Commonwealth Financial Planning (CFP) advisers will no longer be able to receive trail commission for insurance, under a new adviser remuneration model to be introduced in July.
The licensee is removing trail commission payments to salaried-advisers; instead offering a share of insurance renewal revenue at a flat 10%. The group has confirmed to riskinfo that the calculation is based on the individual adviser’s risk sales. The additional insurance revenue payment is a discretionary bonus, payable in addition to the advisers’ base salary, and will only be given to advisers if they pass a qualitative assessment of their performance.
According to CFP, the changes were made in preparation for the new regulatory environment, and reflected the intent of the Future of Financial Advice (FoFA) reforms. “It ensures our advisers are recognised for inherently understanding their customers’ needs and providing quality advice that meets those needs in a way that is safe and commercially sustainable,” said CFP General Manager, Harry Mitchell.
“It is designed to attract and retain advisers who want to be part of a licensee that is focused on quality customer outcomes,” he added.
Mr Mitchell said the formal announcement of the new remuneration model followed a six month consultation period with advisers and external consultants. Further announcements are expected from the group about a scaled advice model, due to be launched in May, which will provide CFP customers with the option of receiving one-off advice with no ongoing service fee.
Stopping a 10% ongoing commission to then implement a 10% share of renewal revenue ? ? ? … pardon my French but WTF is the difference – just another licensee ducking and weaving FOFA intent
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