SEALCORP-owned advisory groupsSecuritorandPactwill rebate 100 per cent of client fees paid to them by cheque back to advisers, creating a fee-for-service model within the group.
Sealcorp’s head of distribution Dan Powell says the arrangements have been in place for some time with a number of advisers, but this move makes the arrangements formal and available across all advisers in both groups.
Under the new arrangement, clients will pay the adviser fee to the dealer group, which will then rebate it back to the adviser without removing any funds whatsoever. This marks a departure from the previous model where a percentage of the fee was removed based on a productivity model established in the groups.
Powell says clients must pay the dealer first because of regulatory conditions.
“This is a good answer to those advisers who want to charge fee-for-service but not use remuneration systems that go through product providers. We are not removing the dealer split or collecting a percentage on any commissions earned,” Powell says.
The move has been in response to demand from advisers, as well as the growing levels of consumerism in financial services, Powell says, while also offering advisers the choice of charging via fee-for-service or commissions on an individual client base.
While the model will now be widely available it is not compulsory, but Powell says a number of planners, including a strong base of accountants in the group, will find the new approach more suited to their businesses and client base.
Advisers in Securitor and Pact currently pay an annual dealer group fee for services from the group and Powell says the move to rebate full client fees to the adviser would not impact the annual fee.
However, he says if there is a growing number of advisers who make the shift to the dealer fee-free service then both groups would examine the level of annual fees, but Powell says this type of review is likely to be some time away.
