JBWere cuts adviser commission rates
NAB's wealth management business JBWere has announced changes to its remuneration structure, which include cutting adviser commission rates in an effort to support a growth plan.
The company said it will establish a new incentive pool for advisers to be funded by a percentage of profits. As part of these changes, adviser commission rates will be cut by 1.5 per cent.
Chief executive Justin Greiner said JBWere is "taking a leading industry position in recognising the domestic and global regulatory environment, and the value that is placed on deferral of incentive-based compensation as a mechanism for risk management".
"From 1 October, a small component of adviser incentives will be deferred," he said.
The changes follow a six-month review of the group's remuneration structure, Mr Greiner said, and will support a "strong" growth plan.
"We believe these changes will cement our strategy, align the business around our strong growth plan, and importantly leverage our partnerships ethos, which has been integral to the success of this 175-year old organisation," he said.
"Under the changes, we will be establishing a new outperformance incentive pool to reward advisers and senior leaders across the firm who make a significant contribution to our business. This will be funded from a percentage of profits.
"In order to align our shareholders' interests, the firm will be retaining a small portion of revenue from clients referred to JBWere advisers from the NAB network."
The changes will also see JBWere further invest in specialist support such as philanthropic services, investment strategy and capital markets.
The news was welcomed by the Stockbrokers Association of Australia, which called the move a positive development for the wealth advice industry.
"Increasingly, we are seeing the evolution of the traditional stockbroking business model to providing clients with one-stop financial advice, including investment property, leveraged loans, listed equities and unlisted investments," said SAA chief executive Andrew Green.
"The move towards feed based on funds under advice is complementary to this evolution and will help to create a stronger alignment of interest between clients and their advisers."
Former CBA adviser permanently banned
The corporate regulator has permanently banned a former Commonwealth Bank-aligne...
Hayne devalued financial advice, says AFA
The Association of Financial Advisers has called out the Hayne royal commission ...
Brexit has inflicted serious damage, says advice CEO
Brexit has created unprecedented damage to the UK’s financial services industr...