FCA UK Regulation Exam Practice 2025 – Complete Preparation Guide

The correct answer highlights that an introducer can pay only the fees that are necessary for service provision on behalf of a client. This is aligned with the regulatory framework established by the Financial Conduct Authority (FCA), which emphasizes transparency and the need for fees to be reasonable and directly related to the services being provided.

In practice, this means that any payments made by the introducer should be strictly for services that directly benefit the client, ensuring that the introducer's role is not compromising the integrity of the financial services transaction or leading to conflicts of interest. This regulation aims to protect consumers from hidden costs or unapproved service charges, reinforcing the notion that clients should be aware of what they are being charged for.

The other options, like utility payments, marketing fees, and referral fees, do not fall under this category as they either pertain to unrelated services or could introduce potential conflicts by incentivizing behavior not aligned with the client's best interests. By focusing on necessary service fees, the FCA ensures that the financial market maintains high ethical standards and prioritizes consumer protection.