title: Compensation description: [AFW M.3] The unique and custom designed compensation system of IP/AdvisorFirst developed from 34+ years of experience in building sales teams. published: true date: 2026-06-30T08:08:35.251Z tags: editor: markdown dateCreated: 2021-05-07T02:15:56.653Z

Features of Our Compensation System¶

We give people from all walks of life the opportunity to become financially independent. We were built to give you a chance to win, and to put your family in a position where no one can ever pressure you. However, it is not free - you must work for it. We call it performance pay.

If there is one company that exemplifies laissez-faire capitalism, it is this one. For the right kind of people, this is the greatest opportunity in the world. This company is built the way companies are supposed to be built - the kind that people in other countries can only dream of. Here's a place that doesn't judge you by college degrees or IQ scores, but on performance only. If you produce we'll pay you a ton of money. If you work hard with us, we won't let you down. If you do what you need to do, you get a chance to become an entrepreneur, be successful and really be in charge of your life for once. We don’t care if you wear fancy designer clothes, who you know, what your last name is, or how much money you have, instead we’ll pay and promote you based upon results. We hire ordinary people who have the hearts of champions, because it's been proven that they're the only ones who really get the job done. There's never been a test devised that can measure the heart of a man or woman. So we judge individuals by their merit, not by what they look like. We’ll you give you a chance to become somebody.

• For the full commissions schedule and calculators visit the AF Master Spreadsheet.

• You get paid the commission based upon the level you are the moment the revenue flows through the B/D.

• Securities example: you close an IRA as a 30%-level. Three years later you are at 60%, and your IRA client rolls over his $500,000 401k into the IRA you opened three years previously, you get paid at 60%, not 25%!

Four Types of Securities Compensation¶

1. One-time investments. initial contributions and rollovers / 1035 exchanges, subsequent contributions.

2. Automatic Contributions (PAC). A family sets up two IRAs and fully-funds them on a monthly basis - \(916 / month**. The GDC is **\)45. At 50% you would earn \(22 every month**. If you develop four such clients every month, after one year your monthly commission will be **\)1,056 / month!

3. Residual. Trails, renewals and fees are a continuing income on all your assets under management (AUM). "When you prosper, I prosper. When you suffer, I suffer."

4. CDSC Jumps. This is when you move an existing variable annuity client to another variable annuity (once the client is out of the surrender phase), and you get paid again. Always, do what is right for the client, of course.

   Watch CDSC Jumps VIDEO

Promotions Guidelines & Explanation¶

We believe in performance promotions. You don't have to wonder how to get promoted. There are no company "politics" to fight, no boss's approval to win. Our one-chart, straightforward, clear-cut and exact guidelines show you how to advance from level to leve. We don’t want to give you a promotion, we want you to earn it. We believe that experience is the best teacher.

• Revenue is based up total paid personal securities production, wic includes all forms: upfront-revenue, trails, renewals, fee-based etc.

• Once you attain a level, we will never demote you.

• No re-qualification required.

• You are responsible for tracking your revenue to determine when you've earned your promotion. Please notify Michael that you've earned a promotion.

• When transferring from another firm you can enter directly into a particular commission level (up to certain maximums) based upon proof of previous production/revenue. We will consider your most recent rolling-12-month period.

Promotion Guidelines¶

Securities¶

Life Insurance Guidelines¶

Living Trust Guidelines¶

Upfront vs Residual Securities Compensation¶

Watch AF MKOM #1716: Which Is Better: Upfront Commission vs Residual? (6/23/2026) VIDEO

Securities compensation has more choices for the Advisor than all other forms of commission businesses. The options are myriad and it is often not clear which is "best". A-share vs C-share? B-share vs L-Share? C-share vs fee-based? More upfront, less trail; or less upfront, more trail?

• It's all good. There is no "right" and no "wrong". Remember, that the value of your advice is worth multiples of what you would ever be allowed to charge for it. Sometimes you'll earn all your fees in just one day's advice.
• You will eventually want to build a residual-based income. However, you need to make enough money to stay in business long enough to benefit from your trails.
• Start your career mostly writing upfront with little or no trail, then transition into mostly residual gradually. Two good rules-of-thumb:
• earn at least $50,000.
• wait until paid off all your debt (other than your mortgage), built a strong business emergency fund, and are consistently fully-funding your retirement accounts.
• Take enough upfront compensation to pay your bills. Modulate the ratio of upfront/residual during the year and make adjusts as you get closer to the contest period. One idea is to take full-upfront at the beginning of each contest period, and once you've generated $60,000 in GDC, then take full residual for the remainder of the period.

Each individual case takes precedence over any general compensation strategy you may have. A younger couple saving long-term is a good "residual" candidate, whereas an elderly client may cater a more "upfront" compensation.

Watch VA Comp: Trail vs Upfront (2020-05-27) VIDEO

Watch Share Classes and Compensation VIDEO

Nick Murray on Compensation¶

"This becomes the statement of our value proposition: the nature of our advice, what we charge for it, and the tremendous extent to which the value of our advice will-especially at critical market turning points-exceed its cost. For of this we must always be certain: the benefits we bring the investor are worth more to his family than we will ever be permitted to charge for them." -Nick Murray

Read Nick's ATY 304 October 31 - The Lizard and Our Fee PDF

Read Nick's ATY 063 March 04 - Never Fear Your Fee PDF

Read Nick's ATY 072 March 13 - The Question The Client Must Answer PDF

Read Nick's NMS 21 - The great three-in-one value proposition question PDF

Nick Murray's Q&A on Fees¶

• From The Nick Murray Reader, pages 83-86.

Q: One side of the argument of fees vs. commissions that I have never heard discussed is what is ultimately best for the client. I do quite a bit of business in “A” shares. Like most advisors, I am intrigued by fee-based business, but I simply cannot make the numbers work. When I drop the load and add the fee, my compensation rises dramatically, while the appreciation of my clients’ accounts drops by the same proportion. How is this best for the client? I would appreciate your thoughts.

A: Yours is an important question - actually several important questions. I’m neither trying to “sell” you on fees, or A-shares. One is not “right” and the other “wrong.” They are both ethical and honorable approaches to the practice of retail financial/investment advice.

All of that said, I think your suspicion of fees and your strong belief in “A” shares is clouding your judgement, to the point where your premises and your math are at least suspect. I’d like to separate those issues, and get them out of the way, before stating my case for fees.

To begin with, you seem to be equating “best for the client” with “cheapest,” but you don’t really mean that. If you did, you wouldn’t charge anything. You know, as do we all, that some compensation to the advisor is fair. Where we differ, as you’ll see, is in our concepts of fairness.

Second, I can’t follow your math. When you apply a one percent fee (or a “C” share arrangement) to an initial investment, rather than an “A” share, it’s the advisor’s compensation which drops dramatically, and the investor’s return which rises. The crossover, on a present value basis - the point where a one percent fee costs more than an “A” share - doesn’t come for about 7 years, if my math is holding up. (If this is what you meant, I agree with you, but I don’t think it is. I took you to be saying that fees immediately ding the client to the advisor’s benefit, which is counter-intuitive.)

Those issues aside, we return to the essential issue, which to me is fairness. I believe the essence of good investment advice is behavioral: talking people - again and again, over many years - out of making The Big Mistake. The idea that a one-time commission of some percentage of the initial investment (which, with the proper behavioral advice, will multiply through the years) adequately compensates the advisor is not one that I can accept.

A fee gives the advisor a direct and very real economic interest in the outcome of his advice, for good or ill. It also - and I think this is critical - fairly compensates the advisor for telling the client to do nothing - when, as it almost always is, nothing is the right thing for the client to do.

In my book The New Financial Advisor, I pose this question to the prospects, concerning a one percent fee:

“Does it seem probable to you that I will:

1. Cause your long-term investment return to be at least one percent per year more than you might obtain on your own, and/or
2. Save you at least one percent per year in the cost of mistakes I might be able to help you not make, and/or
3. Save you at least the equivalent of one percent per year in time, energy, worry and/or record keeping?”

Please note that no one of these three services has to be worth one percent to the prospects all by itself. The question carefully - and quite correctly - asks if the prospects think that any combination of those three great gifts to a family’s financial and emotional well-being would, in all probability, be worth more than our one percent annual fee. My belief is that the answer is unequivocally yes.

There can be no valid objection to your fee. Stop looking for one.¶

• From "Ask Nick", NMI 2022-07.

Question¶

Because of your books, newsletters, suggested language, and experience in the seat over the years, I feel quite confident in the value I deliver and feel I can articulate my value quite well, particularly in the context of a fee discussion.

Obviously, clients are each wired a little differently. Some conceptually understand that, on their own, they will cost themselves way more in return than whatever fee they pay me to capture that full return, but others may need something more concrete.

I believe I constantly and rigorously top up my clients with doses of the Spartan Vitamin C Philosophy (per the June newsletter). From time to time, I wonder whether I should include in that Vitamin C references to specific advice and a quantification of the value of that advice. For example, do I simply remind them of the cash we added to equities throughout 2020 from a Spartan Philosophy standpoint? Or, do I more intentionally and specifically reference the dollar gains on that cash added and how those gains alone (that specific advice) is well in excess of the fee paid on the entire portfolio?

It seems inevitable that, in a down market, some clients will switch from referencing their ‘percent of assets' fee paid to ‘dollar amount' of fee paid—I had a whisper of this recently, or at least that's what it sounded like—and I'm wondering whether I should be equipped with ‘dollar amount earned' responses.

Nick's Answer¶

I think there are two separate (though related) issues here.

To the first: there are no repeat no circumstances under which I would gratuitously make reference to some specific event/action which purports to document how you've earned your fee. I believe that to do so would be beneath you, and would make you look defensive and weak. It is moreover a defense against an objection no one seems to have voiced yet. Much like answering questions no one has asked you, I always think this is a bad idea. I suggest you re-read (and indeed re-commit to) Scripts # 21, 22 and 23, which to my mind form a master class in constant, spirited advocacy for an AUM-based fee.

You then proceed to another objection one person may (or may not) have recently “whispered”: a nasty temptation on the part of “clients” (who are nothing of the kind) to lapse into discussion of your fee in dollar rather than percentage terms. Again, preemptively stating—out of a clear blue sky—specifically how you recently saved and/or made them money through your guidance would, to my mind, be exactly the wrong thing to do. The right thing to do is steadfastly though politely to refuse to speak to the dollars involved in any way, on the grounds that the number of dollars is both meaningless and irrelevant.

1. Your fee is a percentage of the assets; it can only be rationally assessed and discussed in those terms.

2. The value of your advice is an incalculable multiple of what you charge for it.

3. Your fee rises as your counsel directly causes clients to prosper; it falls when their account values temporarily fall. This is the pure essence of fairness. Indeed, I see it as the starkest, simplest real-world demonstration of the fiduciary standard.

4. Embracing these undeniable truths, an investor may—I repeat may—qualify to be your client. Resisting them, he/she is disqualified.

5. There can be no ambiguity here. Nor do you ever bear a burden of proof.

With respect: you seem to be expending important quanta of time and energy marshaling preemptive arguments aimed at heading off baseless and as yet unvoiced attacks on your fee. May I suggest as gently as possible that, were you to channel that time and energy into your client acquisition discipline, you would over time be both more productive and happier?

What Other Experts Say About Compensation¶

"When prioritizing your activities, focus on the ones that pay the bills first - sales. When the money is coming in from sales, a lot of other worries go away. When sales are slow, every other aspect of the business is negatively impacted. If you can take the steps to generate the minimum required revenue to keep the business afloat during the first half of your month, you'll be able to focus the last two weeks on efforts that might allow you to generate that same revenue in just the first week of next month." -Tom Hopkins

Read Francisco’s Money Speech from Ayn Rand's book Atlas Shrugged PDF

Read the essay Compensation by Ralph Waldo Emerson PDF

Splitting Securities Sales¶

We have the ability to “split” or “share” securities commissions. In order to preserve our Advisor First philosophy we have some guidelines.

• Uplines cannot split a commission with their downlines. Your override is your compensation. If you don’t want to field train a downline, don’t hire him. Exception: if the natural spread between the upline and downline is 0%.
• 10%+ spread = no split
• 0% spread = then you can split just enough to increase the spread to 10% (but not more).
• Just send an email to Jessica indicating, "On the Johnson's trade that is coming your way, please pay {upline} 45% (no change) and pay {downline} at 35% for the initial contribution."
• You can share commissions if two Advisors who do not override each other are working on the same case (such as in “cross-hierarchy field training”, or working with a referral).
• Two ways to “split”:
• One-time split on the upfront revenue of a case (preferred method). The initial, upfront revenue is shared between two Advisors, but the trails and subsequent revenues are paid only to the primary Advisor. Have the primary agent write up the case and then send an email to Jessica informing her of the one-time split, to whom its paid, and in what percentages (typically 50/50). Both Advisors get production credit for recognition, contests and promotions.
• A permanent sharing of commissions, including trails. This method will pay both agents forever. The paperwork must include both agents and they both must be present on the client appointment.

To calculate split commissions see AFMS, Sheet #7.

Override Compensation¶

• If a downline leg "passes" you in contract-level, you don't override them of course, but you do get to count their production towards contests, recognition and promotions (⅓ max per leg). And you can "re-gain" your override once you pass them up.

• If you close a sale with a non-securities licensed rep, you can change the agent-of-record on life and securities cases to the trainee once he/she is licensed! They will receive all future compensation on those accounts.

Advisor Succession Plan¶

One of the most important things you can do for your business is have a succession plan in-place in case of your demise or incapacity to conduct business - just as we advise our clients to get term life insurance. This should be easier than it actually is. At my previous B/D, in which I was a founding partner, I spent years (almost a decade) trying to get a ownership & succession plan in-place for our Advisors, but to no avail. At IP got it established in two days!

It's a one-page DocuSign, no lawyers required, written in English and easy to understand. Check out the sample image. IP truly has an Advisor-First approach - it keeps getting better and better.

• Use this Docusign template: [A-IP-08] IP Succession Plan Upon Death Incapacity.