Openwork is reducing the proportion of income it retains from member firms on investment and pension business written on the two platforms it uses by an average of 25 per cent.
Openwork advisers are currently being trained on the network’s two platform offerings, Zurich’s retail platform, which launches later this year, and a white-labelled platform from Investment Funds Direct Limited. The charging structure will be introduced in January but will not apply to 2Plan Wealth advisers, which Openwork acquired in July 2011.
The network takes a percentage of income agreed with each adviser firm based on the level of business they write. The level of income from the adviser charge retained by Openwork will drop by 25 per cent on average. This will broadly equate to 15 per cent being retained rather than 20 per cent.
Openwork proposition and marketing director Philip Martin says the network is able to reduce charges due to efficiencies created by the platform deals and its restricted investment propostion.
He says: “This is not about being loss-leading or encouraging advisers to join us because we are cheaper. We are running the business to reflect a sustainable medium-term position where our income is diversified away from purely what the advisers earn.”
Clearwater Financial Planning managing director Duncan Carter says: “I think this is part of a play by Openwork to try to pick up more members. I think we will start to see a land grab among other networks too.”
Openwork is also rolling out a transition programme to help advisers define their RDR charging proposition. Openwork says members can set their own level of charges but this is capped at initial fees not exceeding 5 per cent and ongoing advice fees not exceeding 1 per cent.