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Incentives blamed for 'dog-eat-dog' culture at advice firms

More recently, national advice company Chase de Vere came under fire after it was accused of rewarding its best-selling advisers with a trip overseas.

However, Chase de Vere has disputed claims its conference was sales focused and its business was target driven, saying it was focused on client outcomes.

Of the large advice companies and networks that responded to Financial Adviser’s questions, Tenet was the only network that did not offer some form of incentive based on financial measures, sales or new business.

Among other firms and networks who responded to our questions, Quilter Private Client Advisers said salaried advisers can earn 10 per cent of their fee income annually, although this is contingent on quality and customer outcome measures being met.

Similarly, all staff at both Tilney and LEBC are salaried but eligible for a bonus partly based on financial measures and income generated. Both firms said measures such as client outcome, compliance and behaviour were also taken into account.

Despite the recent shake up of its perks culture, the rewards and recognitions programme at SJP is still partly based on sales. The new system also considers factors such as charitable work and customer retention.

Meanwhile firms within Quilter’s network are offered loans to support new firms transitioning into the business  — some of which can end up being non-repayable if a firm’s business plan meets a certain standard.

At national network Openwork, the larger the total revenue a firm generates the lower the level of percentage fee split they are charged. 

On top of this, Openwork offers an enhanced service proposition to the firms and advisers with the highest revenues. This can mean a quicker response time from the network’s compliance team and a slightly more “concierge” service from Openwork’s resources.

Tenet does not offer some form of incentive based on financial measures, sales or new business, but it does, however, use a ‘Leading Lights’ league table to celebrate advisers and firms who had both good productivity and positive customer outcomes.

Quilter’s network also distributes league tables to regional managers — which they can pass on at their own discretion — while annual business productivity tables, which rank each firm in Quilter’s network, are available online.

Tilney, LEBC or Openwork said they did not use league tables while Sanlam and Succession did not respond to any of FTAdviser’s questions.

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