Many advisers tied into strict contracts
DUX Financial Services founder Alan Borthwick says financial advice firms should have transparent contracts with their advisers.
Wednesday, February 22nd 2023, 6:47AM 
5 Comments
by Kerry Meadows-Bonner
His financial services business, DUX was started 12 years ago, and with changes in new legislation offers two main paths for new and existing advisers in creating autonomy in building their businesses and full client ownership, or, advisers entering the industry with clear commission splits and training and assistance, and more.
Borthwick says with the new licensing, what he has been seeing is most businesses had strict contracts around client ownership and what that meant if advisers left the business.
“With things like how much they are paid, or what advisers can take with them, which can be very little or nothing.”
He says having gone through that process himself when he started out, he wanted to help others through it, so they can “leave a place they have no ownership in, have put time and effort into, and having to start again.”
“Often, advisers have to stay there (for their contract period) otherwise, they’ll lose everything - that isn’t something DUX is interested in.”
While all financial firms like to invest in younger advisers coming into the industry and may not see a real return for a few years, Borthwick says locking advisers into contracts or retaining their client base isn’t good for them or the business.
What DUX does differently is provide those transparent contracts and a clear exit path if advisers decide to move on, with no surprises on cost if they choose to stay in the industry or not.
In addition, DUX offers simple fee sharing agreements for the use of their resources for advisers wanting to join its FAP.
“You have a lot of control over your client base, so, we thought for those that want to have a deal, have some admin and client support with a team to work with is something we offer to try and appeal to both ends of the market.”
While DUX won’t be a one stop shop for many, Borthwick says they would be looking for a home for the right people who share their values.
“I think anyone who’s feeling, or is trapped, is going to make a decision sooner rather than later and they might be thinking, if I start to start again, I may as well do it now than give that firm another couple of years and give someone more clients than they won’t own.
He says, with DUX is somewhere advisers can go and have clarity on how to get a piece of the pie and own something of theirs with full transparency.
”We don’t have revenue or target obligations and I would hope it would also add longevity to those who want to manage their own exit and not be rushed because of legislation.”
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Comments from our readers
It is an organisation formed in 1927 of then successful life insurance advisers. It has widened its scope in recent decades to include investment planners. I understand that with its expansion around the world to over 70 countries it now has approx 66,000 members It does not set "sales targets"! It is an organisation that exemplifies the very best in ethics and member conduct. It had a Code of Ethics that members were required to follow before any NZ advisers group! Members willingly share their knowledge with competitors.
I suggest that before bagging an organisation that you clearly ignorant of, that checking out the website would have reduced the chance of your making wildly inaccurate statements.
Disclosure: no link to DUX here
34 year member (1974 - 2007) of MDRT and proud of it!
My comments on sales targets is more than if someone wants to come in and slow burn business growth, doing part time, or just the way they want, or sit on their renewal book and just service their client base, thats fine. i came from the pressure cooker of having to prove you did 10 first appts each week and it sucks.
i would rather let someone grow in their own time, and be good at it, than fit some 50 year old sales model.
Disclosure: very linked to DUX here :)
Love the attitude and love the fresh approach to developing genuine professionals who are able to build something of value while acquiring the skills and processes that will serve them for their entire careers.
to follow the comments trend...DISCLOSURE: A Dux fan
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Organisations like MDRT - ranking advisers by a sales target are also send the wrong message. Well done DUX - sounds like the firm to partner with.
Disclosure - no link to DUX here - just nice to feel a change in the culture of advice delivery