“It’s about 70 per cent fees. It has turned around from being 20 per cent in favour of fees about five years ago, moving with the trend towards more fee based services. I think the reason for this is more professionalism in the industry, and planners are confident of the quality of advice they give.
There is still some resistance to charging fees. It’s a commitment the adviser has to make as to whether or not to rely on commissions or charge fees, now with the growth in professionalism of the industry in the last five years.”
John Coppack, CFP
Client Adviser
Morgans Financial Planning
“The proportion I have in my practice is 95 per cent commission and 5 per cent fees. It hasn’t changed much for me, I’ve been in this business for 30 years and things don’t always need to change.
I see this new breed charging fees and some of them charge exorbitant fees for a minimal amount of work, I charge about half the amount in commission that they do in fees and I’m happy with that.
I have heard of new products being offered with no upfront or trail commission and a fee of one per cent and if people want to roll out these products I can’t see why not.
However I think fees can be a rip off. I don’t believe in fees, it takes the incentive out of wanting to work. We need to have an incentive to do things, just like an old dog. At this stage I don’t think fees will dominate totally.”
Gerry Porter
Director
Securepac Financial Group
“I’d say about 99 percent commission and one per cent fees. The only fees I charge are for salary sacrificing, and that’s only been done recently. Most of the work is remuneration on investments. I’ve worked here for 11 years and it’s always been commission. I would never charge fees, it is impractical and silly.
Commission is far better, as clients can come and see you at any time and at any place. It’s more practical and most clients find that as well. Fees are stupid and I think moving towards a dominated fee based revenue is ridiculous. I think those companies are going to lose out in the long run.
With commission there is an income stream, you provide a good service and it is cheaper for the client. It’s also a better system as I don’t need to bother about sending out accounts, and the record keeping is far easier.
There is a positive response from clients with charging commission. I don’t need to ask a client to come and see me, and then tell them I’ll charge $300. Some clients do demand more time than others, but it averages out and you still give them the same service. I’ll never move over to charging fees.”
Colin Noble
Financial Adviser
Bridges Personal Investment Services
“At the moment we have 40 per cent fees and 60 per cent commission but this has moved from five years ago when we were 100 per cent commission.
The practice has a long term objective of having 100 percent fees. At the moment we’re not sure of the format and are still looking to see what is the best way, but our goal for being 100 percent fee based is December.
I think the move towards a greater proportion of fees shows you are giving good service, you’re qualified and you are looking after your clients. I think it also shows a driving out of the industry of the people who don’t warrant the money they are earning.
Charging fees removes the focus on the product and places it more on the client’s perspectives. Years ago the focus was on the products, and you could only offer the ones that your practice provided. Now I can use 95 percent of the complete range products available.
While the industry is moving this way, I believe there are people out of it and people significantly behind us. I like to think we are above average in what we are trying to do.”
Andrew Rocks
General Manager
Gainsworth
