Commonwealth Financial Planning offers new deal
Commonwealth Financial Planning has rolled out a new business model in which planners are self-employed while the dealer group retains ownership of the client book.
Commonwealth Financial Planning’s new 'self-employed total revenue share model' will be targeted at senior financial planners, a statement from the group said.
While planners who operate under this model will have management rights over their businesses and share in the revenue stream created by it, the dealer group will retain overall ownership of the client book.
Financial planners have traditionally looked for revenue from their businesses both during times of operation and from an eventual sale of the business.
Taking revenue from a practice sale would not be possible under Commonwealth Financial Planning’s new model, but general manager Tim Gunning believes this will not represent a hurdle in an environment in which financial planners are starting to question the value to be generated from future business sales.
Gunning said many planners are now recognising the failure of some equity models and as a result are seeking more revenue throughout the life of the business.
There are currently 18 planners in 15 practices across various states operating under the model. Gunning hopes to see that number double over the coming 12 months.
For senior planners already operating on a salary basis within the group, the model creates an alternative career path, Gunning said. For those joining the group from another business, it represents a source of new business. This would be attractive for many planners who are finding it difficult to attract new clients, Gunning said.
Planners moving internally can take a selection of their current client base, while those joining from elsewhere can combine their existing customer base with a book of Commonwealth Financial Planning customers, although this would mean signing ownership of their current clients to the bank.
Planners who operate under this model will have access to services offered by the dealer group, including client communication and marketing support, access to financial planning software, professional development courses as well as support for a ‘capital fit out’ of a practice.
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