Larger IFA firms can now assess the financial impact of the FSA's "cost of advice menu" on their business, thanks to the launch of specialist software by Cboxx.
Launched just ahead of the FSA's depolarisation "cost of advice menu", the four-step Cboxx software process is designed to calculate all elements of commission and fee income for large IFAs and financial intermediaries.
Business Profiler looks at the current business profile of the firm while Income Forecasting assesses the firm's remuneration potential and options post depolarisation, and 4Cast software looks at the potential for future revenue streams.
Some of the questions which software will be able to help intermediaries answer include:
- What would be the impact of switching 10% of my client base to a fee payment basis?
- What should my post depolarisation "Cost of Advice Menu" look like and what impact will it have on my income?
- What is the impact on my cash flow if I reduce initial commission and take more (or some) renewal?
- What should our bespoke products look like from a commission and charging perspective?
- Can we afford to sell Sandler style products?
Mick Catherall, managing director of Cboxx and one of the founder members of the Exchange quotations platform, says the software acts as a 100% accurate commission reconciliation system and takes the current components of a business to calculate the expected commission an IFA firm could earn under a variety of different business models.
"IFAs need to understand where their revenue is coming from, so we integrate their back office system and provide them with a business profile based on their existing policy records and attached commission information," says Catherall.
"This information can tell the firm their commission profile, as well as which providers are used more than others – where it is relevant to panels – and then look at the latest income streams in order to forecast what their revenue will look like based on their current remuneration regime.
"We can then change the business model to assess what happens if they firm takes more or less initial commission, for example, and find out what impact this would have on the IFA business, as well as what the cost of advice menu is going to look like," adds Catherall.
Software – which is only suitable for IFA firms with 50 or more advisers - has already been through full testing with larger IFA firms as well as on advisers at Skipton Building Society.
Email Mick Catherall or telephone 0207 822 0950 for more information.IFAonline
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