The new structure will be implemented from 1 February 2015 and is set to be based on each firm’s quality rating and business volumes as of 31 December 2014.
The privately-owned network said the move will cut overall member support fees at both firm and adviser level by around 17% and is a bid to spread the cost of monitoring advice more fairly. The firm asserts the move will see two-thirds of members paying less for their membership in 2015 than the previous year.
The firm said the cost of its Professional Indemnity policy renewal has risen and will be reflected in a PI recharge and to stimulate internal recruitment within adviser firms the adviser support fee for any newly recruited advisers will be waived throughout 2015.
In July, the restricted network set aside an additional £154,000 to cover excess payments for claims brought against the firm in 2013, its accounts show.
The extra £154,000 has been added to the previous balance of £630,000, leaving a total amount of £677,000 the firm believes it will face in specific claims already brought in relation to mortgages, protection and investments & pensions.
David Carrington, marketing director of Personal Touch (pictured) said: “The whole concept of the traditional network model has been shown to have failings in recent times but our new strategy of ensuring the best adviser firms with high quality standards are rewarded and not forced to overpay and subsidise others is something we believe will provide greater clarity and fairness.
“Over the past year we have continued our commitment to reduce overall business costs whilst delivering service improvements – such as ensuring all advisers were fully prepared for [the Mortgage Market Review] MMR and launching a new and continually evolving fact find,” he said.
He continued: “Our ability to attract and retain advisers whose ethics and culture match our own desire to put quality first is paramount to our future success and profitability. The majority of our advisers will find their new fees are lower for next year and we will work with those that may see a small increase to improve their quality ratings and bring their fees down as quickly as possible.”
The company’s pre-tax profits increased from £399,000 in 2012 to £483,000 in the year despite a dramatic fall in adviser numbers and turnover.
