IOOF revamps dealer
IOOF has revamped its Winchcombe Carson financial planning group, putting in place a new remuneration structure and boosting incentives for top advisers as part of a bid to lift competitiveness and reduce conflicts of interest.
The new remuneration system will discard incentives that bias advisers to recommend IOOF products. Instead, advisers will be paid on the basis of the amount of revenue they generate, irrespective of the products they recommend to clients.
The move reflects a conscious decision to remove all potential conflicts of interest from their model, according to IOOF Investment Management general manager, retail funds, Jarrod Brown.
As an added reward, the top 25 advisers in terms of revenue generation will receive equity in IOOF.
The funds management firm is still finetuning the procedure in regard to the amount of equity to be involved.
IOOF would also consider increasing the number of advisers who could participate in the equity program.
The dealer group currently has 90 advisers, with $2 billion under management, according to Money Management’s latest Top 100 Dealer Groups survey.
The new initiatives also include a consolidation of the number of platforms available to the group’s advisers, with the majority of the existing badging arrangements being dropped.
The platform changes were aimed at saving costs, Brown said.
The broader revamp has been designed to allow the financial planning group to maintain a boutique feel, even though it is owned by an institution, Brown said.
“I’d like to think that as advisers leave the institutional model, say a bank-owned model in particular, when they think of who they should consider for a new home with similar resourcing, that IOOF will come to mind,” he explained.
“The move right across the funds management business was about truly understanding the proper drivers of the business and then making some calls as to where we did want to compete, not just participate, and where we wanted to exit. The position we are taking right now is that we want to compete in both disribution and platform,” Brown said.
The first stages of the new structure are expected to be in place by January 1, 2006, with the platform overhaul to follow soon after.
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