LEBC has decided to move away from annual bonuses and instead pay its advisers on a quarterly basis, a move that has allegedly created ill feeling between the company and its advisers.
The national financial advice business confirmed it is making a change to its bonus payment structure and will now pay its advisers in quarterly instalments over the year, instead of a lump sum in December, to allow it to “evaluate the quality of advice”.
Kay Ingram, director of policy at LEBC, told Financial Adviser: “The change to quarterly payments is intended to be a long-term feature. This gives LEBC more time to evaluate the quality of the advice, so that there is a balance between the quantitative measure of income generated with the quality of the advice.”
When asked if this move was linked to the company’s decision in September to voluntarily relinquish its pension transfer permissions, following the Financial Conduct Authority’s defined benefit market review, Ms Ingram said there was “no direct link”.
Ms Ingram added: “Like every other business in financial planning, we are facing increased costs to our professional indemnity cover this year.
“We have also had a one-off exceptional cost in having to make some of our staff redundant following our choice to drop DB transfer work.
“But the main reason for this change is to reward staff so they are not incentivised to create an income for the business, but to do so in a way that is compliant and in the interest of the client.”
The company has also increased the performance threshold at which bonuses are paid out, which LEBC attributed to increased PI costs.
But these changes have not gone down well with advisers, who were expecting to receive their full bonus this month.
An adviser at LEBC, who wished to remain anonymous, said: “I’m not happy and I’ve spoken to other people that are also not very happy.
“People have planned to have this money coming in at Christmas time and now this is not going to happen.
“We know about the issues the firm has had in the DB market, but most of us don’t have anything to do with that, so why should we be punished?”
firstname.lastname@example.org and email@example.com
What do you think about the issues raised by this story? Email us on firstname.lastname@example.org to let us know.