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True Potential offers new share deal to advisers

True Potential has revealed details of its share plan which will offer advisers an escalating level of shares depending on the amount of assets placed on its Wealth Platform by February 2013, with a 50 per cent share unit uplift on assets placed by March 20, 2012.

Previously, firms received a standard 10,000 share units for joining TP while the firm decided how best to structure its share scheme. The deal will be back-dated to take account of any assets placed on the platform since it launched in March 2011.

The number of shares received before the uplift ranges from 100,000, for £1.2m of assets placed, up to 10m for investments of £15m or above. Those investing £16m will get 10m units plus an increment of 1m units per £1m of additional assets.

The 50 per cent uplift is available on assets placed by March 20. Those who invest after that date will still receive shares with no uplift up until 28 February, 2013.

The offer note to advisers states: “Nobody knows what value these units will hold, if any. It may be that we never reach a point where there is sufficient interest in us either as a trade purchase or as a public offering, in which case our value will simply be our profitability.  However you are effectively in the same situation as the founders and other partners in True Potential, who clearly believe that what we are all doing has great value in the market and will help revolutionise the way wealth management is brought to the UK consumer in the future.”

“It’s important to note that when we offered shares in a previous company we owned there were those, at head office as well as in the field, who didn’t completely share our beliefs and confidence and therefore did not make the most of the opportunity.  However over 800 did, and between them shared £136,000,000 in cash when our last firm was sold, with the top adviser netting £1,300,000.  There are no guarantees in life, however we believe there is great synergy in doing the right thing for your client, which in turn creates value for all to share.”

True Potential says the deal will mean between 10 per cent and 20 per cent of the company will be owned by advisers.

True Potential senior partner Daniel Harrison says: “We wanted to try and reward those advisers who have shown faith is TP by placing money with us since we started and this is a way of doing that.”

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Comments

There are 23 comments at the moment, we would love to hear your opinion too.

  1. And may I ask, whose money is it that these TP advisers are investing in the TP Platform?! Is there not a rather large ‘conflict of interest’ issue here? I would like to see the disclosure being given to clients about the TP platform being in the clients best interest. Come on FSA, do you not have something to say?

  2. Harrison said the same when he was in control of Positive Solutions. The carrot then was when you joined PS you were entitled to 3000 units, and each other adviser you encouraged to join you doubled this. Needless to say that was the carrot that took me to PS . That scheme came to nothing, and although the theory is there, when Harrison sells True Potential this dream will go down the swanny. Wonder what his next company will be called Positive Potential, or True Solutions.

  3. Sorry can you clarify what the conflict of interest is here?? these are notational units that may or may not actually be worth anything. Any decent firm would do their due diligence to ensure that whatever platform/wrap being recommended is the most suitable for the client. Are you suggesting that a client would be disadvantaged if they are being recommended to invest within this?

  4. I was at PS also. What you are saying is a blatant lie. The true facts are that when PS was sold, over 800 advisers shared over £130m between, them and I personally know one who got over £1.3m. So please give credit where it’s due, the one person in the industry who has done this sort of thing, and shared it with others is David. Of course you had to do a minimum level of production to qualify.

    Finally, I have no doubt that TP would have thought about conflicts of interest before launch, they are a pretty experienced bunch over there.

  5. Sean,

    Im slightly concerned if you cant see the obvious COI here. Yes due dilligence may have been done but i think you’ll find that most TP advisers will use the due dilligence undertaken by TP Platform before setting up the platform as their “get out clause” there – and guess what the due dilligence says….thats right, that the TP platform is the right product in certain circumstances and beats many others.

    Money on the platform increases revenue and profit, this in turn up-lifts the share price, hoping for a nice profit on exit.

    Who wouldnt be tempted – after all if you held substantial shares in Sainsburys – wouldnt you be tempted to shop there, and recommend it to everyone else as well?

    I hope your not a compliance officer, or worse….and FSA employee. !!

  6. Dear Me. The same old cynical people on here I see. If you are not complaining about the FSA, your moaning about others, possibly getting something you are not.

    Jealousy is a bad feeling. Try to think positive!

  7. This faceless person who goes by the name of anonymous- You are correct that 800 advisers had a share in the one and only payout. I unfortunately joined in the second traunch. I was sold a pup by David. and you are incorrect in stating that you needed to do a minimum level of production.

  8. Darrell Monteith 6th January 2012 at 3:58 pm

    I smell not a little jealousy in some of the comments on here and it is far from becoming

  9. Don,

    Valid point, we do like a moan about the regulator and others – however as someone in compliance i was just baffled by Seans possibly naive comment.

    Trust me in this instance the green eyed monster is not at home.

  10. This is all just too much like amway and the utility warehouse.

    I am a TP user but dont use the platform and it just doesnt shape up yet.

    When and if it does i will use it but anyone who has done their own DD and not just pressed the button to upload the TP supplied dd will know this.

    I only hope as a TP user i dont get dragged into the mix when the FSA do come knocking…….

  11. I find it staggering they are allowed to do this.

    To say these shares are not worth anything and then mention that some bloke bagged £1.3m from a “similar” scheme in the past is at best gilding the lilly.

    Is it a massive conflict of interest – these “shares” should be shared out pro rata to the clients whose assets are giving rise to the payment – otherwise it is surely commission by another name?

    It doesn’t pass the “smell” test.

    And yes, I am clearly making this comment because I’m jealous that I’m not using TP and getting a share of something that may be worth nothing.

  12. I have recently commenced using TP and will consider using their platform in the future. As a sole trader I have found them – thus far – extremely helpful and supportive. As regards the share opportunity I don’t get some of the comments. I did not use them to get free share options, but if anything comes of this it is a bonus.

  13. Lawrie H, I am sorry to see you joined too late to same in the original PS scheme, which was actually in two payouts, and that scheme did have minimum levels. The scheme you refer to came after the sale of PS to AEGON.

    From (distant) memory I believe the original PS directors left before they could guide that scheme through to a minimum market valuation and had to leave it to others to achieve this. Always difficult to follow that act, and market conditions won’t have helped the replacement team either.

    I hope therefore we have not been at cross purposes here. I probably reacted to your tone rather than some of the content.

    As a benefactor of the original scheme, I can only comment on and defend the team that made me (and didn’t have to) and hundreds of others much wealthier, and at no cost to me at all.

    My point was, isn’t it nice at times to hear about an opportunity in an industry that these days has been full of gloom and doom. You and I may never agree, but I know who I would back, and I know hundreds of others are likely to agree.

  14. Anyone commenting on here that suggests I might favour the TP Platform in order to gain a possible advantage through shares, is naive at best and positively insulting my integrity as a professional adviser at worst.
    Get a grip and focus on being RDR ready !!!

  15. It sems to me a great way to shackle users into being locked into TP. TP started life as a back office system and seems to be morphing into something else. Few platforms are profitable and many won’t survive. TP users could end up with the worst of both worlds if TP get it wrong and the platform goes under because TP cannot achieve profitability, taking the business with it.

  16. I am a TP user and will not be encouraged to place assets on their WMP to benefit from additional shares. I will do what is right for my client and will receive my remuneration from them in a clear and compliant way!

  17. David Harrison promised TP advisers a guaranteed exit strategy then reneged on his promise.
    Do not be tempted to place your clients wealth on the TP platform unless it is indeed in the best interest of the client. To do otherwise is a massive conflict of interest.

  18. I am directly authorised and use TP compliance services. I use the investment platform where appropriate for my client but have steered clear of the current DFM offerings my research suggests alternatives. The TP investment platform is transparent & competitive and developing all the time and I will recommend it where appropriate for my client based on charges, features,fund choice etc etc but will not be swayed by the potential benefit I may or may not derive in future.
    I think there are a few unfair & cynical comments on here re TP & their motives.
    They are naturally trying to drive their business model forward – the adviser is still free to make their own individual decision minful that they are ultimately responsible for the advice – nothing wrong in that.

  19. Whether or not there is a conflict of interest is a question that will only get resolved when something goes horribly wrong. What is absolutely clear is that if things do go wrong the pressure will really be placed on the advisers. is it worth the risk ?

  20. Advisers shared in £130m? I understaood it was a deal that valued the business at £163m but only £65.2m was paid for the stake? Very generous to the advisers then!

  21. True Potential recently backtracked on it’s “guaranteed exit strategy” for those advisers using the system.
    They moved the goalposts by stipulating only those advisers placing all their clients assets onto the TP wealth platform would be able to derive any value for their business.
    What is to stop them backtracking on the share deal in future?
    TP should stick to back office systems and stop trying to make a fast buck.

  22. This raises a serious conflict of interest issue. I hope the regulator is taking a close interest. This type of thing is what has affected a once proud industry’s reputation.

    It doesn’t matter whether it tiptoes around the rules or not – this just looks bad.

  23. I do get fed up of listening to negative comments whenever anyone try’s to create something valuable or different.

    I personally benefited from David Harrison’s previous “folly” at Positive Solutions to the tune of over £400k!…and so did most of the advisers who joined at the right time from what I remember.

    And that’s where you get 2 camps- those who joined, trusted in the management and were rewarded handsomely and those who joined later or “didn’t get off the fence” and got nothing as they had missed the boat -and therefore don’t have anything but rumours to work on or comment on?

    I always worked on the assumption that his previous scheme would not pay out that much?, but if it did, then it was a bonus…. I was never promised a huge payout either and was always told it was not guaranteed. This is a “dejavu” in my mind and I can also see the benefits of adopting a platform for a lot of my clients (if it is in their best interest) to help with adviser fees post RDR.
    If this is the case then why not use a platform that is developing ” a vertical stack” as the press tell us which is fully integrated with my back office system and as per the money marketing article this last week by Ian Mckenna one of the most advanced propositions in the industry – and that’s a totally independent article.

    Again I fear there will inevitably be 2 camps – i know which i will take a chance on!

    TS

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