Thinc is bringing in contracts in the New Year that will see advisers get 50 per cent of all trail commission on life, pension and investment business and when they retire, it will pay out up to 60 per cent of the income for the longer of either the life of the policy or the life of the adviser.
The adviser will spend his final year handing over their business to Thinc, which will then bring in new advisers, avoiding client detriment.
Group chief executive Simon Chamberlain says once an adviser is no longer regulated, they cannot draw income from their client bank and if they are unable to sell their business, they will lose out.
Chamberlain says by comparison, a typical practice buyout scheme offering four times the annual turnover would amount to only £200,000 on a practice of £50,000 a year.
Chamberlain says: “If an adviser is transacting £100,000 a month on new investment business, over 10 years, they would have invested around £12m. With approximately 5 per cent annual fund growth and 0.5 per cent trail, this would build up an annuity of £50,000 for life. This compares with some buyout schemes that buy them out on the cheap.”