Our point of view
Many adviser reward plans have not kept pace with wider business changes and therefore fail to support corporate objectives in an optimal way. Sometimes, schemes also fail to align fully with regulator requirements. Poorly designed schemes can be a basic cause of low profitability, as well as a potential source of inappropriate customer outcomes and conduct risk.
Firms therefore need to review their reward programmes to ensure that they support current and future strategy – in particular that they use the right drivers and are calibrated to reflect the respective contributions to value creation of the firm and individual advisers. At the same time, highly competitive conditions in the recruitment and retention of high quality advisers require extremely careful implementation.
Our team members have carried out many incentive reviews covering all types of sales and advisory businesses. We combine deep experience of strategy, sales operations, reward best practices, financial analysis and change implementation to deliver highly effective schemes.
The client was moving from a traditional product sale focussed proposition with purchase-contingent adviser remuneration to a richer advice-focussed customer proposition, including ongoing advisory services, supported by investment in platform infrastructure and other adviser support. This required a significant change in reward components and drivers (to ensure incentivisation of the right things) and re-calibration (to reflect the change in roles and contribution).
Following evaluation of business needs and the existing scheme, proposals were developed for the new scheme which were refined in conjunction with a multi-disciplinary team (sales, finance and HR). This included financial modelling of the scheme, implementation planning and documentation of alignment of the new plan with regulatory requirements.
An effective market-competitive scheme that aligned multiple requirements and is capable of adaptation as business requirements and market conditions evolve in the future.