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Old Mutual advice launch ‘threatens advisers and savers’


Old Mutual Wealth’s decision to launch a national advice division could pose at threat to networks and lead to bad outcomes for investors, experts warn.

The new business will be branded Old Mutual Wealth Private Client Advisers and will draw on the investment offerings from Quilter Cheviot and Old Mutual Global Investors.

The business will aim to offer advice through 10 regional offices employing around 250 qualified advisers plus support staff.

Old Mutual Wealth says it plans to grow the business through client bank acquisitions and strategic partnerships.

Intrinsic has separately announced plans to acquire Sesame’s Financial Adviser School, with recruits joining Old Mutual Wealth Private Client Advisers.

Former Sanlam Private Wealth chief executive Nigel Speirs, who joined Intrinsic in May, will lead the business as managing director.

Old Mutual says the new business will grow through client bank acquisitions and “strategic partnerships” but will not target existing advised customers of either business.

Old Mutual is also piloting an online simplified advice service which can be white-labelled by advisers.

The provider is working with five advice firms to trial the service ahead of a wider roll out next year.

Threesixty managing director Phil Young says: “Old Mutual announced their intention to create their own version of St James’s Place some time ago.

“They’ve been aggressive in the market offering funding of up to £15,000 to advisers who join Intrinsic as part of their restricted proposition.

“There’s more than enough business for everyone so I don’t see this worrying too many firms, although it may be seen as a threat to those nationals and networks looking to recruit advisers in that part of the market. I see this as a battle over advisers rather than clients.

“National and network models are already under pressure and highly focussed around low charges to the adviser to attract and retain. The likes of Old Mutual using their balance sheet to offer initial capital as well will unnerve a few large firms.”

Chase de Vere head of communications Patrick Connolly says consumers could also lose out if vertically integrated providers focus on product sales rather than giving appropriate advice.

He says: “We are seeing increasingly blurred lines between product providers and product distributors and that represents a threat to a lot of adviser firms.

“I think this is bad for customers because providers will be trying to sell products over and above giving people the right advice.”

However, Informed Choice managing director Martin Bamford argues Old Mutual’s move “is definitely no threat to established firms”.

He adds: “I’m not convinced that financial planning is particularly easy to scale, especially not on a profitable basis. We have never come up against a national firm in competition before and I don’t expect to in the future.

“Advisers who look after their clients have nothing to fear in terms of ‘poaching’ as loyal clients will not be tempted to move adviser, regardless of the brand behind the approach.”

Expert view

Why we’re launching a national advice business

I am a passionate believer in the value of financial advice and the benefits it brings to individuals and their families, as well as for the wider prosperity of society. For that reason I am extremely excited about the launch of our new national advice brand.

It is this same belief in the sector that prompted Intrinsic’s decision to invest in the Financial Adviser School currently run by Sesame. It is absolutely vital to the future of the sector that financial advice is seen as a rewarding career choice and we pave the way for the advisers of the future.

However, we recognise advisers may have reservations about the announcements we have made. In particular, some of you may be concerned about working with a provider that also has an advice capability under its own brand.

Let me be absolutely clear: our new national advice business will never target existing advised clients invested with any of the businesses within Old Mutual Wealth.

The company has invested heavily in specialist support, technology and product enhancements over the last two years. Those investments are an indication of our firm belief in the future growth of the sector and our dedication to supporting financial advisers across the UK and internationally will not falter.

Nonetheless, we do see opportunities to make the benefits of financial planning available to a greater number of customers in the UK. There remains an underserved group of consumers that will take comfort from the simplicity of advice, administration and product solution through a single, trusted brand. In response to that demand we are launching Old Mutual Wealth Private Client Advisers.

This national advice service can sit alongside the advice given by the local and regional adviser firms operating today. Many clients will prefer to take advice from a local or regional adviser business, keeping their chosen product providers at arms-length. Where that is the case, we will continue to support your business. But we know there is an advice gap in the UK and by giving customers increased choice we can help to tackle that problem.

Paul Feeney is chief executive of Old Mutual Wealth



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There are 4 comments at the moment, we would love to hear your opinion too.

  1. We can trust Old Mutual Wealth. Just have a quick look at this – they are enforcing bulk conversions to clean share classes in late 2015 for Collective Investment Accounts and ISAs, 4 months early. In 1 or 2 years time there will be a story about how Old Mutual Wealth has a duty to its shareholders and some advisers haven’t been in touch with their clients every month, so naturally they are ripe for the picking. And so it will go.

  2. I admire Old Mutuals push in this area but like Martin Bamford said they are no threat to established businesses providing the job is being done correctly.

    Given some of the feedback I have seen from the national pension firms and the fact that pension wise is not having the big hit that everyone thought, I cannot see this working longer term. Yes it has a place but a race to the bottom on cheap and cheerful will only ever have a limited attraction for a small part of the market.

    What I have noticed is since all the warnings about scams has become more mainstream (thank goodness) the public are shying away from distance advice. I have noticed this a few times recently when clients were dealing with legitimate IFAs albeit over the telephone or internet; and they decided against it and went with ourselves – even though it clearly costs more for the personal face to face advice. There is a message in that especially as we consider new forms of delivery to fill the advice gap. It might work for the younger clients who like their social media, ebay and amazon; but retirement and investment planning for baby boomers? I would be surprised if it did. Afterall price is only part of the equation.

  3. I will not be calling the Samaritans any time soon. Yes, customers will buy brands and can be influenced by marketing hype and corporate speak, the clients who chose me to work with them are perhaps more discerning and therefore more loyal.

  4. So basically this is direct sales? Will it be restricted?
    So they are going to grow by acquisition. That sounds great for them and not so great for the poor old clients, who have probably had an IFA for years giving personal advice. Now the big firm takes over and advisers come and go. The advisers give straightjacket advice – after all big firms have to have tight control and will they be now purely limited to OM products? Will they have access to Investment Trusts? Decent cash funds? Will the older clients be told about Class 3A Voluntary Contributions? (Only a brief window). Will they be advised of the new tax-free limits of Rent a Room – neither of which will add to OM funds under management.

    I have a new theorem. The provision of truly holistic independent advice is in inverse proportion to the size of the firm.

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