This positively positions Source in a marketplace that is seeing brokers’ income being reduced in some cases by half of the expected return.
Brokers who have built a book of GI business in partnership with the Source, but decide to cease to conduct that class of business or join a network who do not offer Source products, will continue to enjoy a high level of renewal commission. Whilst the broker still ‘owns’ his customer, the Source will handle all administration and invite renewals direct to customer. The Source will also handle the FSA requirements of IDD’s and Needs and Demands.
“Some of our brokers will not be able to continue to work with us post regulation for new business. Brokers who have spent time developing a renewal income stream should not be prejudiced. We will continue to pay competitive renewal commissions, handle all administration and renewal activity,” stated Malcolm Guest, managing director, Source Software Limited. “We will meet the ICOB requirements on their behalf. This provides a safe haven for brokers who wish to retain their ongoing income stream without the hassle of re broking and the resulting compliance paperwork and process.”
An adviser will be paid an initial commission as soon as a policy is in force. Renewal commissions are then paid annually. Commissions vary from product to product. While the initial commissions are valuable it is the ability to earn repeat fees through the renewal of policies that enable advisers to build a substantial income. With other players in the marketplace reducing their commission or cutting renewal commission completely where there is no new business being written – there are many advisors that may feel the pinch.
