Almost 60 per cent of financial planning principals are in the process of moving to fee-based remuneration models for clients, a new survey has shown.
In a study by broker firm Centurion Market Makers (Centurion), 57 per cent of practices had or were currently moving away from commissions despite that no legislative changes to pricing methods had been introduced despite speculation they could be.
“The general consensus among respondents was that a move towards a fee-based model accompanied by a greater demonstration of the value of advice would help restore investor confidence and trust in financial advice, products and services,” Centurion director Wayne Marsh said.
Of the 61 practice principals surveyed, 11 per cent had no immediate plans to change their commission-based remuneration models, while 32 per cent were looking to incorporate both fee and commission-based options in the interim.
“Another interesting thing we noted was that no one had or was planning to move to an hourly fee rate of payment as they said it was uncommercial. Instead they have or are looking to introduce a fixed fee for a clearly defined suite of services or alternatively a fee based on a percentage of assets,” Marsh said.
Practice principals were supportive of moving away from commissions as well as increasing the standards of entry-level qualifications for planners, he said.
