JS&P Towry Law remains firm in its position over its fees-only approach, despite criticism from the industry.
Responding to Informed Choice managing director Nick Bamford’s comments about Towry’s bullish remarks promoting his fees-only model, Towry Law chief executive Andrew Fisher says: “None of our advisers take commission of any sort, nor does the firm. We charge an hourly fee and any commissions received are returned to the client. We do not offset commissions.”
Fisher says Towry’s advisers are salaried and receive bonuses commensurate with client service levels.
He says the clients charge a management fee based on their funds under management but the clients, unfortunately have to pay VAT on this fee, which Fisher says is an unfortunate consequence of the “archaic” tax system.
He says within 12 months all the advisers should have reached their financial planning diploma and within two years all advisers should have reached their professional qualification, with chartered status being the ideal goal.
Fisher says as many of his advisers are still awaiting results it is impossible to say exactly how many will achieve chartered financial planner status but he says there are around 500 with higher levels of professional qualifications.
Fisher says Towry has a corporate policy in place that no incentives of any kind can be taken, from training to corporate hospitality.
He says that his advisers are paid substantially higher salaries than many of its rival firms and all training is done in-house rather than by product providers.
He says the firm runs a central dedicated team that transfers T&C knowledge back – undertaken by specialist advisers who advise the financial planners.
With regard to provider ownership of distribution, Fisher says he will he thinks any amount of provider ownership where it can influence – perhaps 15 per cent or more – is too much.
He says: “For a private company any amount is really too much, but I understand that a public listed company might need some level of investment. I would say that any amount is too much but some would say that is too Draconian a viewpoint. I struggle to see why any provider would own an IFA if not for strategic reasons – it could certainly not be to make a profit as so few firms are profitable.”
Fisher says he thinks he has done everything in his power to “put his money where his mouth is”, saying he has moved Towry Law from a fully commission-based business model to a fully fees-based model.
He agrees with Bamford that he would love to see the industry transform into a profession, but does not feel that there are currently sufficient “professionals” in order to call it such.
Fisher says: “The whole of Towry Law is entrenched in 100 per cent fee-based now, compared to 100 per cent commission-based previously. We have funded 500 professional exams for advisers, which I think is pretty reasonable, even though it has been at a cost to our profitability. I welcome these points and I think it is good to encourage further debate.”
Fisher says last year’s turnover was around £40m and this year is around £50m, while profits are £6m last year and around £10m this year, which he says would have been higher had it not been for the move to fees.