News.
Positive Solutions upbeat after reporting record month in April
Positive Solutions has reported strong new business figures for the opening months of 2008, topped off by a record sales performance in April.Tue. May 20th, 2008
Gross commission and fees from sales reached £11.3 million in April, the highest ever monthly figure. Total new business turnover in the first four months of 2008 was £37.6 million, comfortably above the level recorded in the same period last year.
"Despite tough trading conditions across the UK market, we have made an excellent start to the year, with our partners delivering the most productive month in our history," said chief executive Jim Reeve.
A key driver of this success has been pensions business, which has doubled since January and accounted for a quarter of the total business written in April. In the mortgage market, despite the exceptionally difficult market environment, mortgage and mortgage-related business was still in excess of 27% of Positive Solutions' new business in April.
"Although there has been an undersupply of competitive, innovative products in the mortgage market over the last few months, our first ever exclusive under the new Positive Solutions Mortgage Club accounted for an excellent £70m in lending over the six weeks it was available", said Reeve.
"These income figures and the resilience of our mortgage business speak volumes for the focus and drive of partners and the overall strength of the business model."
He said 49 advisers had joined Positive Solutions so far in 2008, half of them from a directly authorised environment. "This reinforces our view that small, directly regulated businesses are operating in an increasingly challenging environment which is likely to help our future growth," said Jim Reeve.
"But we are seeing equal number of joiners from other IFA networks and the direct sales/bancassurance channels, underlining the attraction of our proposition across the whole adviser market."
Positive Solutions chief joins AIFA Council
He brings to the trade body a wealth of experience in the financial services industry.Mon. April 7th, 2008
Reeve worked for the Zurich group for 25 years, rising to managing director of Zurich IFA group in July 2001 before moving to Barclays in April 2004 where he worked as managing director of Barclays Financial Planning.
He joined Positive Solutions as chief executive in September 2007.
Commenting on the appointment, Chris Cummings, director general of AIFA, says: 'We are delighted that someone of Jim Reeve's stature and experience has agreed to join the AIFA Council. The coming year will be a challenging one for the IFA community and the financial services industry as a whole. It is encouraging to know we will have Jim's wealth of experience and knowledge to draw upon. He will be a valued member of the Council. 'We would also like to take this opportunity to thank Tim Morgan, former AIFA Council member and Managing Director of Alexander Forbes, for his excellent contribution and wish him well pursuing his career in South Africa.'
is an on-line resource providing CPD accredited educational material that is designed to assist you in developing all aspects of your business.
Select tutorials to suit your needs and watch for the new ones that will be added every two weeks.Positive Solutions
IFAonline.co.uk02/04/2008
Private equity tax swoop may hit IFA firms
Advisers have warned that any Government moves to clamp down on private equity tax breaks must not attack the valuable business asset taper relief that has allowed IFA firms to flourish.Mon. June 25th, 2007
Advisers have warned that any Government moves to clamp down on private equity tax breaks must not attack the valuable business asset taper relief that has allowed IFA firms to flourish.
Positive Solutions Chief Executive Neil Johnson says he is concerned the controversy over the amount of tax paid by private equity firms may lead to an increase or removal of business asset taper relief across the board.
Johnson considers that the relief has helped adviser firms such as PosSol grow organically by offering staff incentives through share options that benefit from the taper relief.
Business asset taper relief allows employees to benefit from 10 per cent levels of capital gains tax, compared with 40 per cent, on assets such as unquoted share options as long as the assets are held for at least two years. After one year, the tax level is 20 per cent.
Private equity firms benefit from the relief as the profits from selling companies are classed as "carried interest" and are eligible for the same relief.
Johnson says: "My concern is that the law of unintended consequences may lead the Government to ruin one of the best ways of encouraging small businesses. This relief has been tremendously successful in encouraging entrepreneurial spirit in businesses such as IFAs and removing or lowering it would be a massive mistake that could severely damage the industry."There is a growing belief that the Government will act to increase tax levels in this area.
The Treasury select committee is currently conducting an inquiry into the private equity sector and the issue has been a high priority for Labour deputy leader candidates.
Last week, British Private Equity and Venture Capital Association chief executive Peter Linthwaite resigned after being criticised by members of the Treasury select committee and this week the committee hears evidence from a number of private equity companies.
Quarter of Positive Solutions turnover from indemnity
Positive Solutions has revealed that indemnity commission accounted for 24% of its overall turnover in 2006.
But the national IFA firm said that it was making efforts to boost its levels of recurring income.
Wed. May 30th, 2007
Positive Solutions has revealed that indemnity commission accounted for 24% of its overall turnover in 2006.
But the national IFA firm said that it was making efforts to boost its levels of recurring income.
Neil Johnson, chief executive of Positive Solutions, said that the firm has reduced its level of indemnity commission from 30% in 2005 and increased its recurring commission from 5% to around 9% over the last year.
Pre-tax profit for the company in 2006 was £332,000 when 'exceptional items' of £11.5 million were stripped out. Its turnover was £98 million.
Johnson said that the exceptional items represented payments to staff under the company?s now defunct prophitshare scheme.
He said that it was unclear whether payments under the company?s new incentive scheme, the Partnership Scheme, would be also be classified as exceptional items in next year?s accounts.Are you paying phantom advisers?
Mark Atherton on the latest twist in the long-running argument over the best way to pay for financial advice.
Wed. May 9th, 2007
Imagine nipping into your local hairdresser to pay for a haircut you didn't receive. It seems ludicrous, but tens of thousands of investors are paying for advice that they haven't received.
In exchange for recommending a product, independent financial advisers (IFAs) receive a slice of the investment in commission. The cost of this commission is routinely built into the structure of many investment products. But the estimated 15 per cent of investors who invest directly through a fund group, rather than with the help of an IFA, do not receive a rebate on the money earmarked for IFAs. Instead, it is pocketed by the fund manager.
The initial charge on most actively managed unit trusts and open-ended investment companies (Oeics) is 5 per cent, of which 3 per cent is built-in commission for financial advisers. In addition, the annual charge of 1.5 per cent contains a 0.5 per cent slice to cover annual commission, usually called trail commission. Someone investing the full annual Isa allowance of £7,000 in unit trusts could see up to £350 swallowed up by initial charges and a further £105 taken in annual charges, with IFA commission accounting for £210 and £35 respectively.
Defenders of the current structure argue that investors can cut the initial charge by using an interdiary such as an IFA, discount broker or fund supermarket. But critics say that people should be free to deal direct with fund groups at lower cost and not be forced to use a middleman to reduce an inbuilt charge that should not be there in the first place.
A growing number of advisers are now calling for the existing charge structure to be dismantled. Patrick Connolly, of JS&P Towry Law, says: "It is unacceptable that direct investors have to pay for 'phantom' advice that they do not want and do not actually receive."
This is merely the latest row in the continuing battle about whether consumers are best served by fee-based or commission-based advice.
Consumers who visit commission-based advisers do not have to pay charges directly. Instead, the advisers are remunerated by the providers of the products they recommend.
Pos Sol profits top 10m in best year so far
Positive Solutions is seeing its most successful year to date with profits topping 10m.
Wed. May 9th, 2007
Positive Solutions is seeing its most successful year to date with profits topping 10m.
PS has reported an annual turnover increase of 33 per cent, to 98m with operating profits growing 36 per cent to 10.7m.
The number of IFAs has increased 15 per cent to 1,510 with an average adviser production exceeding 70,000.
Chief executive Neil Johnson says the firm, now in its 10 year, has no intention of resting on its laurels and remains committed to offering new innovative ways of building value for its current and future partners.
Johnson says: 'These results confirm the continued success of Positive Solutions and the scalability of our business model. Our focus on cost control and efficiency has resulted once again in profit growth outstripping the growth in our manpower and turnover.
This is a fantastic performance that has put us into a very strong and secure position for the long term. As a private company we do not legally have to publish our audited accounts but we have always done so because we believe transparency promotes long-term confidence and good relationships with our stakeholders.'
Positive Solutions profit hits GBP10m
The figures show annual turnover increased by 33% to 98m, while operating profit rose by 36% from 7.9m to 10.7m, which Neil Johnson, chief executive of the firm, says is down to the "scalability of our business model".
Wed. May 9th, 2007
The figures show annual turnover increased by 33% to 98m, while operating profit rose by 36% from 7.9m to 10.7m, which Neil Johnson, chief executive of the firm, says is down to the "scalability of our business model". In addition, the results reveal the number of IFA partners in the firm increased by 15% to 1,510, meaning turnover for each partner exceeded 70,000, while Positive Solutions says it paid out 11.5m to its partners through its Prophitshare scheme.
And the company, owned by Aegon, says it is in a strong position for the long-term as at the end of 2006 it had 21.4m in cash, with no borrowing, with an associated capital adequacy surplus of more than 12m. Johnson says: "The accounts show we achieved record turnover and profit at a time when many others are struggling to achieve growth and the market has suffered continued fragmentation and some high profile collapses." Positive Solutions also says 2007 has shown a strong first quarter business performance, with continued high levels of recruitment which have taken adviser numbers above 1,600.
While recent developments by the company include the extension of its Partnership incentive scheme; the introduction of a 0% retention rate for advisers issuing more than 150,000 business and the proposed demerger of its technology arm into an independent company True Potential. Johnson adds: "We have no intention of resting on our laurels. We remain committed to improving the Positive Solutions offer and putting in place innovative new ways of building value for our current partners and those wishing to be part of the firm." IFA firm Positive Solutions has published its annual financial figures and accounts to reveal operating profit in 2006 passed the 10m mark.
Positive Solutions Adds to Flotation Points Plan
Positive Solutions has extended its incentive scheme to reward advisers with additional bonus points that will be converted into shares ahead of its proposed 2009 flotation.
Fri. April 13th, 2007
Positive Solutions has extended its incentive scheme to reward advisers with additional bonus points that will be converted into shares ahead of its proposed 2009 flotation.
The Partnership scheme will pay out 3,000 points to IFAs who write over £50,000 of business in the 12 months to September 27 and will extend the timescale for the 3,000 points awarded for recruiting or for new joiners to October 31.
Chief executive Neil Johnson says the points will be convertible to PosSol shares, with the intention to float before the end of 2009, or alternatively value the business from 2010 onward based on the firm's profit levels in 2009.
The Partnership scheme, which launched in October 2006 has so far rewarded over 900 partners with 1,000 points for issuing £25,000 in the six months to March 27. A further 100 qualify for 3,000 points for introducing an IFA recruit and more than 170 new partners were issued 3,000 points for joining business.
The firm says the scheme has helped grow its business, claiming to be the fastest growing IFA firm with adviser numbers topping 1,600.
Johnson says: "We have spent months working to create the optimum structure, with a balance of value points available for both production and recruitment and a clear path to realising value in the scheme."
Making sure all is fair
The FSA's proposals on the Financial Services Compensation Scheme are a start, but more needs to be considered.
Fri. April 13th, 2007
IFAs up and down the country have breathed a sigh of relief after seeing the FSA's proposed reforms to the funding element of the Financial Services Compensation Scheme. The revamps will not only, as the FSA claims, make the FSCS more robust, but will also significantly enhance its fairness, creating a structure that better matches cause and effect with regard to from where the scheme's liabilities originate.
At the same time, scheme levies will become more predictable, enabling firms to plan ahead - something that is generally seen as impossible under the current regime. Credit has to be given to the FSA for the proposals drafted, while Aifa's tireless efforts in bringing about these changes cannot be underestimated.
But while the proposals are extremely encouraging - they go a significant way towards alleviating the concerns and criticisms frequently flung at the FSCS funding regime - the industry cannot rest on its laurels just yet.
Consideration
There are other points that have arisen from the FSA's proposals that require further consideration, and an active voice from the advisory, and wider, industry at large.
These include the role that wholesalers should play within the new-look funding framework, as well as ensuring that the FSA remains strong in its stance on firms that seek to 'phoenix' their businesses, dumping liabilities on the FSCS in the process.
On a different tack, the proposals have also raised a question around whether the potential reforms will trigger the need to revisit the FSA periodic fee measures, to bring it more in line with the FSCS's planned approach. This is something that the FSA is currently mooting for consultation.
While this could be a good thing for the industry - potentially helping to better match the type and volume of business that a firm does with the amount it contributes in regulatory fees, as well as recognising the economies of scale that larger firms produce - it also has the potential to have less positive impacts.
To date, advisory firms have had their FSCS levy based purely on headcount - the number of approved persons in a firm determined just what the levy would be. But under the FSA's new proposals, funding contributions will be based on a firm's income - a much fairer basis for apportioning cost.
The fee is also better matched - if 50 per cent of a distributor's business is in life and pensions, then 50 per cent of that firm's FSCS fee will go towards this sector. That way, companies will not be left contributing large amounts to defaults in sectors in which they do little business.
The new 'widening circle' approach proposed by the FSA for the FSCS may be more complex, but, as mentioned previously, the scheme's fairness will be greatly improved as a result. Under the proposals, five product classes will exist, including life and pensions, investments, general insurance, home finance, and banks and building societies.
Each of these five classes will be split into two sub- classes, generally providers and intermediaries. Meanwhile, a general retail pool will exist for emergencies, only dipped into for significant defaults, or in the case of a series of failures.
When a company fails, the funds from the relevant sub-class will cover the cost of the firm's liabilities up to a specified threshold, with the rest of the money coming from the providers in that sub-class up to its designated threshold. After that, the general retail pool is dipped into.
This new system offers five-way support in meeting the costs of liabilities, a development that is wholly positive, while helping to match costs more appropriately.
What is more, the FSA also plans to consult on whether to add a fund of last resort to the widening circle, in the form of funding provided by the wholesale sector, which would add further capacity still.
Liabilities
This idea has much merit. While the wholesale sector is not responsible for providing advice, and nor does it create liabilities for the scheme, it is a great beneficiary of the advice that is dispensed and, therefore, should make a contribution.
It is also important that this sector is involved so that clients can be reassured of the industry's unity behind the scheme, providing greater confidence in the industry at large. Greater confidence in distributors and the financial services industry generally can only be of benefit to wholesalers, too.
A supplementary consultation paper on this is expected later in the year and advisers should be sure to make their voices heard on this.
While the FSA is considering whether or not to bring wholesalers into the wider circle of the compensation scheme, it is already proposing that the direct sales and advice arms of providers should be included in the funding circle within the life and pensions class, instead of the advisers and brokers having to shoulder the burden alone. Again, this is another welcome move, righting an anomaly of the old system.
The FSA's proposals mean capacity within the scheme will rise to a potential maximum of £4.4bn a year, and thanks to its restructuring, it should also become easier for advisory firms to plan ahead for the FSCS levy.
This has been a volatile and unpredictable cost in the past, as illustrated by the experience of one large IFA. The firm saw a 4000 per cent increase to its levy in the space of just three years, equating to a hefty leap from a £45,000 charge in 2003/2004, to a cost of £1.82m by 2006/2007.
This cost has been notoriously difficult to plan for because final levy figures are currently often not released until the middle of the calendar year - much too late for firms to be able to find savings in other areas of the business to cover the ballooning FSCS burden.
Now, preliminary estimates suggest a typical large IFA could save around £500,000 a year under the new proposals - a healthy 25 per cent off the current levy. Meanwhile, the FSA's move to allow the FSCS to look as far as 24 months ahead when setting its fees will enable greater planning, and is obviously a popular proposal.
Penalise
To date, the FSCS has seemed to penalise firms trying to do the best by their clients. They have been left in some instances to pick up the pieces for companies that have watched their businesses fail, dumping liabilities on the FSCS before resurrecting in a slightly different guise.
Meanwhile, a last-man- standing situation has slowly been developing as the sky- rocketing FSCS fees causes more firms to struggle and teeter on the edge of failure.
These proposals help to rectify this dangerous spiral in which the rescuers find themselves the victims. But the FSA's continued resolute stance against phoenix firms is vital to help ease the strain on fund contributors and to provide more confidence in the scheme itself.
Lastly, advisory firms, along with the rest of the financial services industry, contribute significant levels of funding to the FSCS. It therefore seems fair and reasonable that greater access should be available for these companies to view information on the scheme's service standards.
Data on the claims handling track record and the volume of claims being settled would be useful for contributor firms to view more regularly, both to keep an eye on their 'investment', while providing useful comparisons against their own complaints experiences.
So, while the FSCS funding reforms are hugely positive for the industry, advisers should be careful not to clear the issue from their in-tray just yet.
Neil Johnson is chief executive of Positive Solutions
key points
- The revamps to the FSCS will make it more robust and will also significantly enhance its fairness
- Under the FSA's new and improved proposals, funding contributions will be based on a firm's income - a much fairer basis for apportioning cost
- The FSA plans to consult on whether to add a fund of last resort to the widening circle, in the form of funding provided by the wholesale sector, which would add further capacity still
Positive certain about extending points offer
Recruits set to be given more time to add value to firm and earn rewards
Fri. April 13th, 2007
Positive Solutions is extending its incentive programme in an attempt to continue to attract financial advisers to the firm.
IFAs that generate enough business receive points which will be converted into Positive Solution shares when the firm floats, as is planned before the end of 2009. The Partnership Scheme will give 3000 points to advisers who achieve £50,000 worth of issued business in the 12 months to 27 September, which is has been extended to 31 October for new joiners.
IFAs qualify for a further 3000 points for introducing a new recruit or joining the business.
In the first six months of the scheme, 900 of Positive Solutions' partners qualified for 1000 points, after issuing £25,000 of business in six months to 27 March.
Neil Johnson, chief executive of Positive Solutions, said: "The Partnership Scheme has been a huge success during its initial period, helping us to build on our position as the UK's most profitable and fastest-growing IFA firm, with adviser numbers topping 1600 for the first time."
Positive Solutions recently announced that it had achieved its strongest recruitment performance in 10 years. It received 104 applications from IFAs and independent mortgage advisers to become registered individuals in February, and said it was on track to meet its target of 2500 RIs by 2010.
At the same time, the firm said it has an attrition rate of 5 per cent of IFAs each year, largely due to retirement. This growth appears to buck the trend of a flight of IFAs from networks, with many seeing financial advisers leaving to become directly authorised.
Mr Johnson said: "We are keen to harness and build on that momentum, so we have spent months working to create an optimum structure, with a balance of value points available for both production and recruitment and a clear path to realising value in the scheme.
"We have put into place incentive schemes that will allow our partners to reap the rewards of their own efforts to grow the value of the business."
Mr Johnson said that Positive Solutions, which is owned by Aegon UK, is unique for having always delivered on the promises of its schemes, to the tune of £136m in the past five years.
He added: "We believe there is a huge scope for continuing growth and profitability that all our partners can share in." Positive Solutions was ranked number six in Financial Adviser's Top 100 IFAs last year.
Positive Solutions enhances incentive scheme
Positive Solutions has improved the structure on its latest shares incentive scheme to provide greater rewards for members achieving business over £50,000.
Wed. April 4th, 2007
Positive Solutions has improved the structure on its latest shares incentive scheme to provide greater rewards for members achieving business over £50,000.
The changes to its Partnership Scheme, launched in September 2006, have been made in a bid by the firm to target further growth.
It works by awarding points for certain achievements made by partner IFAs, which are then converted into Positive Solutions' shares.
In the first six months of the scheme's launch more than 900 partners qualified for 1,000 points each by achieving £25,000 issued business in the six months up to March 27.
A further 100 qualified for 3,000 points for introducing a recruit and 170 were given 3,000 points for joining the business.
Under the enhanced version of the scheme, 3,000 will be given to those achieving £50,000 issued business in the 12 months up to September 2007. The incentive for new starters or for recruiting has also been extended to run until October 31.
Neil Johnson, chief executive of Positive Solutions, said the scheme had proved a huge success during its initial period and this came as adviser numbers topped 1,600 for the first time.
Johnson added: "We are keen to harness and build on that momentum so have spent months working to create the optimum structure, with a balance of value points available for both production and recruitment and a clear path to realising value in the scheme."
The schemes were launched in a bid to allow the firm's partners to gain benefits from their own efforts.
Johnson said it had delivered £136m via these kinds of schemes in the last five years. He added: "We believe there is huge scope for continuing growth and profitability that all our partners can share in."
PosSol beats record with over 100 recruits in February
Positive Solutions has announced its best monthly recruitment performance ever in its 10-year history with 104 intermediaries signing up.
Sat. March 10th, 2007
Positive Solutions has announced its best monthly recruitment performance ever in its 10-year history with 104 intermediaries signing up.
There are 95 IFA applications and nine from mortgage brokers. The firm's previous highest monthly figure for applications was 73 in June 2000. PS appointed 35 new RIs during February bringing its total to 1,566. With the 104 applications received during the month still to be appointed, it is on track to hit its target of expanding to 2,500 partners over the next three years. Chief executive Neil Johnson says: "This is a fantastic performance.
The recruitment team has done an amazing job - 230 applications have been received and processed over the last four months. The challenge for us now is to keep that momentum going. "So far this year we have seen new business levels running 35 per cent higher than at the same stage in 2006. We have had a very good start to the year on all fronts and are looking forward to delivering more profitable growth in the coming months.'
Solutions keeps IFA flow Positive
Network is celebrating after getting 104 applications to join in face of trend for advisers to seek direct authorisation.
Sat. March 10th, 2007
Positive Solutions has reported its strongest recruitment performance in 10 years and appears to buck the trend of a flight of IFAs from networks.
While many networks have seen growing numbers of financial advisers leaving to become directly authorised, Positive Solutions received 104 applications from IFAs and independent mortgage advisers to become registered individuals in February and said it was on track to meet its target of 2500 RIs by 2010.
At the same time, the firm said it has an attrition rate of just 5 per cent of IFAs each year, largely due to retirement.
Neil Johnson, chief executive of Positive Solutions, said that the firm was recruiting a large number of IFAs from a directly-regulated background who had been running their own practice. He said these IFAs were finding that the costs of running each business were too much and the changing regulatory requirements ever more onerous.
Conversely, at Sesame, the largest network, the number of registered individuals increased by just 50 from November 2005 to November last year when it had a total of 7850 RIs.
Peter Mann, chief executive of Bankhall, has said that more and more IFAs will pursue directly authorised status, describing the traditional network model as dictatorial, draconian and not economically sustainable.
This is backed by the FSA, which said that last year it had seen large numbers of IFAs abandoning traditional networks in a rush to apply for direct authorisation.
Citing the collapse of Berkeley Berry Birch and Millfield in particular, Mr Johnson said: "Large IFA firms and networks are struggling and other large players seem to be losing people who are going directly regulated."
But commenting on Positive Solutions, he said: "So far this year we have seen new business levels running 35 per cent higher than at the same stage last year. We have had a very good start to the year on all fronts and are looking forward to delivering more profitable growth in the coming months."
Mr Johnson said that the option was still on the table for a flotation on the stock market in 2010.
Positive Solutions ranked at number six in Financial Adviser's Top 100 IFAs last year.
James Brooke, financial architect for London-based Anand Associates, said: "The financial services profession continues to undergo considerable change but this is nothing new for the profession. It is not a question of networks versus national IFAs versus directly regulated; it is a question of what a particular business offers."
Positive Solutions gets huge requests
Positive Solutions IFA firm received 104 requests from companies applying to become partners in February - the biggest monthly figure in the firm's 10-year history.
Thu. March 8th, 2007
Positive Solutions IFA firm received 104 requests from companies applying to become partners in February - the biggest monthly figure in the firm's 10-year history. Of those applications, 95 were from IFAs. It means the company, which has seen new business levels 35pc higher than the same period last year, has received and processed 230 applications in the last four months.
The MM Profile: Chris Gillies
The managing director of Zurich Intermediary Group plans to spend 2007 orchestrating a comprehensive e-platform & overseeing a new protection range designed to establish it as a major player.Thu. March 1st, 2007
Part of the Zurich community for over 20 years, the managing director of Zurich Intermediary Group plans to spend 2007 orchestrating a comprehensive e-platform and overseeing a new protection range designed to establish it as a major player. He also believes in helping the wider community as a keen supporter of charities for disabled and disadvantaged people.
Chris Gillies has worked at Zurich in many roles over the past 20 years but talks about his plans like an enthusiastic newcomer.
He has been managing director of Zurich Intermediary Group, which markets its own life, pension and investment products to IFAs, since April 2004. His long-term goals include making Zurich a top-three provider in each of its markets and building better relationships with its providers but he also has a busy to-do list for 2007.
The enthusiastic musician, who plays guitar, piano and has played violin in a symphony orchestra, will conduct the building of a comprehensive e-platform which will upgrade its online presence and make it easier for IFAs to do business with the company.
He says: "The new platform, which is being rolled out in phases throughout 2007, will facilitate transaction, servicing and modelling functionality to fit whichever business model IFAs choose to use. This means functionality will be available through a wide variety of different channels, for example, through Zurich's e-portal, IFA back-office systems such as First, Quay and Plum, IFA bespoke systems such as Positive Solutions and Bankhall Online, industry portals such as Exchange, Assureweb and Webline and independent wrap platforms."
Gillies believes that 15 per cent of advisers will have fully embraced wrap by 2008.
Zurich has an independent wrap and Gillies believes this is the direction that services will take. He says advisers want the flexibility to pick and choose the best deals for clients rather than being forced to buy products from one provider and miss out on the most competitive deals.
Zurich recognises that wraps are a significant market development for distributors but it is less clear whether there is going to be a strong value add for customers. IFAs value choice and we consider that the wrap platforms most likely to succeed in the medium term are those offering a range of life and pension wrappers from several product providers. These are typically the platforms that are independent of product providers and Zurich is seeking to make its products available on as many of these as possible."
Zurich is also introducing a new range of protection products for IFAs to help establish itself as a major player in the market. Last October, it launched a whole-of-life product to complement its range of inheritance tax planning services, which has sold very strongly, and this year it will bring out an online range of term and critical-illness products which Gillies believes will perform equally as well.
The company will also roll out a new IHT planning tool and will boost its range of pension offerings to include an e-enabled, open-architecture Sipp.
Gillies says his most exciting period at Zurich came when he headed its Hong Kong branch for two years. He loved the buzz of living and working in a bustling Asian city.
Nowadays, much of his free time is spent helping the company's charity, Zurich Communities Trust, which he chairs. Last year, around 3,000 employees raised money and volunteered for the charity that supports disadvantaged people in the UK and overseas, and Gillies takes pride in that figure.
"The company makes an annual donation out of profit and encourages staff to get involved. We find the charities value a combination of money, time and skill so we really encourage people to volunteer and give something back to the communities where they live and work.
"More than 20 per cent of our staff support Zurich Cares by making a monthly payroll donation using Give As You Earn - the national average is just 3 per cent of staff. In addition to the gift aid tax relief from the Government, Zurich matches what our staff donate, making this a very effective way to support charities.
"We also support a number of major transformational programmes. The newest of these is a commitment of over £1m to a project called Breaking the Cycle in partnership with a charity called Addaction. This programme helps families where one or more family members are drug addicts and aims to break the cycle of addiction by ensuring that children and parents are properly supported."
Gillies also chairs the board of trustees for the Action on Disability and Development charity which helps disabled children in Africa and India and he regularly takes part in projects in these countries.
He also enjoys hill-walking around his home near Oxford and collecting wine, with his cellar currently containing 1,000 bottles and rising.
Born: Glasgow, 1958
Lives: In a village just outside of Oxford with his wife, two teenage children, golden retriever, two cats, a few ducks and a goose
Education: Bedford School, followed by Universities of Bristol, Montpelier (France) and Konstanz (Germany). BA (Joint Hons) in modern languages. Member of the Institute of Chartered Accountants
Likes: Planting things, teamwork, family adventures, wine, theatre, playing music, hill walking, iPod.
Dislikes: Bullies, disablism, racism, video games, vodka, beetroot, seeing Scotland lose at rugby
Drives: Audi AS
Favourite books: The Hitchhiker's Guide to the Galaxy by Douglas Adams, From Good to Great by Jim Collins
Favourite films: Lord of the Rings trilogy
Favourite album: Riding with the King by Eric Clapton and BB King
Life ambition: "To leave the world a better place than when I came into it"
Career ambition: Continue to play a key role in Zurich's future success
If I wasn't doing my current job I would be...Working for a charityPaying out for the sins of others
The entire industry must make sure that it maintains investor confidence, so it follows that it should take some responsibility for compensating customers for any failures that happen.
Thu. March 1st, 2007
The recent publication ofthe 2O07/2008 budget for the Financial Services Compensation Scheme is a good reminder of why there is a desperate need for some innovative thinking.
The current arrangements are unsustainable and both the FSCS and the FSA need to be looking to introduce a fairer system. Following last year's consultation, the long-awaited new proposals are due to be released soon.
The Association of IFAs deserves huge credit for bringing forward this review, and it is hoped their efforts will bring some relief from the financial pain distribution firms have had to endure as the costs have risen to ever greater levels.
There is no doubt the existence of a compensation fund of last resort is important to help maintain consumer confidence in the industry.
But in the past few years it has reached the point where the cost to the distribution sector of providing the fund has started to have an impact on the financial viability ofthe distributors themselves.
Ultimately, the current system raises the ugly prospect of a vicious circle where rising FSCS costs might actually contribute to firms going out of business, resulting in higher compensation payments, which have to be met by further increasing the costs on the smaller number of firms still operating.
The logical conclusion is that the last man standing has to provide redress for the problems caused by all the others.
Difficulty
With a few exceptions, the distribution sector has been having a tough time with some major company failures.
While it is doubtful that the FSCS levy alone has caused any failures, logic suggests that the increasing costs have not helped.
Indeed, the current regime has a serious flaw in that it encourages distributors to fail and penalises those well-structured, financially strong distributors who have built up a good track record of dealing with clients and their complaints.
We have seen a succession of failures dating back to Towry Law and Advizas, including RJ Temple, Whitechurch, David Aaron and Berry Birch & Noble.
What is noteworthy is that some have continued to trade with the same management, staff and advisers under a slightly different name, leaving their liabilities with the FSCS.
These phoenix firms have gained a clear commercial advantage over rivals who have been forced to foot the bill for their mistakes.
There are also IFA service provider groups, not regulated, who have appeared to encourage directly-regulated firms to follow the same track, ultimately increasing the burden for reputable, ethical distributor firms.
Doubt
Anyone who doubts the scale and impact of the increasing levy should take a look at our experience. Taking account of the Pass subsidy, in 2003/2004 our FSCS levy was £45,000 which rose to £466,000 for 2004/2005.
The ending of Pass contributed to a further rise to about £lm for 20O5/2OO6 and then to £1.8m for this financial year. That is an increase of more than 4000 percent in just three years.
While it is true that our adviser numbers were growing strongly during that time, it still equates to an increase in cost for each IFA from £82 to £1440.
These kinds of figures make a real impact on distributor profitability. We noted in our response to last year's FSCS funding review that total regulatory costs equalled 4 per cent of our turnover with the FSCS levy the single largest overhead at 2.4 percent. In companies running tighter profit margins, it is clear that this level of expense could make the difference between profit or loss, survival or failure.
The size of the levy itsetf is one problem, but this is exacerbated by the timing of the announcement. Any well-run business prepares its budgets months in advance. The levy announcement in January comes after our financial year has already started while final figures are not available until July, more than halfway through the year.
These late announcements seriously impede our ability to budget properly and to ensure we meet the stringent capital adequacy requirements we are subject to.
Turning to the latest budget announcement, we are relieved to see the levy on the A13 block that applies to most IFAs has fallen to £42m from £47.1m previously, although note the rise in the central budget to more than £32m.
But any positive thoughts are quickly dispelled by the sharp rise in the pensions review component, which has nearly doubled to £47.5m. This is particularly galling because firms who have dealt professionally with the review and met the costs are now getting a second round of costs arising from the firms who did not and went into default.
This is another demonstration of the important failure of a scheme that fails to link cause and effect. In last year's consultation we argued for a new guiding principle that assesses the risk of default posed by a distributor company and matches the levy to this risk.
There is already a good precedent for this approach with the Pension Protection Fund operates a risk-based levy.
Adviser firms should be well capitalised and profitable, with a secure business and this should be recognised when apportioning the levy - an there are example of this. Their compliance systems should be rigorous and the few complaints they receive should be dealt with quickly and effectively.
So as these firms fiercely guard their integrity and good reputations, they naturally feel aggrieved at having to pay for the sins of others.
In fact, the IFA sector as a whole has nothing to be ashamed of. The Financial Ombudsman Service reported only 14 per cent of complaints were about the IFA sector in 2006, compared with 26 per cent for banks and 45 per cent for life insurance and investment product providers.
This brings us on to the dear need for cross-subsidy from provider companies. They designed and marketed many of the products and provided the illustrations and details that distributors relied on when advising clients. There is a clear mutual responsibility because typically claims arise when products fail to perform, as we have seen with endowments that failed to produce expected returns despite the strong performance of the equity markets.
Confidence
The advice may have been a contributory factor in any loss suffered by the client, but the core problem is with product failure.
If one of the key aims of the FSCS is to ensure long-term confidence in the financial services industry, providers need to play their part. In the past, we had the Pass subsidy - the word subsidy implying some land of exgratia handout - which was a tacit acknowledgement of this important point.
The FSCS scheme also has to look carefully at some aspects of the running of the scheme, such as the claims-handling process.
For example, if a client's complaint is not upheld by the Fos and the firm subsequently goes into default, the client can then apply to the FSCS for a payout.
This seems at odds with the treating customers fairly rules, allowing compensation according to a company's circumstances rather than for its actions. It would be interesting to know how the FSCS's claims settlement record compares to that of IFA firms.
To sum up, the whole industry has an important part to play in maintaining confidence and therefore the whole industry should take responsibility for providing compensation for failures. Given the importance of financial advice and the need for strong distribution companies that can provide good service to clients and providers, the need for a radical overhaul is long overdue.
key points
- The current system of FSCS budget is unsustainable and a different system should be introduced
- The current system raises the prospect of a vicious circle where rising FSCS costs force firms to go out of business, resulting in higher compensation payments
- Firms which have dealt professionally with the pensions review and met the costs are now getting a second round of costs arising from the firms who did not and went into default
Positive gives advisers top incentive
Positive Solutions is to offer its top investment advisers a 0 per cent retention charge on commissions and fees over £150,000.
Mon. February 12th, 2007
Positive Solutions is to offer its top investment advisers a 0 per cent retention charge on commissions and fees over £150,000.
The move further enhances its partner contracts and sees an extra tier added offering a 0 per cent charge on the proportion of commissions and fees earned that fall over the £150,000 mark.
Neil Johnson, chief executive of Positive Solutions, said the national adviser network had seen particularly strong recruitment figures in recent months, but its popularity was not just about its rates.
More than 40 new recruits joined Positive Solutions in January alone, putting it on target to recruit close to 500 new IFA partners this year.
In January 2006 it had 1300 advisers, with this leaping to 1555 last month, while recruitment numbers doubled in the last quarter of 2006 alone compared to the first quarter of the year.
Mr Johnson said: "We are recruiting a large number of IFAs from a directly regulated background who have been running their own practice."
Positive Solutions applies 0pc retention charge
Positive Solutions has implemented a 0pc retention charge on commissions and fees earned of over £150,000.Thu. February 8th, 2007
Positive Solutions has implemented a 0pc retention charge on commissions and fees earned of over £150,000.
The national IFA firm cited its innovative approach to rates as part of its attraction for its partners and its strong recruitment figures in recent months.
The group welcomed 40 new recruits at its National Partners Forum including ex members of, among others, Bates Millfield, Sesame and Burns Anderson.
Positive Solutions chief executive Neil Johnson said the larger number of recruits had come from a directly regulated background as advisers running their own firms found it increasingly difficult to administer their businesses. The escalating costs of PI cover, FSA fees and the FSCS levy were adding greater compliance and technology burdens, he added.
The number of advisers with Positive Solutions was 1,555 at end of January and the last quarter of 2006 had seen recruitment numbers double those earlier in the year, Johnson said.
Common tech Platform - ideal or reality?
Positive Solutions chairman David Harrison is not a man to mince his words, leaving noone at the national IFA group's National Partners Forum in any doubt about his views on the relationship between weak distributors & product providers.Thu. February 8th, 2007
Positive Solutions chairman David Harrison is not a man to mince his words. The forthright Geordie left noone at the national IFA group's National Partners Forum in any doubt about his views on the relationship between weak distributors and product providers. Harrison sees the bolstering of various distribution companies by Life and Pensions providers over the years as responsible for creating an inefficient market and in many cases simply postponing the inevitable, the collapse of the companies in question.
And as he pointed out, it has not been spare revenue the Life and Pensions companies have been pouring into struggling distribution models but clients' cash that has been used and "wasted".
These inefficiencies are damaging the future of the market he said and the industry needs to be shaken up with product providers ensuring the distributors they back are sound businesses and are not pouring good money after bad.
Key also, in Harrison's view, is the need for an industry-owned technology "utility".
At present we have a scenario where product providers have to run a variety of programs to cater for a wide range of distribution systems. Running the majority of the market through one common platform would have obvious advantages in terms of development and running costs and improving efficiencies in adviser firms.
Harrison's premise is that post depolarisation the market has fragmented with consolidation failing for the lack of that common platform, as without economies of scale there is no incentive for product providers to change their business processes and systems.
Positive Solutions is renowned for its use of cutting-edge technology to speed connectivity, cut costs in the business and drive profitability. Further develop and disseminate that technology and you cannot help but improve the efficiency of the market. This is where Positive Solutions and Harrison are coming from in the launch of Platform, a cross market technology solution that offers electronic connectivity between distributors and product providers.
There will be a cost involved but with the incentive that distributor users can become part owners of Platform, the ideal could become reality.
Positive Solutions to offer its technology to industry
Positive Solutions chairman David Harrison has lambasted the industry for allowing life and pensions companies to bolster weak and failing distribution companies, thereby delaying the market's progress to a more efficient model.Thu. February 8th, 2007
Positive Solutions chairman David Harrison has lambasted the industry for allowing life and pensions companies to bolster weak and failing distribution companies, thereby delaying the market's progress to a more efficient model.
In a speech at the national IFA's National Partners Forum, Harrison pointed to the millions of pounds poured into distribution companies that later went to the wall. He said the money would have been better spent increasing efficiencies within the industry to ensure companies with a viable business model developed and grew the market.
To that end, Harrison said, Positive Solutions would be making its cutting edge technology system available to the general market in a bid to help the industry improve connectivity, increase ebusiness and, through greater efficiencies, "save the financial services industry hundreds of millions of pounds in unnecessary costs".
A new company, Platform, would be created to develop the technology further and enable all financial advice firms - Harrison: criticised inefficiencies whether independent, whole of market, multi-tied or bancassurers - to quickly, efficiently and at reduced cost, process business with product providers.
As Platform grows in its number of users and economies of scale kick in, there will be a greater business case for product providers to spend on developing their internal programs to improve efficiencies for the industry, Harrison said. While so many different ways of dealing with financial advice firms exist, the market will be less efficient.
Platform will be a totally independent Limited Liability Partnership (LLP) in which existing Positive Solutions Partners can gain part ownership through a share scheme. Future users of Platform will also benefit from a similar ownership scheme, based on the value they add to Platform, Harrison said, emphasising the bulk of Platform will be distributor owned, with no large shareholdings by providers being allowed.
As an example of the costs savings that could be achieved, Harrison said one provider who implemented the Positive Solutions systems had seen incoming calls cut by 60pc and incoming post by 50pc.
"For a long time I have felt that the only way to strip out costs and drive the industry in the direction everyone - distributors, providers and the government wants is to provide an industry-wide "utility", owned eventually by the industry, on behalf of the industry and their clients. That is what Platform is designed to do," Harrison said.
Positive Solutions to launch Platform
Using the experiences learned of its existing technology in-house developments, Positive Solutions and Origen will be among Platform's first clients.
Thu. February 8th, 2007
Using the experiences learned of its existing technology in-house developments, Positive Solutions and Origen will be among Platform's first clients, but it aims to have its technology used by the majority of the industry's distributors and providers within two years.
Platform will be an independent limited liability partnership, but the shareholding will be primarily distributors with no large shareholdings by providers allowed.
Positive Solutions claims Platform will allow distributors to focus on advising clients and attracting and retaining high quality advisers, without being distracted by the cost of dealing with the administration attached to new and existing business.
The Positive Solutions adviser points earned under the current incentive scheme will roll over to a new programme based on earning value in Platform, while shares in the new venture will be available to all distributors joining based on the value they add to Platform.
David Harrison, chairman of Positive Solutions, says: "We see distributors and providers using an even more enhanced system than we use at the moment, but on a more widespread basis and the aim is to save the financial services industry hundreds of millions of pounds in unnecessary costs."
Positive Solutions shelves flotation
Positive Solutions has abandoned plans to float on the stockmarket but is setting up a technology and admin company called Platform in April.
Thu. February 8th, 2007
Positive Solutions has abandoned plans to float on the stockmarket but is setting up a technology and admin company called Platform in April.
Financing plans have not been finalised but Aegon is expected to take a stake in the business. No other product providers will be invited to invest.
Platform was revealed last week at the national IFA's partner forum at London's Grosvenor House Hotel before many of its 1,554 advisers.
Flotation was expected to take place in 2010 and would have seen Positive Solutions' partners share in an Aegon-funded 80m cash pot, subject to hitting targets under PosSol's Partnership scheme . This was launched last October but has been axed and points accrued will transfer into share options in the new company.
Chief executive Neil Johnson says Platform will be positioned as a separate entity, aware of possible reluctance from advisers if it launched under a Positive Solutions or Aegon banner.
Johnson says: "We are confident that Platform will be self-financing eventually. It will certainly break even and will likely offer a more profitable option for IFAs because this is based on transactions made rather than assets held."
Executive chairman David Harrison will be performing two roles in the interim, retaining his Positive Solutions duties while leading Platform.
Harrison says the market is becoming more fragmented, with consolidation failing because of the lack of a common distributor platform.
1st executive chairman Rory Curran says: "David is talented and has done well but making the announcement is one thing and it is far more difficult to set these things up in reality. I do not think he will be able to mandate the technology in the same way to the wider market."
Positive rolls out platform arm
Joint venture with Aegon will be limited liability partnership and will aim to streamline how commission is received Positive rolls out platform arm
Thu. February 8th, 2007
Joint venture with Aegon will be limited liability partnership and will aim to streamline how commission is received Positive rolls out platform arm
IFA network Positive Solutions has launched an administration and support technology service.
It was announced at the Positive Solutions conference - at the Grovesnor Hotel on 1 February, which was attended by 1050 delegate. The service will be called Platform and it will be a totally independent limited liability partnership, developed with Aegon.
David Harrison, chief executive of Positive Solutions, said: "We have formed a new company called Platform. It will bring a limited liability partnership to the market. This is something we wanted to do a few years ago and to get there has been difficult. The technology has been hard and has had to be shipped in."
Mr Harrison said the plan was to grow the business and then to sell it to release the value then share it. Positive Solutions will become the first user of the new platform.
He said: "At Positive Solutions it will be business as usual. There would be a new zero rate for all issued business above £150,000. We will not retain any commissions or fees and all Positive Solutions employees will form part of a value sharing partnership."
Mr Harrison said he believed the industry would move over to use the new platform in order to streamline the way they receive commissions. He said: "The industry is still largely paper based. A product provider will have several systems which Positive Solutions will use. But this is something that is working now. We will make 12,000 single payments into 1500 different bank accounts. Following the introduction of Platform, we will process over 98 per cent of our business through this system."
Mr Harrison said that there are a wide range of commissions which are so low that an adviser will often not bother to chase them up.
More than 40 new recruits joined Positive Solution in January, putting it on target to recruit close to 500 new IFAs each year. It was also revealed that 800 partners of Positive Solutions have shared an average of more than £900 each from last year's Prophitshare incentive scheme.
A Positive Attitude
Key to the success of Positive Solutions has CEO Neil Johnson. But to do that, advisers places been the recruitment of quality advisers, says have to see you as a company that is going places.
Thu. January 25th, 2007
Only three weeks into the New Year and already Positive Solutions is processing a whopping 114 applications from potential IFAs to join Its burgeoning business.
What is more it has just finished inducting 27 new joiners and is about to run another course to initiate a further 20.
This flurry of interest, according to chief executive Neil Johnson, means quarter one of 2007 is already looking very lucrative for the Newcastle-based business.
Last year saw healthy expansion thanks to continuing organic growth of the independent firm which was recently bought by Aegon. At the start of 2006 it had 1,308 partners. This figured soared to 1,527 by the end of December.
Johnson says this was "fairly typical" of the growth it had seen in previous years, although he admitted there was a spell in the year where recruitment was harder. He attributes this to inertia amid high profile casualties of companies closing down.
He added: "It is slightly lower than we've had in the past, previously we've grown by between 200 and 300. But in the last quarter we had 114 applications they are going through the process now.
"It means the first quarter of 2007 we will be significantly up in terms of the number of IFAs."
However, in general, the year was consistent and steady in terms of the firm's growth and it would appear that quality is most certainly of equal importance to quantity for the firm.
"We have grown organically but with a close eye on quality and we've worked with that plan for many years," Johnson says.
"Whilst our growth rates are good, we don't want that to be at the expense of our profit."
Positive Solutions uses the proxy of productivity to define quality and currently 255 of its IFAs produce more than £100,000. However, it also puts potential partners through stringent compliance tests and demands topline production.
In 2006 it also recruited a lot more directly regulated IFAs and many have gone into Positive Solutions' own compliance model.
It was a year which also saw Positive Solutions take huge strides in the technology arena. A new version of its award-winning fully integrated end-to-end business process. Intuitive 2, which has become a recognised industry leader, was launched at the end of 2006. It includes a quote engine feature and links to e-applications and has, Johnson revealed, proved a huge boost to business.
It also launched a Practice Buyout initiative in the middle of the year which involves paying IFAs at retirement four times their net earnings. The scheme clearly made its mark in the industry, as several other similar initiatives have been created since the launch of Positive Solutions' model.
Going into 2007 it is "business as usual" according to Johnson who, by that phrase, means the firm will hopefully continue to enjoy a healthy turnover.
Bond Process Time Slashed
Hartford Financial Services and Positive Solutions have introduced an electronic bond application process, eliminating paper applications and client signatures for investment bonds.
Mon. January 22nd, 2007
Hartford Life and Positive Solutions have rolled out an electronic process which eliminates the need for client signatures on applications for the asset manager\'s Gold investment bonds.
The system, which is available to advisers who use Positive Solutions, eliminates paper applications and client signatures, and has been introduced by Hartford Life Limited, a subsidiary of the US-based Hartford Financial Services Group.
Hartford said the electronic process reduced the days spent processing investment bond applications into just a few minutes.
The system is currently only available through Postive Solutions-affliated IFAs.
The electronic system uses technology already used by The Hartford in the US where advisers have been relying on paperless bond processing since the early 1990s.
John Enos, managing director of marketing for Hartford Life, said the system was introduced to meet adviser demand.
He said immediate processing investment bonds was exactly what advisers had been after.
He said in the past advisers and their clients typically had to wait between five and seven days to process bond applications in the UK.
Mr Enos said: "I believe IFAs are going to embrace the straight-through processing of applications for the Hartford\'s products."
Mark Henderson, director of wealth management for Positive Solutions, said the technology would allow an adviser to complete the entire bond application process with his or her client at the point of sale.
He said: "The application can then be transmitted to The Hartford electronically, speeding the order in seconds instead of days.
"If the IFA and client prefer, funds can be transferred via secure electronic payment."
Home in on Business
Financial firms that set up small flexible offices or have staff working from home can benefit from lower costs and higher productivity but not all advisers are in favour of this working model. Helen Pow reports.
Thu. January 18th, 2007
Wireless internet and laptops are everywhere, no one leaves home without their mobile phone, or Blackberry if they are important enough, and webcams and tele-conferences make interviews with faraway clients or colleagues easy. So do IFA firms really need advisers to put in the traditional nine to five at the office any more? More and more companies think not.
Financial planning firms, big and small, are taking advantage of new technologies and are encouraging advisers to work from "home offices" around the country. Evolve Financial Planning and Positive Solutions are two companies which think this method is more efficient and offers better service.
Positive Solutions has 1,500 advisers in 13 offices around the UK and 60 administrative staff who take care of regulatory, recruit-ment, training and com-pliance. This works to a ratio of 25 earners to each of the support staff. The office set-up is designed to make the most of this resource There are no set desks or fixed-line phones and advisers are free to come and go as they please.
Positive Solutions marketing manager Daniel Harrison says: "Our model aims to let advisers do what they do best - advise. We aim to take as much of the administrative burden away from the adviser as possible to give them the time to spend on client matters.
"This focus makes life as easy as possible for the adviser and gives them a huge amount of flexibility. They can work from home, their own office or use the facilities provided by us. In London, some advisers are based at the office while others just use it as a base for client meetings when they need to."
Evolve Financial Planning works in a similar way, albeit on a smaller scale, it only has five advisers. The company has a small office in London, primarily used as a postal address and a place to meet client,s but all advisers work from home offices outside the city.
Evolve director Jason Witcombe says: "We can work at our Liverpool Street office with our laptops if we want to but most of us think we can be more efficient working from our home offices and this primarily saves money."
Harrison says that new technology allows Positive Solutions to be more efficient and is central to its success.
He says: "Our advisers all use tablet PCs that allow a better adviser-customer experience, with information entered automatically from a fact-find prepopulating policy document that can then be dealt with electronically.
"In many cases, we do not even require a signature. The customer gets access to a full online service giving a breakdown of their financial situation."
But some companies believe they can focus and meet client needs better when advisers are based in a communal office.
Others say that it is a good model but it would be too difficult to switch after years of building up client files in a traditional office.
Highclere Financial Services Alan Lakey says: "If someone starts a business today, they start with a clean slate. If I started today, I could do away with filing cabinets and have it all on a database but I have been in business 22 years and have 11 filing cabinets. It would probably take me two years and a lot of money to scan everything on to the computer."
Lakey believes some people can be unproductive when working from home but he says some advisers thrive when given this freedom.
He says: "People who work in any sales environment do not like to be pinned down to working certain hours and there is a tendency for managers to push people to do things they do not want to do and anyone working from home will not have this problem. Many people like the freedom and could make more money by working harder and want to be judged on their results, not the hours they put in or whether they suck up to the boss."
Anand Associates managing director Bhupinder Anand considers remote working would not work for his business but he believes they can be successful as long as the clients' interests are put first.
He says: "If it is expanding the market and allowing advisers to stay in business, then that is a good thing because the cost of running a business is rising exponentially. If companies have a model that works and is in the interest of the client, then I think that is great."
But Anand is unsure whether the model lends itself to creative, holistic financial planning.
He says: "It works for certain types of advisers who prefer to work alone and have efficient technological tools and support but who do not necessarily want to be at the cutting edge of alternative products, ideas or planning techniques."
Anand is also concerned that advisers may suffer from not having a team around them to bounce ideas off.
He claims there is better communication among staff in a permanent office and believes they are motivated by working in a team environment.
Witcombe says that clients appreciate that Evolve's home-office model allows the company to be more financially efficient.
He says: "Having a flexible working environment is very useful and clients like the idea that it keeps costs down and therefore their fees down."
But Lakey says: "Some clients would appreciate a company cutting costs but most would not give a hoot."
He feels having a permanent base comforts clients because they know where to find him. Lakey also enjoys the fact that he can make his office his own and influence how he comes across to the client.
He says: "An advantage of working from the office is that you are able to dictate the impression you give a client. You can make your office reflect your personality. I think a client likes to feel comfortable in an office and some meeting rooms are too clinical and cold."
Professional Pensions
Independent financial advisers are shouldering the burden of the government's decision to scrap tax relief on pension term assurance, Positive Solutions claims.
Thu. January 11th, 2007
Independent financial advisers are shouldering the burden of the government's decision to scrap tax relief on pension term assurance, Positive Solutions claims.
The national advisory firm said IFAs had suffered in terms of time and cost from the unexpected withdrawal of tax relief on stand-alone PTA.
It added that it alone had nearly 1000 PTA policies in the pipeline when the pre-Budget notes revealed the tax relief change.
Positive Solutions director of wealth management Mark Henderson said: "The people who bear the brunt of this are the IFAs.
"They are the ones who actually found the client, identified the need for protection and recommended the most tax-efficient way of getting it.
"They then had to go back to the client to explain the changes after the pre-Budget announcement and again when the government relented on pipeline business."
Henderson said that while the change was effective for policies entered into after December 6, HM Revenue and Customs later clarified that pipeline policies applied for by that date would in fact remain eligible for relief if received by providers by midnight on December 13 - a deadline that was still difficult for many IFAs to meet.
He added: "From our point of view it is the IFA who has been left to carry the can and the IFA who, to a certain extent, has been left to carry the cost."
National IFA firm hits out at Government's PTA tax plan
IFAs are being left to bear the cost of the Chancellor's u-turn on pension term assurance (PTA) according to Positive Solutions.
Thu. January 11th, 2007
IFAS ARE being left to bear the cost of the Chancellor's u-turn on pension term assurance (PTA) according to Positive Solutions.
The national IFA firm, owned by Aegon Group, has hit out at the Government's plan to remove tax relief on PTA which was revealed as part of the December 6 Pre-Budget Report.
As a result of what Positive Solutions has dubbed a 'total botch' by the Government, many advisers describing the change to current and pending new clients have been forced to backtrack due to what it believes is poor information streams from the Chancellor.
While the proposed change is effective for policies entered into after December 6, HM Revenue and Customs later clarified pipeline policies applied for by that date would remain eligible for relief if received by providers by midnight on December 13.
Positive Solutions is concerned that its IFAs have suffered in terms of time and cost from the unexpected withdrawal of tax relief on standalone PTA and the subsequent confusion caused following the Pre-Budget report.
Mark Henderson, director of wealth management at Positive Solutions, described the u-turn and confusion over pipeline business as "a total botch".
"The people who bear the brunt of this are the IFAs," he said. "They are the ones who actually found the client, identified the need for protection and recommended the most tax-efficient way of getting it.
"They then had to go back to the client to explain the changes after the PreBudget announcement and again when the government relented on pipeline business.
"By doing their job properly and keeping the client fully informed and up-to-date with developments, IFAs have had to give clients different stories," said Henderson. "It cannot do the industry any good. From our point of view it's the IFA who has been left to carry the can and the IFA who. to a certain extent, has been left to carry the cost
"If you're visiting clients more often than should have been necessary, there's a cost to that and it's the IFA who is bearing that."
Through its interactive pipeline system, Positive Solutions was able to identify all applications that had been submitted by its 1,500 IFA partners. It found nearly 1,060 PTA policies in its sales pipeline when the Pre-Budget notes revealed the tax relief change.
"We are fortunate to have live pipeline records and this enabled us to make an instant assessment of the situation," added Henderson "Other IFAs were not in such a good position."
Advisers carry can and costs over PTA
Positive Solutions had 1,000 policies in pipeline and says U-turn hit IFAs. Positive Solutions has accused the Government of leaving IFAs to carry the can for its pre-Budget report U-turn on pension term assurance.
Thu. January 11th, 2007
Positive Solutions had 1,000 policies in pipeline and says U-turn hit IFAs. Positive Solutions has accused the Government of leaving IFAs to carry the can for its pre-Budget report U-turn on pension term assurance.
Director of wealth management Mark Henderson says the firm had nearly 1,000 PTA policies in the sales pipeline when the change on tax relief was announced.
The change is effective for policies after December 6 , the date of the pre-Budget report, but HM Revenue and Customs later confirmed that pipeline policies applied for by that date would remain eligible for relief if received by providers by midnight on December 13.
Positive Solutions says its interactive pipeline system was able to identify applications that had been submitted by its IFA partners. Providers helped update the firm and it passed on the information to its IFAs through the system.
Henderson describes the U-turn and pipeline confusion as a 'total botch' which has forced extra costs on to IFAs. He says: 'By doing their job properly and keeping clients fully informed and up to date with developments, IFAs have had to give clients different stories, potentially three different stories. It cannot do the industry any good. 'The IFA has been left to carry the can and the IFA, to a certain extent, has been left to carry the cost. If you are visiting clients more often than should have been necessary, there is a cost to that and it is the IFA who is bearing that. They are the ones who found the client, identified the need for protection and recommended the most tax-efficient way of getting it.'
IFAs bear brunt of PTA debacle
IFAs have been left to carry the can for the Government's 'botched' announcement last month that it is reviewing pensions term assurance, according to a leading IFA firm.
Mon. January 8th, 2007
By: Anouchka Burton
IFAs have been left to carry the can for the Government's 'botched' announcement last month that it is reviewing pensions term assurance, according to a leading IFA firm.
The announcement - widely taken to mean that Gordon Brown is ditching tax relief on the product - left the industry reeling and IFAs and providers scrambling to obtain clarification on key issues.
HMRC was forced to make a further announcement confirming that pipeline PTA cases would remain eligible for relief if received by providers by December 13. But Mark Henderson, director of wealth management at Positive Solutions, claims that for some IFAs, the damage had already been done.
He said: "The people who bear the brunt of this are the IFAs. From our point of view it?s the IFA who has been left to carry the can and the IFA who, to a certain extent, has been left to carry the cost."
Positive Solutions had nearly 1,000 PTA policies in its sales pipeline when the pre-budget report was announced. Mr Henderson said that his firm's system was able to cope with the changes, and make an instant assessment of the situation, but other IFAs were not so lucky.
He added: "By doing their job properly and keeping the client fully informed and up-to-date with developments, IFAs have had to give clients potentially three different stories. It cannot do the industry any good."