MLC has moved its service fee structure for self-employed advisers to a flat fee per authority holder, with additional service fee options available on a user-pays basis.
The MLC Refreshed Licensee Offer replaces the previous licensee split system structure across the Godfrey Pembroke, Apogee Financial Planning, Garvan Financial Planning and MLC Financial Planning networks.
Under the new offer, contracts with self-employed advisers will come in three tailored service package options at three different costs – namely the Licensee Services, Extended Research and Risk Specialist offers.
A range of additional services beyond any one of these package options will be available to MLC’s advice businesses on a user-pays basis.
The offer is to be presented to MLC’s Licensee Advisory Boards in late July 2005 for approval, with an expected implementation date of October 1, 2005.
It is the result of six months consultation with the MLC Licensee Advisory Boards, comprised of ordinary advisers from each of the affiliated groups.
Greg Miller, general manager MLC Licensees, described the new offer as “recognition that our advice businesses operate under a number of different business models and need the flexibility to choose the services that best meet their needs”.
He said the removal of the licensee split arrangement, in which service fees were charged to advice businesses on a split of their revenue, was a key element of the adviser consultation process.
“Advisers told us this wasn’t the right way to charge for service, as it took no account of whether there was one adviser or 10 in an individual business, and what sort of services they used,” he said.
“It also didn’t really take their growth aspirations into account, or that there may be some services we charged for that individual businesses didn’t use, while other advisers used lots of services.”
Miller said that advisers choosing either one of the service options under the new offer would “generally be paying a little less” that under the licensee split system.
However, some advisers may pay more than others under the new offer, depending on what combination of package option and user pays services they choose, he said.
“Adviser feedback also strongly indicated they wanted a range of services but wanted these packaged in different ways, which we have accommodated in the new offer,” he said.
“There was also some dissatisfaction that for historical reasons some services available to advisers within some of our networks were not available in others – which has been rectified under the new offer.”
Miller said he thought a majority of MLC’s 860 advisers are “going to choose the basic Licensee Services option, and we do know we are going to have 50 or 60 choose the risk specialist option”.
