
- Advisers in those areas must now charge a fee you agree in advance.
- Commission still exists for mortgages, most protection insurance and equity release.
This is one of the most common, and most reasonable, worries people have about advice: is the adviser quietly earning a cut from the products they recommend? For mainstream advice on investments, pensions and retirement, the answer has been a firm no since the end of 2012, when a major regulatory reform called the Retail Distribution Review (RDR) banned commission on those products outright. This is general information, not personal advice.
Since RDR, an adviser giving investment or pension advice must charge a clear fee that you agree in advance, whether that is a percentage of your money or a fixed sum. The old model, where a product provider paid the adviser a hidden commission baked into your policy, is gone for these products. That single change is why modern advice fees are visible on your paperwork.
It helps to understand how the old system worked, because its shadow still shapes people’s suspicions. Before 2013, an adviser recommending an investment or pension was typically paid by the provider, an initial commission of perhaps several percent of your money, plus a smaller “trail” commission each year thereafter. You rarely saw a bill, because the cost was buried inside the product’s charges. The trouble was obvious in hindsight: a product paying 7% commission was more tempting to recommend than an equally good one paying 3%, and the client footed a hidden cost either way. RDR swept this away and required advisers to be professionally qualified as well as fee-based.
Where commission is banned, and where it survives
Commission after the Retail Distribution Review (2026)
| Area of advice | Commission? | How the adviser is usually paid |
|---|---|---|
| Investments & ISAs | Banned | Agreed fee (percentage or fixed) |
| Pensions & retirement advice | Banned | Agreed fee, often taken from the pension |
| Mortgages | Still allowed | Lender procuration fee and/or a client fee |
| Protection (life, income, critical illness) | Still allowed | Commission from the insurer |
| Equity release | Still allowed | Commission and/or a fee, must be disclosed |
So commission has not vanished entirely, it survives in areas RDR did not cover, chiefly mortgages, protection insurance and equity release. A mortgage adviser, for instance, is often paid a procuration fee by the lender, and a life-insurance policy typically pays the adviser commission from the insurer. The crucial modern rule is disclosure: even where commission is allowed, the adviser must tell you what they will receive, so nothing is truly hidden. Our guide to getting a mortgage in the UK explains how that works in practice.
Why this matters to you
Fee-based advice is on your side
Because an investment or pension adviser earns the same fee whatever product they recommend, they have no financial reason to steer you towards one provider over another. Their incentive is simply to keep you as a satisfied, long-term client, which aligns their interest with yours.
The end of commission on investments changed the character of advice for the better. When the price is a visible fee rather than a hidden cut, you can weigh it against the value you receive and decide whether it is worth paying for an adviser at all. It also raised the bar on qualifications and professionalism across the industry, since firms could no longer rely on product commission to prop up a thin service.
A fair question is why commission survives at all in mortgages and protection. Part of the answer is history (those markets were not covered by the same review) and part is practical: a life-insurance policy has no investment pot to deduct a fee from, so commission from the insurer remains a workable way to pay for the advice without the client writing a cheque. Importantly, this does not usually make protection more expensive for you, because the premium is set by the insurer whether you buy through an adviser or direct. The safeguard, once again, is disclosure: the adviser must tell you what they will be paid, so you can judge for yourself whether the recommendation is being made on merit.
One practical action is worth taking if you hold older plans: check whether you are still paying trail commission or an ongoing charge on a policy set up before 2013. Some legacy products quietly deduct a fee for “advice” you may no longer receive. A regulated adviser can review this for you as part of an overall health-check. In short, the honest headline is that mainstream advice is now fee-based and transparent: for your investments and pension, no adviser is quietly earning a commission behind the scenes, and where commission does still apply you have the right to be told the amount before you proceed. The free Vetted Wealth service matches you with an independently vetted, FCA-regulated adviser whose charges are clear from the outset, see financial advisers. This is information and a matching service, not personal advice.
In summary
- Commission on investment, pension and retirement advice was banned by RDR in December 2012.
- Advisers in those areas must now charge a fee you agree in advance.
- Commission still exists for mortgages, most protection insurance and equity release.
- Even where commission is allowed, the adviser must disclose what they will receive.
- Fee-based advice removes the incentive to push commission-paying products.
- Check older, pre-2013 plans for lingering trail commission: this is information, not personal advice.
Sources and further reading
- Financial adviser charges MoneyHelper
- Retail Distribution Review Financial Conduct Authority
Read the full guide
For the complete picture, see our in-depth guide: Financial Advice Commission Explained.
Speak to a vetted financial advisers specialist
This is free information, not personal advice. When you’re ready, we’ll match you with an independently vetted, FCA-regulated specialist, free, and with no obligation.
