M&G Wealth will shortly increase the proportion of the income it keeps from advisers coming through its academy, and who get business from the leads the company provides.
Advisers who complete the 14 months of training provided by M&G Wealth are promised around 100 leads in their first year, with the potential for these leads to become clients.
M&G Wealth receives the fee these clients pay, but passes a percentage back to the adviser.
FT Adviser understands that, from 2025, the total portion of the income from clients referred by M&G Wealth, which the company will be taking from the adviser, will rise to approximately just over 50 per cent.
It is understood that M&G Wealth will widen the range and sources of leads it provides to advisers as part of this change.
Retention from clients who are not referred by M&G Wealth will remain at the current levels.
A spokesperson for M&G Wealth said these changes made its model "more competitive".
They said: "We already reduce the monthly fees for our Academy Advisers in their first two years of giving advice, but we are extending this to three years from 2025 in order to reduce the financial burden on these advisers.
"The standard retention for initial and ongoing advice will remain unchanged, however where M&G Wealth Advice provides leads to Academy Advisers, we are increasing the initial advice fee that we retain."
The 14 month training period is comprised of 12 months of taking six exams and then a two month period of training within M&G.
Members of the academy are expected to work full-time for the two month period.
An academy member that completes all of their exams through M&G and then the two months of training will have spent £6,000 - but the cost of this is offset against the fee income an adviser generates, so M&G Wealth said no one has actually ever had to pay this.
Advisers' experience
However, this has proven a challenge for one adviser, with whom FT Adviser spoke. They completed the training in 2024, having quit their previous employment, and said they were "not making any money".
They said: "The leads they give us are mostly people responding to Facebook ads, and are people who don’t need advice. I gave up a good job to do this.
"M&G charge you from day one of FCA approval. You have to pay them for marketing, for office supplies, so many of us want to leave but you can’t leave for two years.
"One of the problems is that M&G’s products are designed for high-net-worth individuals, but the leads they give us are not high-net-worth [people]."
Another adviser, who has had a happier experience, is Ilona Castren.
