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John Charcol ramping up its self-employed adviser division

London brokerage John Charcol is looking to ramp up its self-employed division in 2013 to aid as a retention tool and a way of bringing new blood into the business.

Currently the brokerage, which is part of Towergate Financial Group, has an employed arm made up of 35 advisers and its self-employed arm has around 28 advisers.

But it is looking to boost its overall number of advisers by at least 20 over the next 12 months, especially its self-employed division. Switching from being an employed adviser to a self-employed advisers is currently an option after advisers have spent 12 months with the firm.

It is now halving the amount of time new advisers need to have spent with its employed division before switching to self-employed to six months. It is also introducing a supported self-employed option.

John Charcol’s self-employed advisers keep between 70 per cent and 85 per cent of their commission. While compliance and IT are dealt with by the brokerage, the advisers are independent with regards to sourcing cases and support.

The supported self-employed offering will have a 50/50 commission split, but advisers will also be provided with 30 leads a month and additional support.

Walter Avrili, managing director of John Charcol, says: “It won’t be for every adviser. But for those that want the flexibility of being self-employed but with the backing and brand that John Charcol and our parent group Towergate offer, it’s an option we want to promote.”

While it has primarily been designed as a retention tool for existing consultants, it will also be targeted at graduate trainees.

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  • John Constable 20th March 2013 at 5:21 pm

    If you work for an employer in the conventional PAYE sense, then you are actually spending almost half of the year working for the Government, in terms of the taxes that are extracted from your salary.

    If you are self-employed, then maybe you’ll still be working for the Government to soem extent, but maybe only til the end of February -which sounds like a more equitable arrangement.

    The big problem is that the Government does not really like self-employed people because of the lower and deferred taxes recieved and also the increased birden of tax administration.

    So, John Charcol et al had better look closely at the notorious IR35 because that is the hammer which the Government use to try and crucify self-employed people.

  • john smith 20th March 2013 at 2:41 pm

    Charcoal probably have well trained and expetr advisers but I am sure other small brokers are similary competent. Charcoal advisers charge the most extortionate fees in the industry which they have no choice on if they are to maintain their model. how much of the broker fees are paid to the individual advisers?

  • Peter 20th March 2013 at 8:56 am

    This seems to be something of a raw nerve by the look of the comments. I do agree that a bad broker is a bad broker – its wholely unfair to suggest that because you are self employed you are bad.

    I think the moot point is that unlike accountants and solicitors etc who get paid even to advise you not to do something, the mortgage broker only gets paid if they sell something. Therefore it is with some merit to suggest that the broker could be incentivised to give the wrong advice if it means the deal goes through – even the best broker could be tempted to cross the rubicon.

    As professionals it seems that whether employed or self employed the remuneration of professional mortgage brokers needs to change to reflect professional status maybe as has gone on with investment advice for example.

    Commission does smack of the bad old days and I think broking has moved way beyond that now.

    Just my thoughts.

  • Happy Broker 19th March 2013 at 1:18 pm

    How Charcol’s deem to run their own business is their concern and no on elses. They should be commended for allowing their advisers the chance to see if self employed works for them. I am amazed that it is still a crime to earn a good living from being a fiancial adviser. If you don’t like us then don’t use us but I have many happy clients and this is borne out by no comlaints in 26 years of being an adviser and working purely off referrals. Clearly my clients do not mind if i earn a reasonable wage for doing a good job

  • Walter Avrili 19th March 2013 at 11:04 am

    Whilst I have been taught never to respond to mere conjecture and rumour, I feel compelled to do so.

    The structure we have put in place is a well thought out and implemented reaction to society as a whole, rather than any measure of confusion. People are demanding more and more freedom these days when it comes to how they live their lives. They want to work to live, rather than live to work. And they want to take responsibility for their own destiny. To be able to stand up and be counted on their own is an admirable trait and one that I believe should be commended. We are merely facilitating this for those that are right for it.

    Our self-employed division has been running for some 8 years now and is home to some of the best advisers our industry has to offer. They have outstanding records in client service, quality of advice and are a genuine pleasure to deal with. The surveys we conduct every single month with clients show that this division has a Net Promoter Score in the low 90’s which is, quite frankly, breathtakingly good. Everything points to clients getting even better service and advice from self employed consultants. I would be utterly foolish to ignore this.

    Out interim package is merely that. It’s a stepping stone to self-employment that allows people to see if that life is right for them. They won’t stay there forever, but it is a sensible way to allow advisers to progress their career with some inherent comfort that they haven’t radically changed their own life overnight. Psychologically, that is understandably important for responsible people.

    What we have now at John charcol is a clear career path from start to finish, that is backed by large numbers of enquiries and the best brand in the market place. As i have already said, I think it is compelling and gives advisers the best of all worlds whilst ensuring clients receive an unparalleled level of service and advice.

  • The Cynical Broker 19th March 2013 at 10:56 am

    Amazing that even now folk don’t seem to realise that a bad broker is a bad broker, be they employed or self employed, it makes no difference.

    Essentially this is a company that is trying to find a way to offer employed staff who wants to go self employed a more sensible way to ease into it? This company will then support their new self employed consultant with 30 leads per month, to help with the transition and lessen the need to scavenge for deals. I can’t see why this is felt to be a bad thing ???

  • Michael Morgan 19th March 2013 at 10:21 am

    This is more of a retain at all costs exercise rather than ramping up. JC have a dwindling sales force and unfortunately seem incapable of retaining especially their employed advisers. The brand is still good but neither the company nor package is when compared to its peers.

  • Michael Morgan 19th March 2013 at 10:12 am

    This is more of a retain at all costs exercise rather than ramping up. JC have a dwindling sales force and unfortunately seem incapable of retaining especially their employed advisers. The brand is still good but neither the company nor package is when compared to its peers.

  • Adrian Andrews 19th March 2013 at 9:10 am

    Aside of the impact on quality of advice it may or may not have (I don’t think any really) a company having an employed package and then 2 tiers of s/e smacks of a company a little unsure of its identity or offering. Effectively signposting that it knows its employed role is not good enough a proposition to retain/attract better brokers. All a little confused.

  • Darren Small 19th March 2013 at 9:05 am

    Chris – being “whipped” by a sales manager to hit a target in the employed world or a unscrupulous self employed broker. Both would do bad things and you can only hope that the compliance checks are in place to stop them both as they would both (in my opinion) be at loggerheads with the clients needs.
    Bad brokers are bad brokers regardless of which side of the fence they sit.

  • Tom Allen 19th March 2013 at 8:35 am

    Does anyone else find it ironic that someone whose web site still advertises lenders who are no longer with us, and claims that self-sert is alive and well, chooses to preach to anyone. Because self-cert isn’t get the deal at all cost is it?

  • Darren Small 19th March 2013 at 8:29 am

    If the adviser in question has that “get the deal done at all costs” attitude Chris, then I fail to see how being self employed is any different to employed? A bad broker is a bad broker regardless of which hat they wear. Personally having been in the industry for 20 years I felt the shift from John Charcol employed to the self employed arm simply gave me freedom to manage my business how I saw fit whilst retaining the John Charcol recognised brand.

  • Darren Small 19th March 2013 at 8:28 am

    If the adviser in question has that “get the deal done at all costs” attitude Chris, then I fail to see how being self employed is any different to employed? A bad broker is a bad broker regardless of which hat they wear. Personally having been in the industry for 20 years I felt the shift from John Charcol employed to the self employed arm simply gave me freedom to manage my business how I saw fit whilst retaining the John Charcol recognised brand.

  • Chris Gardner 18th March 2013 at 10:30 pm

    At anon, you have a very fair point – that was the way it was back in the day – however that makes us both qualified to judge on this subject does it not?

    I am not making a case either way but you must agree that for some the need to earn comm could very easily be at loggerheads with the needs of the customer…..

  • Darren Small 18th March 2013 at 5:56 pm

    If the adviser in question has that “get the deal done at all costs” attitude Chris, then I fail to see how being self employed is any different to employed? A bad broker is a bad broker regardless of which hat they wear. Personally having been in the insustry for 20 years I felt the shift from John Charcol employed to the self employed arm simply gave me freedom to manage my business how I saw fit whilst retaining the John Charcol recognised brand.

  • Sergio Almeida 18th March 2013 at 4:59 pm

    I have to say that the comment from Chris is rather laughable. Assuming that this the same person I am thinking of, when working for him as an advisor, we used to be paid a basic of less than £10K, practically self-employed to be fair!

  • Tom Cleary 18th March 2013 at 4:29 pm

    Chris – For once, I absolutely agree with your sentiment.
    We all want to be seen to be more “professional”, akin to solicitors etc but we dum our industry and ourselves down by inducing advisers to opt for self-employed commission only packages. The main concern must be client outcomes and deals like the above surely fly in the face of TCF?

  • Chris Gardner 18th March 2013 at 2:09 pm

    Is it me or is it just indicative of the ‘two bob’ approach to FS employment?

    On the one hand we dont want consumers to get the wrong advice so enforce tight regulation of firms etc, then on the other hand we allow ‘eat what you kill’ remuneration schemes for those advising customers.

    To me this approach only engenders one thing: self servitude and a ‘get the deal done at all costs’ mentality.

    Sure, the file may look right after the advisor has scrubbed it up to look compliant, but is this really what the industry needs after everything thats gone on?

    Debate.