Mortgage News
Fifth of firms still totally reliant on commission
With less than a year to go until it is banned outright for IFAs, almost a fifth of advisory firms remain entirely reliant on commission, research suggested.
A poll of 465 advisory businesses, carried out by support provider Aim Two Three between October and December last year, found 19.9% of firms are still 100% commission-based.
Just 8% of the firms were operating on a pure fee basis, which Aim Two Three defined as those whose clients pay for their services by cheque.
Perhaps reflecting the support packages on offer, the survey results suggest network members are making better progress moving away from commission, with 15.4% still operating on this basis.
David Ingram, founder of Aim Two Three and a vice president of the Personal Finance Society, was cautiously optimistic about the progress being made.
“The bulk of firms have mixed sources of remuneration spread across fees, commission and commission offset,” he said.
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“This is indicative of real progress towards adviser charging although, at this point in the process, the fact that almost 20% of our respondents still rely totally on commission is a cause for some real concern.”