Every acquisitive financial planning firm eventually ends up asking the same question:
“Do we need to change how we pay our advisers?”
Sometimes the trigger is organic growth slowing.
Sometimes it’s the complexity created by acquisitions.
Sometimes it’s simply that the current model was designed for a business that no longer exists.
Recently we facilitated a discussion with a group of COOs and senior leaders from UK advice businesses. The conversation focused on exactly this topic: how remuneration structures are evolving in practice.
The discussion reinforced something important.
Most firms don’t change remuneration because they want to pay advisers more or less.
They change it because the current structure no longer supports how the business actually operates.
Before redesigning any scheme, it’s worth stepping back and asking a few fundamental questions.
1. What behaviour are we actually trying to encourage?
Remuneration structures should reinforce the operating priorities of the business.
In practice, most firms are trying to balance some combination of:
- Organic growth
- Retention of existing clients
- Consistent client servicing
- Collaboration across adviser teams
- Commercial margin.
Different remuneration structures emphasise these priorities di erently.
Revenue-share models often reinforce individual production. Salary-weighted structures can support client segmentation and delegation.
The important point is this:
The scheme should reflect the operating model you want to run.Not the other way around.
2. Are all revenue lines treated the same?
One of the most common areas firms revisit is how discredited to advisers.
Different types of revenue are
Questions often include:
- Should inherited clients be treated differently to self-generated clients?
- Should internal referrals carry the same credit as externally generated business?
- How do we encourage advisers to cascade smaller clients appropriately?
Many acquisitive firms now differentiate between these revenue sources advisers are rewarded appropriately for originating new relationships.
Not all pounds are equal.
3. How do we balance “hunters” and “farmers”?
Most advice businesses have a mix of adviser profiles.
Some advisers excel at winning new clients.
Others are exceptional at managing long-standing client relationships.
Few firms formally separate these roles, but remuneration structures often need to recognise both contributions.
The difficulty comes when:
- advisers with large ongoing books generate less new business
- advisers focused on acquisition need capacity rather than larger books
Remuneration design often becomes the mechanism through which firms manage this balance.
4. What happens when you acquire another firm?
For acquisitive groups, remuneration becomes significantly more complicated.
Every acquired firm arrives with its own legacy model:
- different salary levels
- different bonus participation
- different expectations.
The instinctive reaction is often to harmonise everything immediately.In reality, most firms discover that doing so increases adviser cost rather than reducing it.
Reducing adviser remuneration rarely happens without creating retention risk.
Most successful acquisitive groups therefore move toward a target structure gradually, aligning advisers over time rather than forcing immediate change.
5. How do we recognise advisers who contribute beyond production?
As firms grow, advisers often take on responsibilities beyond client work.
These might include:
- mentoring junior planners
- leading regional teams
- supporting integration projects
- contributing to internal initiatives
Highly production-focused remuneration models can unintentionally discourage this activity.
Some firms therefore introduce mechanisms to recognise wider contributions – whether through adjusted targets, discretionary overlays or separate recognition of leadership roles.
6. Are we over-complicating the scheme?
This was probably the strongest consensus across the discussion.
The success of a remuneration model is rarely determined by the mathematics behind it.
It is determined by whether advisers understand it.
When schemes become too complex:
- advisers lose trust in the calculation
- managers struggle to explain outcomes
- behaviour becomes harder to influence.
Conversely, the schemes that tend to work best share one trait:
Advisers can clearly see where they stand.
They understand:
- what behaviours are expected
- how performance translates into remuneration
- and what progression looks like.
7. Have we considered the retention risk?
Finally, remuneration changes always require careful calibration.
The adviser market remains highly mobile.
Cutting adviser economics too aggressively can lead to unintended consequences.
In many cases the objective is not to reduce total adviser cost immediately, but to gradually reshape incentives to support the long-term operating model of the business.
Final thought
The most effective remuneration models are rarely the most sophisticated.
They are the ones that align incentives with how the business actually operates and that advisers can clearly understand.
If financial planners can easily explain how their remuneration works, where they stand, and what they need to do to progress, the scheme is already doing much of its job.
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