Companies such as NAB moving towards a fee-for-service model for financial advisers risk losing some of their more entrenched planners with the strongest client relationships, according to an analysis conducted by Merrill Lynch.

The analysis, a copy of which has been obtained by Money Management, says the shift towards fees will bring benefits to some companies, but also polarise views within the planner community “shaking out some of the more entrenched planners with the strongest client relationships to other groups”.

It suggests that some clients might also baulk at paying upfront fees despite the lower longer-term cost to the client and revert to other networks.

The analysis suggests that the business models of life insurers, with high levels of tied distribution, seem to be most at risk in a move to the fee-for-service models.

It said that any change in arrangements vis a vis fee-for-service and commissions was likely to impact the planning industry the most and might actually result in higher profits for manufacturers who could end up retaining more of the value chain.