Commission terms will vary depending on the nature of your business, for example whether you are directly regulated or are a network or national firm.
Below are answers to some frequently asked questions about commission terms.
Q: Do you offer commission on a reduced earnings period?
Yes. Bright Grey is one of the few providers that still offers commission on a reduced earnings period (REP) of two years. By choosing Bright Grey, you can benefit from receiving your total commission over two years instead of four. We know that some advisers value this option so we'll continue to offer it, as long as it's commercially viable to do so.
Q: What is the advantage of choosing a reduced earnings period?
The advantage to you of receiving commission on a reduced earnings period of two years means that you will have received the full amount of commission, even if your client cancels the plan after two years.
Q: What happens if the plan is cancelled early?
Advisers and providers want business to stay on the books for as long as possible and we calculate payment of commission on the basis that a plan will be on our books for a considerable number of years.
We are entitled to claw back a proportion of commission if the plan is cancelled in the early years. The majority of providers do this over the first four years, known as full earnings period (FEP).
However, we also have to acknowledge that a shorter earnings period creates a greater risk of the plan going off the books early and therefore harming our revenue.
If a REP plan is cancelled in the first year, we claw back the same amount of commission that we would if the plan had been a FEP. This is a slightly higher amount than set out in the standard LAUTRO tables used by the very few other companies that offer REPs. But we believe that this is a fair price for the continued availability of REPs.
Click here to see how we calculate the percentage of commission we claw back each month.
Q: If I'm not happy with a two-year earnings period can I change to a four-year earnings period?
Yes. You can choose to change from a two-year earnings period to a four-year earnings period at any time. Please contact distribution@brightgrey.com for more information.
Q: Can I choose what earnings period I want to do business with Bright Grey?
It depends on the terms of business you have with us. For example, if you belong to a network that has negotiated the option of a two-year earnings period, yes you can choose. However, if your current agency agreement with us is on a full earnings period then you can’t change to a two-year option without our agreement and your agency's permission to do so.
Q: Why is this information not available in your terms of business?
Our terms of business don’t drill down to the level of commission detail so that we have more flexibility to adapt to market conditions but still meet advisers’ needs. This allows us to offer competitive commission terms at all times.
