What changes
Most mortgage and protection advisers are paid per transaction. On mortgages, that’s usually a procuration fee from the lender, sometimes with a fee from the client as well. On protection, it’s usually commission from the insurer, often paid up front and repayable if the policy lapses within the clawback period. That model rewards the number of cases completed, not the quality of the ongoing relationship.
Procuration fees and commission can stay. Repricing is about looking at each thing you do, asking what the client values and making sure the way you’re paid matches it. For some firms that will mean a clearer client fee structure. For others it may mean a disclosed ongoing service, such as always-on reviews and an annual protection check, alongside the case-by-case income. Scaling means using the time AI frees up to look after more households properly, not to rush more cases through.
Why it matters now
As AI makes product research cheap and lenders make simple switches easier, clients will question fees for work they can see is automated. Consumer Duty already asks you to show that what clients pay represents fair value for what they get. A firm that can point to regular reviews, clear evidence packs and a named adviser on call has a much stronger answer than one that is only visible at application.
Checklist
- Map what you’re paid for each case type. Use your Move 1 figures to set procuration fees, client fees and commission against the time and value involved.
- Review your fee disclosure. Make sure clients are told clearly, before they commit, how you’re paid and what any fee covers, in line with your MCOB and ICOBS disclosure obligations. Update your fair value assessment to match.
- Talk to your network or compliance support before changing anything. If you’re an appointed representative, the network’s rules on fees and services apply.
- Design one ongoing service and test it. Write down exactly what the client gets each year, how it’s priced and how it differs from what they’d get anyway. Offer it to a small group and ask what they think.
- Set a capacity target per adviser. Decide how many households each adviser can look after well with AI support, and track it quarterly.
Illustrative example
Illustrative example: before AI, an adviser completes 10 cases a month. After Move 3, with less admin per case, the same adviser completes 14 cases a month without longer hours, an increase of 40 per cent. Separately, the firm tests an optional annual review service with past clients. If 200 households take it up at £8 a month, that’s £1,600 a month, or £19,200 a year. Those figures are for illustration only. Your own price must reflect what the service includes, be disclosed clearly and pass your fair value assessment.
Common mistakes
- Charging for something the client would get anyway. If the lender will send the same switch offer for free, an ongoing fee needs to add something real, such as advice across the whole market and a protection review.
- Changing fees without telling existing clients clearly and in good time. Any change to how you’re paid must be explained before it applies.
- Using freed-up time only to take on more cases. Some of it belongs to the clients you already have, or the relationship doesn’t improve.
Coaching your clients
Be open with clients about how you’re paid and why. Many don’t know that a broker is paid by the lender or insurer, and explaining it builds trust. Clients are also seeing their own work change, and some will face lower or less regular income. A review service that helps them plan for that, including what happens to their cover, is easier to value than a fee attached to a form.