Tim Sutcliffe, managing director of pi financial, says the group offers a third way for advisers between a traditional network model and full independence. The typical network model has been one where compliance and investment choices were rigidly controlled but pi aims for a hands-off approach, allowing advisers to take as much or as little support to suit their needs.
Sutcliffe says: “The trouble with many networks is that they aim to sit above the adviser. We believe any network should sit below the adviser in a supportive role, enabling them to continue to give advice in a good way.”
Pi took the decision from the start that it would cap adviser numbers at around 120. Sutcliffe says: “If we had 1,000 advisers, we couldn’t give them any personal service – they just become adviser A in Cornwall. We provide all the things that a network would – compliance, training, business development – but it is very personal and allows advisers to do what they do well, which is interact with clients. Our senior management are all active advisers and therefore know what is needed in terms of support.”
The origins of pi financial lie in CP121, when it saw that being small did not enable advisers to have the best opportunities or generate economies of scale. It aimed to create something where people could share ideas and talk to each other. As no one offered a forum, the group was originally just a group of like-minded people. It evolved into an IFA consortium, where IFAs could generate economies of scale without losing sovereignty and worrying about whether they were in control of their own business.
Sutcliffe says: “We believe that advisers should be allowed to recommend products that they feel are appropriate for their clients, not what fits
in with the risk analysis parameters of the network. Everyone needs some guidance but it does not have to be prescriptive. We believe ours
is a modern approach.”
He says the firm is premised on the view that the strength of an adviser is the individual creativity that they can bring to clients. The group has a “track” for inexperienced advisers but the majority of its members are aware where the regulatory line is drawn. Sutcliffe says pi’s job is to let advisers know when they are moving too far away from that line.
We want advisers who have a high degree of synergy with our existing advisers – they can work with each other and work with us
How does pi select the advisers? Sutcliffe says: “All types of adviser come to us but we do attract a professional type of adviser, who is well
equipped to deal with the RDR. We want advisers who have a high degree of synergy with our existing advisers – they can work with each other
and work with us.
“All our advisers share best ideas and we have a number of events where they will network. These include training events, though we also have online training. We have a big meeting quarterly, which is the main networking opportunity.”
On the investment side, the group offers risk questionnaires based on psychometric testing. It also has core portfolios that come with various
asset allocation models. These are default portfolios and are monitored on a regular basis. However, they are not compulsory and some of pi’s advisers will use them for asset allocation or fund selection or different combinations.
The group is taking a similar approach with its RDR transition planning. Sutcliffe says: “Where advisers want it, we are sitting down with them and looking at their business model. We will put a plan in place for them that takes into consideration client segmentation, adviser remuneration and how advisers should be positioning themselves. On the training side of things, we are a long way down the line. We have our
Adviser Academy, which helps people through the JO exams.
“We help advisers work with other groups at a similar stage of transition. We will give them support on cashflow, extend loans, etc. We help people to transition across to in-house advisers. We can also provide an exit strategy.”
Sutcliffe says the key is to get advisers who want to work with the firm’s other advisers and generate stability for the group as a whole.
He says: “It is not a traditional network model. Historically, networks have been very prescriptive and, if anything, they have got more prescriptive recently. Good management of information is key. We want to ensure everyone stays the right side of the regulatory fence and we are confident that we are doing that well.”