At the IFP conference in Manchester this week, managing director Brett Davidson said advisers should be making the transition to the new model if they want to increase the value of their business.
He said successful new model companies know where they add value to the business and segment their clients, often culling the bottom 10 per cent of their client base.
He said: “That’s quite difficult for many people to do but if you want to be hard nosed and really focus on growing the value of your business you have to consider whether your client quality is high enough to achieve what you want.”
Davidson added that the important thing about remuneration is not what form it comes in but that it is transparent and clients know exactly how they are being charged.
He said: “The new model debate is not about fees versus commission, I’m not even going to get into that. Adviser just need to realise that however you charge people, they will figure it out and you have to show how you put a quid in their pocket over and above your profit.”