Allianz Cornhill has introduced a service to help brokers considering moving from commission to fees establish the value of their time.
National sales manager Colin Bates said that the service, which involved an assessment by an accountant, was available for its top 250 brokers. He said so far ten brokers had taken advantage the service and 18 more had organised to do so. Each broker gets a report on their business, and recommendations on a basic costing system so that they can assess client profitability.
He said it was crucial for brokers to understand the profitability of each of its clients to their business. "If you don't do that you will never understand if you're making money," he said.
Speaking at the Biba Conference seminar on fees versus commission, consultant John Baxter said that before making the switch from commission to fees, brokers needed to examine their business and design their service proposition.
He said that this was the key selling point for clients. "Don't talk cost, talk about the role you can play."
Baxter said moving from commission to fees was not easy, but he said the benefits included increased turnover and increased profitability. He suggested that brokers could test the effectiveness of the transition by initially piloting it with one product line.
