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‘Get off the commission drug’

Burns-Anderson is encouraging its members to move to a fee-based model and has branded up-front commission as the heroin of the industry.

Speaking at the network’s annual conference in St Andrew’s Bay last week, finance director Peter Coleman likened initial commission to the drug, saying it provides immediate gratification and short-term benefit but ultimately it has destructive tendencies.

He said in order to achieve a better perceived sense of professionalism, the industry needs to move towards an increasingly fee-based model and drop reliance on initial commission.

He said advisers need to move towards renewal commission and added that renewal payment streams of the network’s members have grown by over 20 per cent in the last three years. He said firms that adopt this model will see a threefold increase in their income.

Coleman said that Burns-Anderson believes that IFAs should also view building ongoing value into their businesses as an important part of their exit strategy, saying that many will not be able to sell their business or will do so for a poor multiple of their underlying client assets if they do not.

He also dismissed recent and ongoing claims from some support service companies that the network model is dead, saying that Burns-Anderson, which is almost 20 years old, is stronger and more successful than it has ever been.


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