There is a really interesting trend developing in the advice sector where good quality independent advice firms are selling up to consolidators or a couple of very large life companies that have decided to re-enter the advice market.
The key phrase is this is vertical integration. If the company can charge at each point i.e. advice, platform and investments, then they should be able to make it work for them.
It is understandable given the average age profile of business principals in the advice sector is somewhere in the late 50s that they might look to cash out while there is demand in the market.
I don’t have any problem with this per se, however I do wonder where this leaves the client - something that the FCA reportedly warned about just last week.
Presumably there was a reason they chose a small independent advice firm over some of the larger players in the market.
This is likely down to the personal touch, the relationship, the flexibility and importantly their independence from any particular product or investment provider.
Of course there is a bigger issue as well, which is, who is paying for the deal?
In a lot of cases it will be the client with some kind of fee to move assets to the new parent company’s platform/investment solution.
It has really come into sharp focus recently with some well known local firms going down this path.
There are many an interesting conversation to be had with advisers – how long will they be in the industry and what is their long-term business plan?
In case you are wondering I won’t be shedding too many tears.
At the ripe old age of 34 I have a very long-term plan for our business, we have been independent for nearly 40 years and will remain fiercely independent for as long as I am in charge.
The way things are going we will be one of the last advisers standing. We look forward to the challenge!