Dealer group transitions to fee-based model

A dealer group has ditched grandfathered arrangements ahead of the 2021 deadline and transitioned the majority of its network to a fee-for-service model.

ASX-listed Centrepoint Alliance moved 200 out of 226 of its financial advice firms to a new "transparent pricing arrangement" effective July 1.

The new service offering, which was launched in March 2019 and has since completed the transition phase, was part of a broader restructure when Angus Benbow was named chief executive last year.

The fee-for-service model will assist in mitigating the impact of the Hayne Royal Commission to remove grandfathered rebates by January 2021, Benbow said, adding the old revenue model was largely driven by grandfathered volume rebates and vertically integrated products.

"After a phase-in period, the services we provide to our advisers will be fully funded by transparent fees paid directly by the advisers' firms," he said.

"This is an important milestone because, over time, the new fee model will remove the company's reliance on grandfathered rebates."

Benbow did not disclose the details of the new fee-for-service arrangements but flagged that in the second half of FY19, grandfathered rebates reduced significantly.

This further validates Centrepoint's refresh strategy to move to a contemporary offering, he added.

"Our new offer is also resonating with the external market and proving its competitiveness. We are delighted to welcome a record number of new advisers to our licensee community in the June quarter," he said.

This story was updated at 4.00pm.

Read more: Angus BenbowCentrepoint AllianceRoyal Commission
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