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Zan lures IFAs with big up-front sums

Zurich Advice Network is aiming to secure distribution by offering IFAs 10-year deals with an initial cash sum and buyouts of up to five times annual earnings.

Zan is offering the deals as it bids to tie up distribution ahead of depolarisation. Up-front payments are understood to be in the region of 50 per cent of annual earnings. These are guaranteed, provided that turnover is maintained for 39 months.

A deal on a business worth £400,000 a year could see an up-front payment of £200,000 and, provided that net issued fees grow at the rate of 5 per cent a year, Zan would pay up to £2.1m for the IFA&#39s business.

Impartial Group chairman Gary Marshall says: “These are pretty exotic figures. For many IFAs, this sounds like a good deal. The downside is what are the caveats in the contract and how much interference do you want in the running of your business? You have to be careful you can achieve the targets, otherwise the handcuffs may not look so golden.”

Zan spokeswoman Sandra Paul says: “It is standard procedure for Zurich Advice Network to actively recruit the best advisers around to enhance our customer proposition. Our contract does have an up-front fee because we understand that IFAs could lose fees in the short term.”


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