As a financial adviser, commissions are often so intricately woven into your income that there’s an undeniable pressure to sustain or boost performance. However, despite best efforts, one thing can chip away at the value of hard-earned commissions without mercy: inflation.
But that doesn’t mean that your hands are tied. With the fast-evolving advances in fintech, there are a variety of strategic ways to adapt to the rate of inflation in a way that protects your income.
Cue commission management software.
Regarding commission management, it’s essential to understand that if you’re not actively adapting to inflation, you’re essentially losing money. How? Unfortunately, if your commission earnings remain stagnant while prices rise and inflation takes its toll, your income will effectively diminish. Though you may feel comfortable with your initial income, without a strategy to adapt to inflation, your income is unprotected against inflation’s rising and inevitable cost.
However, financial advisers don’t have to settle for being passive agents, especially regarding their personal finances and commission earnings. Here are a few ways commission management software can help adapt and protect your income against inflation.
How can commission management software be used to protect your income against inflation?
Now, we may be biased, but when it comes to surviving the inflation rate, commission management software provides the necessary shield against the impact inflation can have. Financial advisers can ensure their earnings stay resilient despite rising prices with the right software. It achieves this by adjusting commissions to counteract inflation.
This gives advisers a proactive opportunity to maintain their clients’ purchasing power and financial well-being, positioning them to effectively navigate the challenges posed by economic fluctuations. Here’s how.
Real-time commission adjustments
When managing commission adjustments, advisers need quick access to real-time data. Otherwise, they’ll always try to catch up with the ebb and flow of inflation. Fortunately, commission management software allows you to integrate with your financial systems directly. This integration enables advisers to tap into real-time sales, commissions, and payouts data. Access to this data allows for the insight to make immediate adjustments to commission rates or structures in response to inflationary pressures.
Dynamic commission calculations
If you’d prefer to go one step further, many commission management software provide automatic and dynamic commission adjustments based on predefined formulas, frameworks, or rules. This can include adding inflation rates to ensure all commission earnings are well-adjusted and aligned with changing inflation rates and economic conditions.
Instead of constantly chasing financial and economic reports and updates, advisers can adjust their commission management software to provide inflation alerts when inflation reaches a specific threshold. This gives advisers a heads-up to review and adapt relevant compensation plans.
As business scales, you can start to earn commissions in multiple currencies. This often adds administrative complexity to managing commissions in response to inflation. Fortunately, with the right commission management system, advisers can automate currency conversion and inflation calculations for each currency to ensure that income from various sources remains inflation-protected.
Protect your income (and your time) with Commspace
Some things are beyond your control. However, managing your commissions and fees isn’t one of those things. Protect your income, your time and your clients in one beautiful platform designed for managing, tracking, splitting and analysing financial adviser revenue.