There has been much talk recently about the financial services industry and in particular the way financial advisers are paid.
Some of the comments from financial and other commentators have strongly recommended the abolition of commission payments to advisers.
Despite these sorts of comments, one banker stated recently that at least 40% of his bank’s mortgages come from advisers like Thompson McNeill.
If that is true there is one thing that is certain – the banks don’t provide advisers with offices, company cars or administration support. The level of “commission” paid is determined by the bank and cannot be increased by greater volumes of mortgages referred. If a mortgage is repaid within a certain period the bank will take back all or some of the commission paid to the adviser.
As there is a risk that any harsh changes to the way advisers are paid may diminish the industry and therefore the availability of good advice, it is worth reflecting on just what the adviser does.
To guide a client through the loan and life insurance process, and deal with the implications of family trusts or other complications that might arise, requires knowledge, experience and good contacts. To advise a client on the implications of a health question and answer could just be the difference between a future claim being paid and not declined.
Despite what some commentators say we believe there is no substitute for good old “face to face” advice. As the Carole King song says “You’ve got a friend”
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