Hargreaves Lansdown, the UK-listed financial advisory and investment firm, is overhauling its advisor remuneration structure to retain its independent status under changes coming under the UK regulator’s Retail Distribution Review, Money Marketing reports.

Under the changes, the firm will pay its advisors a salary as well as charging clients a fee depending on their assets, the report said. The firm is aiming to have new contracts in place by April.

“We are well on the way with what our consultants’ contracts will look like. In the next few months, we shall propose they get a salary and they will make a straightforward charge to the clients.The consultants will get a bonus depending on quality of their advice and lack of complaints against them. It will not be a commission but the straightforward chance to earn a discretionary bonus,” Peter Hargreaves, the firm’s chief executive is reported to have said.

Under the RDR’s proposed reforms, which are due to come into force at the end of 2012, advisors wishing to be designated “independent” will be remunerated on the basis of pre-agreed fees.

Advisors will also have to demonstrate that they are giving objective advice which is based on a comprehensive whole-of-market review of available products – including structured and insurance-based products. Critics are taking particular issue with this last condition, as they say it could force advisors to advise on products that lie outside their expertise or that they are not happy to recommend.