View more on these topics

80% Of income from initial commission

Nearly 80 per cent of adviser turnover still comes from initial commission, with only 5 per cent coming from fees, according to research from True Potential.

The comprehensive research covering over 8,000 advisers from 1,357 firms, reveals that 79 per cent of adviser turnover comes from initial commission, 16 per cent from renewal commission and 5 per cent from fees.

The survey, in conjunction with Ernst & Young, shows that 56 per cent of firms have two or fewer registered individuals, 21 per cent three to five RIs and 23 per cent have over five.

Sixty seven per cent of RIs are self-employed and 33 per cent are employed by a firm. The average number of administration or support staff was 4.4.

Ninety-one per cent of advisers are IFAs, 6 per cent are multi-ties and 3 per cent single-tied.

Of the firms surveyed, 74 per cent are directly authorised, 18 per cent are part of a network and 8 per cent are part of a national firm.

The report shows 43 per cent of firms have no technology system at all or use their own spreadsheets and paper-based systems.

Only 24 per cent of firms reconcile commission electronically and 3 per cent of RIs receive daily commission payments.

True Potential says this is the most extensive adviser study ever conducted.

Senior partner Daniel Harrison says: “Until firms are able to manage their resources more efficiently in order to retain and increase profit, there is little chance that a reduction in commissions will have any effect apart from making firms leave the market – in turn, making it more difficult for consumers to get advice.”

Syndaxi Financial Planning managing director Robert Reid says: “This does not surprise me. If the companies are going to continue to pay initial commission, people will take it. I do not believe the theory that most IFAs are moving to a passive income stream. It is not a light switch, you have to phase the transition.”

Recommended

King and Platt plan online protection brokerage

Former Torquil Clark Life Insurance directors Jason King and Simon Platt are looking to launch an online protection brokerage by the end of the summer.The pair left Torquil Clark in August last year, two years after it acquired Life Policies Direct, which they founded in 1999.The online brokerage will provide advice and quotations as well […]

Meteor and Blue Sky bank on shares

Blue Sky Asset Management and Meteor Asset Management have introduced capital-protected bonds that are based on a share basket comprising five major UK banks.

L&G wins £400m fund deal from B&B

Bradford & Bingley is to hand Legal & General a £400m multi-manager mandate after ending its contract with Axa Framlington.As revealed by Money Marketing last September, the move sees L&G launch two multi-manager offerings, in the shape of income and growth funds similar to those run by Casper Rock at Axa, to run the money.The […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com