Wealthpoint advisers benefit from commission changes

Wealthpoint advisers can expect to pocket up to $1 million of extra revenue following changes to the group’s structure.

Wednesday, December 8th 2021, 9:53PM

The group, which emerged out of the old AMP Advisers Association in 2019, has around 50 member firms across the country.

The group’s chief executive, Simon Manning, says it made a commitment to progressively reduce member costs as new revenue lines were developed over time.

It has done this by introducing new business such as general insurance earlier this year.

Its new commercial relationship with Vero, which is also white-labelled through AMP, has performed well ahead of expectation, he says.

Manning says Wealthpoint’s general insurance advisers collectively manage over $70 million of in-force premium.

“The strong early performance of our Wealthpoint General Insurance brokerage, which operates a separate P&L from our main entity, has also allowed us to increase the commission rates we pay to qualified advisers.

"We’ve been able to increase commission rates to a level which we believe is highly attractive, especially given our members retain full ownership of the clients they place through our brokerage,” he says.

Wealthpoint also added five risk weighted investment model portfolios, in a new partnership with Consilium, for investment WRAP services. Its Consilium platform funds under management is now more than $200 million, with much of it from new client money and this has helped grow Wealthpoint’s total funds under advice to around $4 billion.

Besides a membership fee, Wealthpoint generates revenue from a ‘co-op retention’ where it retains a percentage of the commission throughput from each member business.

Under the announced changes, the top co-op retention rate has been reduced and is forecast to average less than 4.0% across all product categories when the changes are fully implemented in February. Further reductions are planned next year, with a goal of moving further toward a single co-op retention rate of around 3.0%.

Other changes include introducing a cap on any financial support that Wealthpoint receives from life and health insurers and passing on the balance as higher commission to members.

“It’s crucial that we build a great offer for Wealthpoint customers,” Manning says. “We also want to help our members build sustainable, diversified businesses. So, we’ve really focussed on initiatives that align those two objectives and deliver value to our stakeholders.”

Manning says Wealthpoint established a FAP for its members. He says the costs of this were necessarily higher in the early days, “but now we have real scale and can start to reduce these costs while delivering increased value to members and their clients.”

“Three years onwards we think we’re well placed. We believe regulatory compliance costs have not yet been fully established across the industry and some adviser groups have some way to go in discussions with their members about how they will meet the full cost of services they provide”.

Tags: AMP Simon Manning Wealthpoint