Towry Law is launching a “renewal buyout scheme” which will allow its advisers to forgo renewal commission and opt for a cash lump sum.
The IFA says the move is in response to market and regulatory forces which has led to reduced initial commissions. It also believes the move will help retain its advisers.
Towry Law says this type of scheme is common among tied advisers but is a new concept for IFAs. Before taking advantage of the scheme, advisers need to reach a fixed level of renewal commission.
It is intended to encourage consultants to build longer-term relationships with clients and reward them for good customer service.
The scheme will apply to all consultants and certain products, including Isas, Peps and some GPPs.
It does not include regular-premium products because tracking such small amounts of commission becomes too complex.
Towry Law managing director Miles Standish says: “I am determined to create a positive long-term benefit for our consultants who, because of their high knowledge and skills base, are approached on a regular basis by our competitors.”
Syndaxi Financial Planning principal Robert Reid says: “It seems like a very sensible move by Towry Law. It will improve the income stream and this is what IFA firms will be judged on.”