Managing your commission often feels like that one line item on your to-do list that you can never truly tick off. Yet, it’s one of the most critical aspects of successful revenue management and growth. Even so, as your business grows, so do the complexities of managing your commission effectively and efficiently. Whether you are just starting or a seasoned professional, gaining insights and practical tips for managing your commission is invaluable. That’s why we’ve created the ultimate cheat sheet to help you get started.
Understanding commission structures
Before we can dive into the dos and don’ts of effective commission management, it’s important to briefly recap the basics of how financial advisers’ commission and fees work.
In brief, there are two distinct types of commission:
Upfront commission: a once-off amount when you take out the product or investment
Ongoing commission: paid every month for the life of the product or investment
It’s important to remember that the more your commission grows and diversifies, the more challenging it is to track, manage, and follow up on individual commissions.
This becomes increasingly complex and resource-intensive when Financial Advisers want an overview of their overall commission growth and performance within a set period.
So, to help ensure you maximise each commission and manage it to align beautifully with growth opportunities, here’s what you need to do.
The commission management cheat sheet
Step 1: Error-proof your commission calculations
As revenue streams multiply, calculating your commission per client or project can be time-consuming and often prone to human error – especially with more complex commission structures. Therefore, the first step in ensuring better commission management is error-proofing and streamlining the process where possible. With the right commission management software, financial advisers can automatically calculate commissions that are error-proof and instantly accessible, ultimately helping you to improve income accuracy and better gauge your overall profitability per commission.
Step 2: Consolidate your information
Without a unified approach to commission management, Financial Advisers are left with disconnected spreadsheets, siloed data, and a never-ending task of version (and damage) control. To best manage your commission, be sure to have a single platform where all users can access all relevant data pertaining to their specific revenue streams and sources. This allows you and your team to leverage up-to-date information that accurately reflects the current state of various revenue streams, aiding your daily and future financial goals and objectives.
Step 3: Leverage your data and analytics
Just because you can’t see it doesn’t mean you aren’t sitting on a potential goldmine of rich data and analytics. One of the critical reasons behind better commission management is to go beyond simply tracking and assessing your commissions; you’ll also want a comprehensive overview of the growth and development of your commission streams concerning business growth over time to identify opportunities for improvement. To do this, you need software that provides thorough analytics reporting and allows you to view and assess various reports that dive into the different aspects of your commission structure and performance.
This includes being able to:
- Identify areas for improvement
- Pinpoint unusual spikes or dips in incoming revenue and
- Develop responsive strategies and plans of action
Manage commission and fees beautifully with Commspace
Turn commission management into your greatest tool. Equip your team with software to run their commission management on autopilot through cloud-based accessibility, automatic data aggregation and classification, advanced revenue analytics, and detailed, customised reporting capabilities.
Turn commission management into revenue mastery with the ultimate solution for managing, tracking, splitting and analysing Financial Adviser revenue.
