Our fee model
We chargefor thework
Most brokers are paid a percentage of your premium. We require commission to be taken out of the premium and charge an agreed fee for the work instead. You agree the number before we start, and it doesn't move because the market did.
Why not commission
The premium
moves. The
work doesn't
Premiums go up and down with the insurance cycle. They go up after a claim. They go up when your exposure increases. None of that has anything to do with how much work it takes to look after your programme.
When adviser remuneration is calculated as a percentage of premium, it may be influenced by market conditions rather than solely the work undertaken.
A fee priced against the work is how professional advice is charged for virtually everywhere else. Your accountant doesn't bill a percentage of your turnover. Your solicitor doesn't take a slice of the contract. Neither takes a cut of the number they're advising you about, because the advice is the thing you're buying.
The practical test is a hard market. When rates jump across a whole class and every premium in your programme rises, a percentage-based adviser's income rises with them, for the same work. Ours doesn't. The fee we agreed is the fee you pay.
How it works
Three steps,
no surprises
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We agree the fee before we start
Scope, and a number, in writing. You know what you're paying and what it buys before any work happens. If the scope changes during the year, we talk about it then — not in an invoice you weren't expecting.
-
Commission comes out of the premium
We require insurers to quote net — with their commission stripped out rather than built in. So the premium you're quoted is the premium the insurer actually needs for the risk.
-
You get two numbers instead of one
A premium, and a fee, invoiced separately. You can see both, question both, and compare both against anything else in the market. Nothing is folded into a single figure you can't see inside.
* There are some circumstances where an agreed fee may not work for you. In these cases we will discuss the best options with you in advance.
What sets the fee
Priced to
the job
The fee reflects how much work the programme takes to build and look after — not how big the premium happens to be.
How complex the programme is
The number of separate covers, how they interact, and how much of it needs to be negotiated rather than simply placed.
How many insurers are involved
A programme sitting with one insurer takes less running than one spread across six, with layers and different renewal dates.
How much claims activity there is
Claims are the most time-consuming part of the job. A business with regular claims needs more of us, and the fee should say so.
What you want from us
Some clients want a full risk review and quarterly reporting. Others want a well-placed programme and a phone call when something changes.
Contract and compliance load
Certificates of currency, contract reviews, principal requirements and evidence for financiers all take time, and some businesses generate a lot of it.
The size of your premium
Deliberately. That's the whole point — the number that moves for reasons unrelated to us shouldn't be the number setting our income.
The part nobody mentions
Commission
gets taxed.
A fee doesn't
This is the argument most brokers would rather you didn't hear.
A premium doesn't just buy cover. It attracts GST, state stamp duty, and in NSW and Tasmania an emergency services levy as well. Those charges are worked out on the whole premium.
Commission sits inside the premium. So when the charges are calculated, they are calculated on your adviser's income as well as on the cost of the risk. You pay duty on the broking.
A professional fee is not part of the premium, and attracts GST alone. Require the insurer to strip the commission out and the premium falls, so everything calculated on that premium falls with it.
How much that comes to depends on the state, the class of insurance and the levies in force at the time — the emergency services levy applies in NSW and Tasmania but not elsewhere, the ACT charges no insurance duty at all, and the NSW levy is currently under review. Rather than print a figure that may be wrong by the time you read it, we'll work it out on your actual programme.
A distinction worth knowing
Stripping
beats
rebating
Some fee-based advisers take the commission and then rebate it to the client. It sounds like the same thing. It isn't.
If the commission is still inside the premium when the levies, GST and duty are worked out, you've already paid government charges on it. Handing the commission back afterwards doesn't hand the charges back.
Requiring the insurer to strip the commission out before the premium is struck means those charges are never levied in the first place. Same principle, better outcome, and it's the reason we do it that way round.
Being straight about it
Where a fee
costs you
more
We'd rather tell you this than have you work it out later.
On a small, simple programme, a fee priced honestly against the work can come to more than the commission would have been. A business paying a modest premium on two straightforward policies is not a business a commission-based broker earns much from — and if the work still takes a day, the fee will reflect the day.
The fee model is at its strongest on programmes with real premium behind them, several insurers, contract obligations and claims activity. That's where the government-charge saving is material and where the work genuinely justifies being paid for properly.
If your situation is the first kind rather than the second, we'll say so at the outset and, if necessary, work out an arrangement that suits you best.
Next step
Ask what
you're paying
now
Your current broker is required to tell you what they're being paid. Ask them, then send us your schedule and we'll show you what the same programme looks like the other way round.