Advisers will not be eligible to become shareholders in AJ Bell when it floats unless they are a customer of the business, the platform has said.
The business is preparing to list on the main market of the London Stock Exchange either in December or early 2019.
As part of the listing, AJ Bell is ringfencing some shares for retail investors. Those investors who want to apply for shares in the IPO must be UK residents and have opened an account with AJ Bell by 15 October.
AJ Bell chief executive Andy Bell says the business has taken a cautious view on letting advisers invest in the business given inducement rules.
Other platform businesses, including Nucleus and Transact, which both listed this year, do have advisers as shareholders.
Bell says: “We took a cautious view that said if an adviser is a customer then they are entitled to participate as a customer but, in their role as an adviser, there is no mechanism for them to get any special terms or participate.”
If the IPO goes ahead in December, the application process for retail customers to buy shares is expected to start at the end of November or early December. It will be open for at least seven days.
Customers eligible to buy shares can do so through one of, each of, or a combination of their Sipp, Isa, Lifetime Isa or dealing accounts.
The minimum value of shares that must be applied for in each account is £1,000.
Bell says: “IPOs are traditionally done behind closed doors with retail investors rarely getting access to the flotation price of the shares. As a company that aims to make investing easy for people this didn’t feel like the right approach for us.”
Bell is reducing his stake in the business from 28 per cent to 25 per cent in the listing and fund manager Invesco is selling down its holding from 44 per cent to 25 per cent.
Current AJ Bell management and some former staff have a 25 per cent holding in the company as it stands. They will sell down around 10 per cent of that holding.
Seneca Investment Management also holds a 3 per cent stake in the business and will sell down a portion of that holding.