Ashcourt Rowan defends in-house payment structure
Ashcourt Rowan Financial Planning has defended its payment structure which offers advisers 2 per cent commission for recommending its in-house discretionary service to clients.
The maximum adviser charge for the discretionary service is 3 per cent and Ashcourt Asset Management pays the 2 per cent “referral fee” to advisers on top.
The firm says it has offered the payment for a number of years. Last year, it added an adviser scorecard as part of a move to a “performance-based culture”.
The scorecard holds advisers to account for all the business they write against eight key objectives, including new business revenue targets based on fees paid by providers to advisers as well as client fees.
Ashcourt Rowan director of financial planning Chris Williams says: “Our overall service is best when our discretionary service works in conjunction with our financial planning service but we are not incentivising our advisers to recommend internal funds. It is about making sure there is a level playing field for our advisers with the discretionary service and the external market.
“It is not more than they would be able to get by recommending an external product or provider and getting 5 or 6 per cent.”
Williams says the company is likely to remain independent after the RDR rather than moving to a restricted model but it has not made a final decision yet.
PageRussell chartered financial planner Tim Page says: “I would be interested in what the FSA would say to Ashcourt Rowan about how it is going to have this structure and maintain independent status after the RDR.”
Philip J Milton & Company managing director Philip Milton says: “Firms have to cover their costs and incentivise advisers but this seems quite a chunky charge that will filter down to the client.”