Adviser incentives climb as wrap providers battle for market share
AsgardandMacquarie Wraphave made big pushes for new business, announcing boosted payments to advisers for writing new business into the investment platforms.
The Macquarie Portfolio Manager wrap is offering an ‘Adviser Bonus’ for planners, with additional payments kicking in for as little as $15,000 in funds under administration per client.
According to a letter sent to advisers by Macquarie executive director Neil Roderick, the bonuses are calculated daily and paid monthly in arrears, and for advisers with up to $75 million of client funds in the wrap, an additional commission of 0.165 per cent is payable.
The bonus payments rise in proportion with the amount of client funds in the wrap. The top payment is 0.275 per cent for advisers’ funds in excess of $500 million in the wrap.
In similar moves, Asgard has introduced a volume benefit to advisers using the master trust.
For advisers with between $10 and $20 million of funds in the master trust, the share of Asgard's administration fee is 7.5 per cent. This could earn the advisers an extra $7,500 to $16,000 a year on top of their normal commissions.
The top fee is based on advisers with more than $100 million of funds under advice and the rebate is 40 per cent, which can earn additional revenues of more than $450,000 a year.
Some wrap providers, such asNavigator,SummitandMLC, are officially not offering bonus payments above the standard commissions.
However, trails usually vary between 0.33 per cent for small sums and up to 0.66 per cent for larger sums in the wraps. Upfront fees can be anything up to five per cent depending on the wrap provider.
According to theAustralian Securities and Investments Commission, the bonus commissions are not illegal and the wrap providers are not breaking any laws by offering the payments.
However, if an adviser does not disclose the additional payments, then they would be in breach of the law, as the payment could be seen as a secret commission.
Recommended for you
ASIC commissioner Alan Kirkland has detailed the regulator’s intentions to conduct surveillance on licensees and advisers who are recommending managed accounts, noting a review is “warranted and timely” given the sector’s growth.
AMP and HUB24 have shared the areas where they are seeking future adviser growth, with HUB24 targeting adding more than 2,000 advisers to the platform.
Bravura Solutions has appointed a new chair and deputy chair to take over from departing Matthew Quinn, while Shezad Okhai picks up another responsibility.
Two advisers say M&A is becoming a “contact sport” as competition heats up to acquire attractive advice firms, while a lack of new entrants creates roadblocks in organic growth opportunities.
