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Profile: Pilot’s Ian Thomas argues FCA should go faster on turning off trail


Entering the financial advice market in 2011 after 10 years in the platform industry was not a conventional move, according to Pilot Financial Planning managing director Ian Thomas.

“A lot of people were trying to get out of the burning building that was the RDR and I was running into it,” he says. “I appreciated there was a reason people were leaving the industry but I saw it as a really good opportunity as the market was moving towards greater professionalism.”

Thomas says he was also keen to escape from the “corporate world” and start his own business.

Having worked in senior roles for firms such as JP Morgan Asset Management, he joined the platform industry in 2002 as IFA sales director for Fidelity. He later worked for Skandia and Axa in head of marketing roles.

‘Change things for the better’

Thomas says he joined the platform industry because it was “one area of the financial services market that was trying to change things for the better”.

He says: “Platforms lobbied hard to get rid of the smoke and mirrors, complex charging structures and vested interests to create a sector that was much more in the interests of the consumer. But I had been in that corporate world for quite some time and I thought if there was any chance to scratch the entrepreneurial itch I had, it was now while I still had the energy and ambition to do it.”

In 2011, Thomas set up Pilot Financial Planning and consulting business Pilot Consulting.

“If you are starting a business from scratch you need funding, so I decided to continue to work in the platform sector on a consultancy basis as a way of creating cashflow,” he says.

“The two are not completely in conflict as remaining close to the platform sector gives me insight I can pass on to my clients. But I have reduced the amount of consulting I do significantly as the advice business has grown.”

Thomas says that with the exception of becoming authorised, the biggest challenge in setting up Pilot Financial Planning was finding clients. He says: “I didn’t come from a bank advice role or another advice business so I had no existing client bank. I had a laptop and a kitchen table to begin with.”

The firm gradually acquired clients through accountancy firm links, local marketing efforts and business acquaintances. It  has found a niche in advising independent schools.

He says: “We offer fee-based advice to senior staff at independent schools, and also to the employer, around final salary schemes and tax.

“Our main offering is financial planning and investment advice so this has been something of a sideways move. 

“It was more of a fortuitous coincidence than a planned strategic masterstroke but it has worked well for us and is an area where we can really add value.”

New entrant

As a relatively new entrant to the market, Thomas would like to see the FCA “go harder and faster” with the banning of commission to ensure all firms are operating on a level playing field. He says the logical extension of the RDR is for commission to be banned on protection products and for trail to be turned off on all policies. 

The FCA has banned legacy payments between fund managers and platforms from April 2016 and all platforms will have to operate an unbundled charging structure from this date.

“If the regulator is shifting the market to a more transparent world, the RDR should be step one but it should also be extended – and I am not seeing any appetite for that from the regulator,” says Thomas.

“What is the rationale for removing trail in 2016 on platforms only? I am quite annoyed the regulator has not gone faster and harder. 

“Our business has never taken commission but we are competing in a market with firms that are propped up by a previous regime and that creates an unlevel playing field.”

Thomas believes the FCA has backed off from further reform due to political pressure over adviser numbers and the advice gap but he says doing so makes it harder for new businesses to enter the market.

“You could say it is a good thing because fewer advisers are going out of business but if it is a barrier to new entrants then there is a downside.”

Thomas believes the regulator also needs to do more to recognise firms that charge fees based on service rather than product. He says: “Our charging is not contingent on products at all – our product is advice. The Conduct of Business Sourcebook completely misses that.

“The RDR has done a lot of good but it has not addressed the fundamental difference between a product salesman and a professional services firm where the product is advice.”


Despite the gripes over regulation, however, Thomas says starting an advice business is the best thing he has ever done. He says: “I swore I would never turn into one of those advisers who whinges about regulation all the time but on the provider side you are slightly sheltered from those realities.

“Equally, though, advisers do not always appreciate how difficult it is to turn around an oil tanker of a life insurance company so there are misunderstandings on both sides.

“Moving from providers to a small advice firm was a huge change and a big risk but I have found it really refreshing and do not regret it for a second.”


2011-present: Managing director, Pilot Financial Planning and Pilot Consulting  

2007-2010: Head of marketing and proposition, Axa Elevate  

2003-2007: Head of marketing, Skandia Multifunds and Selestia 

2002-2003: IFA sales director, Fidelity Investments

1999-2002: Director and head of Nordic region, JP Morgan Asset Management

Five questions

What’s the best piece of advice you’ve received in your career? 

It’s not being employed that’s important, it’s being employable. 

What’s keeping you awake at night?

I sleep pretty well but my key challenges are to find more of the right clients and to manage our business growth while maintaining service levels. 

What has had the most significant impact on financial advice in the past year?

The implications of the RDR have really started to kick in during 2014. 

If I was put in charge of the FCA for a day, I would…

Torch the Cobs and start again from first principles. Less is more. 

Any advice for new advisers? 

Be very clear on who you want to do business with (and who you don’t).


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There are 5 comments at the moment, we would love to hear your opinion too.

  1. Turning off trail quicker would be fine but only if the trail was rebated to the client’s plan otherwise it just benefits the provider. Alternatively a one off payment trail buy out would be an option, but difficult for a provider to factor in a fair multiple to buy it out.

  2. Trevor Harrington 13th October 2014 at 10:10 am

    I agree with Phil.

    Furthermore, I do not believe that Ian Thomas’s business is viable in the simplistic format in which he describes it, and after such a short period of three years. There is something missing from his description.

    You cannot just set up as an IFA, charging fees alone, and also just decide to service the narrow sector which he describes, without some other golden factor, presumably substantial fees from his platform consultancy. There are far too many overheads and there is not enough cash flow in the beginning.

    Three years down the line, I would be more interested in his business numbers, and how it got there, what facilities the business uses, including his client service proposition, rather than his assertions about the end of “Trail”.

    His assertions have no validity unless we know where they are coming from.

  3. I totally agree with the concept of providing a service rather than a product, however, old habits die hard and there are many advisers who have simply converted their commission rates to ” fees “, on the basis that ” 3+1 is the norm “.

    As many legacy contracts are only paying 0.5% trail, there is the opportunity to define the service being offered, and in many cases increase the ongoing fee to a more realistic level.

    The issue with life companies changing their systems is a major stumbling block, why should they incur massive costs to comply with a change in regulation. If the benefits of cutting off trail are matched by the cost of the exercise, nobody wins, the client pays the same charges, the life company covers the additional costs from the trail payments, the advisers go out of business or ask the client to pay again for advice and service.

  4. He sounds to me like another of these holier-than-thou fee-only zealots who’s entered the advice profession only recently with no experience or appreciation of how we arrived at where we are today. Stick to your own knitting Mr Thomas instead of lecturing the rest of us on how you think we ought to be running our businesses.

  5. My brain is bigger and better than everyone else’s, every one should work like me because in my 2 years experience I know its the best !!!
    And I don’t like the fact that other people, may be more successful and better than me so I want the regulator to change the rules faster because, so I can catch up !!! (Mr I Thomas)

    Stop whingeing Mr Thomas and get on with your job !! If and when you have built up a business over the past 20 odd years on the rules laid out at the time its a bit rich when people like you support the withdrawal of trail (not that I have a great deal I hasten to add) on the basis that it would help you is a bit rich !

    Retrospective regulation is not the answer this will phase out of its own accord in time !!

    And I would suggest if you are not one of the advisers moaning about regulation, you are one of those advisers who moan about other advisers who don’t do things like you, or in fact don’t do things how you would like it done !!

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