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Intrinsic launches multi-million pound practice buyout scheme

Intrinsic is launching a multi-million pound practice buyout scheme which will offer loans to advisers looking to make acquisitions.

The scheme will connect appointed representatives of Intrinsic looking to sell their business with those who are looking to expand.

Financial backing from Intrinsic’s parent company Old Mutual Wealth worth several million pounds will enable advisers looking to make an acquisition to borrow from the network at what it says are “preferential” rates.

The loans will be repayable over a period of seven years and incur interest at 3 per cent over Libor.

Both buyers and sellers must be part of the Intrinsic network to be eligible for the scheme. Buyers must have been appointed representatives for at least three years, and sellers for at least five.

Intrinsic says it will also carry out a number of quality checks to ensure firms looking to make acquisitions have the capacity to deliver the appropriate level of service to any new clients.

Firms who are interested in the scheme can register as a buyer or seller. After making criteria checks, Intrinsic will introduce any appropriate buyers to firms looking to sell.

It says it expects around 25 deals to complete under the scheme by the end of this year.

Intrinsic chief executive Richard Freeman says: “This is another example of our commitment to helping financial advisers grow their businesses and realise value from that business when the time is right. It demonstrates the value of us being part of Old Mutual Wealth.

“The practice buyout initiative will allow owners of successful financial planning firms to sell their business while crucially ensuring their clients continue to receive a high quality of service from an adviser within the Intrinsic network.”

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Comments

There are 14 comments at the moment, we would love to hear your opinion too.

  1. I’m a member of Intrinsic and don’t understand why can’t they just pay us the money were are due now, rather than offer us an option to sell our businesses when we can no longer continue to trade. The commissions department is a complete shambles- maybe this is the area that needs some attention Mr Freeman!?

  2. We're all doomed!!!! 9th February 2015 at 9:38 am

    Derby IFA – when I looked at your comment on my phone, your name was displayed – although it was not on my desktop (initials HC)

  3. I agree with Derby IFA – their commissions department IS a complete shambles. I am a former AR of Intrinsic and they agreed to pay me trail commissions after I left 2 years ago (less a deduction of 18%). Last July, the tap was suddenly turned off without warning, and many emails and phone calls later, we are no further on (although they did make me a one-off payment in December). I cannot access my commission statements online and no-one is interested in taking ownership of the problem.

    They are a most unprofessional outfit in this respect, and their performance falls way short of what could reasonably be expected of what they would have us believe is a leading light amongst networks. I’m glad I left and I would advise caution for anyone planning to join Intrinsic.

  4. In my experience the reason networks offer this, is nothing to do with helping firms grow, but everything to do with ensuring the network keep the FUM within the network.

  5. I am constantly being told that this is an isolated problem, only affecting me- is anyone else suffering with the lack of payments and their inability to reconcile commissions due?

  6. Incompetent Regulators 9th February 2015 at 10:55 am

    By coincidence as an IFA I deal with OMW regularly and we have no problems with fee and commission payments to my firm.

    Maybe Dr D is right!

  7. James Lindon-Travers 9th February 2015 at 11:53 am

    Practice Buy Out loans are nothing new – next Mr Freeman will be renaming the business Allied Dunbar!!

  8. Ha ha… anagram of Allied Dunbar – ‘Dial a Blunder’.

    Intrinsic should have taken upon purchase of Positive Solutions the True Potential back office support system and that would have insured daily payment to Advisers, or maybe Intrinsic doesn’t want to incorporate an efficient Adviser payment process, thinking that funds are best left in their account?

    Agree with JL-T nothing new here and you have to question if they can’t pay advisers today, how on earth will they afford a Practice Buy-Out?

    Might be time for Intrinsic Advisers to consider pastures new…

  9. I commented above (9/2) about Intrinsic’s incompetence. Before my spell with Intrinsic I was with Positive Solutions, who also agreed to pay me trail commissions after I left. They too turned off the commission tap last July without warning, and as yet (mainly because I have ‘bigger fish to fry’) I have managed to get no-one to take responsibility for resolving the problem. We’re not talking big amounts here, but there is a principle at stake. If I owe you money, I WILL pay you promptly. If you owe me money, I WILL (when I have dealt with the higher priorities) pursue ALL avenues to recover monies owed, including legal action and enforcement action through the courts if the debtor does not pay up!

  10. If I am correct Buffalo Bill the payments stopped when PS sold to Intrinsic and the TP system was ditched?

  11. Intresting to see the reaction of Intrinsic senior management team there income stream was turned off

  12. Mr Freeman, a former regional director at Zurich continues with his direct sales ethos! Its not surprising therefore that so many of these anachronistic Networks offer duplications of the direct sales model and ethos. Here we see a Network offering loans to Network members who can then buy clients for the Network to continue to own, no doubt the loans thereafter being services by an income stream subject to the vagaries of regulatory prescription and Network contracts. Go direct and own your own clients, create an equity in your client base that can be sold on the open mark and not just back to the Network.

  13. Victor M, yes it does appear to be the case that my PS income stream stopped when they were sold to Intrinsic and the TP system switched off, but as I have never been able to pin anyone down on this at PS, we can’t be certain. What we can be certain of is that we were correct in our decision to quit the shambles that are PS and Intrinsic. When it comes to adhereing to contractual agreements, they seem to have no morals or business ethics whatsoever.

  14. I have just left Intrinsic; lack of payments is not and isolated issue. It stems from the fact they shut their Chesterfield office, which solely administered IFAs. The lack of incompetence knows no bounds, in doing so they forgot to forward the statements to the new office! I fought tooth and nail to get the majority of fees paid before leaving, but some were upto 8 months overdue at the date I left. There is still more fees with them owed to me, earned early last year, which I am contractually not to be paid until July 2015! That’s more than 12 months, even Tesco aren’t that bad!

    I echo the sentiment of others here, having made the move to DA, it has been far easier than expected. Networks are ALWAYS self serving and compliance caters to the lowest common denominator. I’m also £20k per annum better off!

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