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Independence Daze or why Money Marketing doesn’t do a top 100 adviser list

This year Money Marketing is very unlikely to publish anything even remotely resembling a top 100 IFAs.

Now this does not mean we have abandoned all lists. Personally despite Channel Four’s obsession with things such as the hundred worst footballers’ perms from the seventies, I rather like lists. It is just I don’t really think it can be done in a meaningful way for advisers except perhaps by RI and that’s on the FSA website already.

The regulatory boundaries aren’t all that clear. The FSA must have had some rationale for doing away with polarisation beside screwing up everyone’s lists though I can’t for the life of me remember what it was.

But whatever happened, when we survey the advice landscape it is difficult to understand exactly how to divide things up. We know Bradford & Bingley went from thousands of RIs to very few in what seemed like a matter of months and now hosts L&G tied sales advisers in branch so they probably shouldn’t be on anyone’s list.

But B&B aside – it is very difficult to categorise lots of adviser firms. This is because you all fit different criteria. IFAP have their own definition of an IFA ie whole of market in all areas with a fee option while the professional bodies have their own ideas of what they would like a new FSA definition to be.

But can an adviser list include the whole of market – no fee option folk? Some advisers are tied for one or two things. Some are FSA “independent” i.e. offering WOM plus fee option for pensions and investment but perhaps multi-tied for protection and that is before we start debating panels or even “ties” to wraps and fund supermarkets. So should the list be by financial adviser not by IFA then? Well any reasonable person would probably say an IFA list should stick to the FSA definition for as long as it lasts.

Yet isn’t the point of these lists at least partly to determine the clout of distributors? Where does St James’s Place lie? Is it is multi-tie or a tie anyway? Or a multi-tie with tied characteristics on trail for example. And surely lots of readers want to know how Intrinsic is doing vis-a-vis Openwork – how Sandy Leitch is doing against his old club so to speak.

What about the banks? Many have IFAs and often, or so I’m told, rather good ones for their wealthy clients. Some also have multi-ties or best of breeds. There is for example an IFA at NatWest and HSBC, though heaven alone knows what became of Sedgwicks under Barclays. But even if they have IFAs, banks are very difficult creatures to get detailed figures from about their advice businesses. They won’t and perhaps even can’t say where it shades into all the other banking activities. We can at least see their overall turnover which is great in relation say to other FTSE 100 businesses but pretty useless for comparisons with the rest of the advice sector. Just to make the picture even more complicated, you get accountants with small IFAs or big planning outfits, general brokers which have picked up investment businesses along the way, and of course pension and benefit consultants. The latter are often still IFAs by definition but worry that the term IFA sounds a bit downmarket so they don’t shout about it.

What if we limit the list to brokers who were IFAs or multi-ties who have some IFA characteristics – who behave a bit like IF As – as I noted before – Openwork, Intrinsic etc?

As for Hargreaves Lansdown – it is not an IFA from its own point of view and that of most advisers – the star attraction is the fund platform, yet within HL’s walls, Danny Cox leads a company of financial planners as well.
And Positive Solutions? Is it a national? Well for regulatory purposes it certainly is. But at times it can come across a bit networky. The branding, the regulation and the systems are in common. But to me it still feels neither fish nor fowl though given its recruitment success and level of payouts to partners it is a rather successful beast whatever its species.
What of the networks and support services firms which also have nationals and those that take a percentage and those a flat fee or a bit of both? How much of that “turnover” is theirs.
Mentioning money, we come to last and biggest hurdle. If you go down the scale a bit in terms of size of business, what adviser in their right mind doesn’t make sure the profits are at a reasonable but not spectacular level. Some businesses may even keep running without any discernable profit at all and they are not all mini Inter-Alliances. They are successful and tax efficient too and good luck to them.

In an ideal world, It should be profit that is king in any list. A few years ago, a consultancy agreed to do the donkey work for us and crunched the numbers for something close to the top 25 adviser businesses. They worked out the profits/turnover/productivity per salesperson and all sorts of useful numbers. It took forever and a day and it was not helped by what seemed like half the advisers in the market being late with their filings to Company’s House. It was a very useful exercise but it was very hard to do and after some soul searching we put it on hold. It was better than lists, one of two of which we also did, that asked advisers to volunteer the information on profits and turnover.

Of course when you ask an adviser the questions “Are you compliant? Do you think all advisers are compliant?” you get two different answers. Unfortunately participating advisers took the same attitude to the profit and turnover numbers they had supplied. Their figures were correct or a reasonable estimate – everyone else’s were utter rubbish. Some networks challenged the others’ RI numbers too, suggesting in one case that neither network nor FSA had caught up with a recent exodus.

So you see, doing a list isn’t all that easy. We’d love to do it. We know one consultancy Touchstone has some interesting numbers on market share, but it won’t let go of it, it barely acknowledges its own existence and charges we presume, a rather large fee.

So as I say we might change our minds one day and please let know if you think you’ve cracked it. But for the moment we believe that lists are a hiding to nothing except for pages of irate readers’ letters. So we may not find out how much you are making compared with your peers, though I hope you are all making a fortune, however much that may be.


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