Fee Transparency & Ethical Justification

This criterion assesses the organization's commitment to transparency and ethical justification in its fee structures and billing practices. It evaluates whether the organization clearly communicates all fees, charges, and potential costs to clients before services are rendered using standardized 'Key Facts' disclosures. It ensures that clients fully understand the basis for fees, including any performance-based incentives or potential conflicts of interest, through mandatory comprehension checks. The criterion evaluates the ethical justification for fee structures, ensuring they are fair, reasonable, and proportionate (Al-Kharaj bi al-Daman), avoiding excessive or hidden charges (Sadd al-dharā’i). It mandates a formal governance structure (RACI) for fee setting, waivers, and inducements. Dispute resolution mechanisms must adhere to strict SLAs and signpost to ADR entities. Fee policies must prevent exploitation, prohibiting hidden add-ons, drip pricing, or steering driven by commissions. Where performance-based fees are used, a decision tree must ensure Shariah permissibility (avoiding Gharar/Maysir) and sectoral compliance (e.g., FRC/ICAEW rules). Late payment charges must be strictly cost-recovery based to avoid Ribā. This criterion aims to align commercial practices with ethical considerations and promote socially responsible financial services.