Brett Davidson saw his Australian financial planning business make significant profits after shifting from upfront commission to fee-based and trail commission remunerated advice and now he shares his guidance on ‘how to do it', through his UK business FP Transitions .
While good quality advisers remain dependent on upfront commission, the business remains dependent on this month’s business written to pay the bills. That is still a stressful and difficult position to be in as a business owner. There is a view in the IFA marketplace suggesting while you transition from upfront to renewal earnings you must ‘suffer’ a major dip in cash flows for 2-3 years. I would reject this completely and suggest a new business plan can and should be created which leads to increases in earnings year on year, while the renewal portion of the income stream is built up. To a...
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