The expansion of Quilter’s national model to include the mass affluent market has been built off widespread industry demand for more integrated propositions, says Intrinsic chief executive Andy Thompson.
Speaking to Money Marketing, Thompson says the vertically-integrated Quilter, formerly Old Mutual Wealth, has seen more success from its national arm Quilter Private Client Advisers than it expected and was apprehensive the model would even be effective.
PCA sits under network model, Intrinsic and services the affluent and high net worth.
Thompson says: “When we set up PCA in 2015 we thought it would work but we didn’t know it would work. We didn’t know if customers would like the fully-integrated model but now we get great feedback from them.
“We’ve also been surprised about our ability to grow our own advisers. We didn’t think we’d be able to bring in a relatively fresh graduate and put them through the Quilter Financial Adviser School and they could come out and look to engage with a high net wealth customer often much older than they are.”
A total 65 advisers currently work in the PCA and manage around £2.5bn of assets.
The full acquisition of former Intrinsic member firm Charles Derby last month is the bedrock for wider expansion plans across the entire Quilter business.
Charles Derby is set to rebranded as Quilter Financial Advisers.
Thompson says: “We want to have a national model in the affluent and mass affluent market and we want to grow its size and scale. We believe there are customers who want to buy that integrated propositions who want to buy the Quilter brand and want to buy it for consistency.
“We find that people have employees around the country and they want to give them financial advice but they want to know it’s got consistency and you can only do that with the control of a national model. It all starts with advice, unless advice happens, nothing else in our model does.”
Thompson tells Money Marketing the need for separate high net worth and affluent offerings comes from higher customer expectations.
“Customers no longer want a vanilla proposition, they want something much more bespoke to their needs. The requirements a high net worth customer has and the kind of service they’re looking for is very different from someone who is mass affluent.
“You’re starting to see the people who walked away from advice looking at how to get back in. Unless you’re in advice, you don’t get the asset or wealth management that sits at the end of it, you have to have the right advice for who you are as a customer first.”
National IFA Chase de Vere is also working on an offering for the mass affluent with platform Cofunds, while Tilney also announced plans for a five-strong team for mass affluent customers. Curtis Banks and Legal and General are also closing in on the market with specific Sipp offerings for the mass affluent.
Thompsons says plans to Quilter are also feeding across more widely into the network model however. Intrinsic currently has 3,500 advisers but says opportunities for recruitment are slim.
To combat this, the group announced an expansion within the QFAS School last September. The academy now has a specific Intrinsic-funded training programme that sees graduates sit in the network two years after graduating. It also offers the Level 6 Advanced Diploma of Financial Planning.
Thompson says: “We want to keep growing the network organically and historically, we’ve done that at about 5 per cent per annum. What we do see is that it gets increasingly harder to get advisers from the market and the ones out there are more established than before.
“There are less people in that position where they’ve had a few years in work and are now looking for where they want to end up. A lot of directly authorised firms are interested in growing our umbrella but it’s harder to find individual advisers.”
The first cohort of advisers in the Intrinsic-funded QFAS programme has 44 students who will graduate in December.
Forty students in three separate cohorts are also undertaking Level 6 study.
Thompson says: “It’s a long time since a business in the UK has come out and said we think financial advice and seeking financial advisers is a really good thing and it’s the core of our operation. There’s a real shortage of advice but more consumers are understanding that there’s a need for it.
“We are now at a point where we want to accelerate and expand to match need.”