View more on these topics

Profile: Progeny’s Neil Moles on seeing opportunity in regulation

Progeny Group managing director on the opportunities provided by Mifid II and GDPR to improve business

You won’t find Progeny Group managing director Neil Moles complaining about the forthcoming General Data Protection Act deadline or Mifid II. Moles’ response is to embrace new legislation and use it to improve the firm.

“Any legislation can be used to improve your business – you have to remember that someone, somewhere has thought long and hard about it. Some legislation will have unintended consequences, but you have to embrace it and use it to your advantage,” he says.

That is exactly what Progeny did with Mifid II. “We haven’t experienced any problems with it,” says Moles.

“Embracing it has allowed us to review our compliance process and put better systems in place. Sometimes we look at legislation and work out that it doesn’t apply to us, but it’s good legislation and we want to comply even if we don’t need to.”

Compliance tip: Five steps to GDPR compliance

Data security and communications with existing and potential clients are of particular relevance now. Under GDPR, advice firms will have 72 hours to report a data security breach to the Information Commissioners Office and any individuals affected, so they will need to have a strategy.

Advice firms also need to obtain consent from clients and potential clients that they are happy to receive communications from an adviser. Clients need to actively opt in to communications, rather than firms sending emails that put the onus on the client to unsubscribe.

Moles sees GDPR as a force for good. “I hope other firms take it seriously, as opposed to justticking boxes. We are the custodians of client data. We have to be careful about how we handle it and give it back to the client when they want it,” he says.

As Moles points out, it does not impact all businesses in the same way, which is what makes it difficult to deal with. Having said that, he believes advice firms can learn from the way businesses in other sectors are approaching their obligations under GDPR.

Moles also believes it will force businesses to improve their technology and the speed of their processes, which can only be a good thing for the client.

However, GDPR compliance will be a particular challenge for consolidators who have acquired businesses but have not merged their back-office systems, having to wade through a mass of different systems as they work to comply.

Tim Sargisson: How GDPR will hurt adviser recruitment

“When we acquire businesses, everyone moves to the same back office system – we get everyone on the same platform – but I don’t think that is true of all firms. They acquire businesses and leave the legacy systems in place. GDPR will force better efficiency in this area and better outcomes for clients,” he says.

Somewhat ironically, Moles also expects GDPR to contribute to further consolidation as smaller firms with less revenue and fewer employees grapple with the demands of increasing regulation that makes it harder to be a one-man band.

“There are some amazing small firms out there that are doing this well and some big firms that are not doing it so well. It doesn’t matter how big you are, but we need to recognise the challenges faced by smaller firms with potentially less revenue and less money to employ people to deliver the solution.

“There is a risk in being one person in one office – but the networks are helping,” he says.

Moles is one of those rare people who always knew he wanted to work in financial services. He started off with Skipton Building Society and moved across to its advice arm, Skipton Financial Services.

“I talk about transparency and professionalism a lot – even early on in my career I wanted to be proud to say I’m a financial planner and this is a profession,” he says.

After a spell in admin at Bates Investment Services, he joined Manor Financial in 2002 as a paraplanner, then qualified as a financial planner. In 2004, Moles met Lawrence Scoffield boss Dominic Scoffield and told him he would join the firm if he could buy it.

The audacity amused Scoffield and, after four years working together, Moles led a buyout of the firm, which later rebranded as Progeny.

“I had a vision and needed a starting position,” says Moles, “Dominic gave me a chance.”

Once at the helm of his own firm, Moles reorganised the business and decided to bring legal services on board in 2015. Clients who were seeing lawyers and accountants for different bits of advice when selling a business, for example, could then benefit from a joined-up process.

The group now has four divisions: Progeny Wealth, Progeny Asset Management, Progeny Private Law and Progeny Corporate Law.

Progeny Wealth, the wealth management side, has been growing through acquisition. But Moles believes Progeny’s strategy of “acqui-hiring” – bringing the best talent into the Progeny Group by buying the businesses of owners who would never want to become employees – sets it apart from the consolidators.

“Go for it, but think carefully”: Advisers share experiences of opening new offices

“These people own their own businesses – you can’t recruit them, you can only acquire them. We don’t want to acquire the businesses and for those people to walk away. Every deal is different, but we are able to acknowledge that great people end up in roles that don’t best suit them.

“We want to release them back into advice and managing people, so they are able to run the business and talk to clients, not dealing with the back office and compliance.”

For Moles, it is important that the businesses are aligned before any deal goes through to avoid those that end up being too difficult and expensive to integrate. Moles believes that just buying client banks does not work post-Mifid II, because firms run the risk of having too many clients to serve properly.

“An adviser can’t provide advice and ongoing service for 200, 300 or 400 clients,” he says. “There are lots of good consolidators, but they primarily focus on vertical integration.

“They try to cover the advice process from the cradle to the grave by offering the advice, the wrapper and the investment management. That can be successful but I’m not sure the client’s best interests are always served by that process – it may depend on the practice and the consolidator.”

Five questions

What is the best bit of advice you’ve received in your career?

You’ve got two ears and only one mouth – so listen.

What keeps you awake at night?

Not a lot. If anything, it’s the constant search to improve.

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

Mifid II.

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

Sit round a table with advisers and talk about the issues in the profession. We need better communication.

Any advice for new advisers?

Take your time, learn how to be a good adviser and don’t rush your career.

CV

2016-present: Managing director, The Progeny Group

2004-2016: Financial planning consultant, joint managing director, then managing director, The Lawrence Scoffield Group

2002-2004: Paraplanner then financial adviser, Manor Financial

1996-2002: Various roles at Skipton Building Society/Skipton Financial Services

Recommended

Profile: Fiducia on really knowing your clients

Fiducia managing director on ‘good old-fashioned’ customer service in the digital world Anthony Scott is adept in the art of communication. As an adviser and a novelist (he has written the novels ‘On Ashover Hill’ and ‘The Birthday Gift’) it is crucial for the Fiducia Group managing director to engage and build a rapport with […]

Newell Palmer

Profile: Newell Palmer boss on keeping acquisitions simple

IFA Newell Palmer is growing through acquisition but group managing director Philip Stepp will not retain the staff of acquired firms. When Newell Palmer group managing director Philip Stepp founded the Midlands-based IFA 25 years ago, he had big ideas. Rather than create a lifestyle business and keep it small, Stepp was determined to grow […]

4

Profile: Clifton Asset Management on the ‘quiet crisis’ in Sipps

Clifton’s Adam Tavener on pension-led business funding and the crisis in the Sipp market There is a “quiet crisis” going on in the self-invested personal pension market, according to Clifton Group’s chairman Adam Tavener. Clifton specialises in providing services to SMEs through four business units – Sipp and small self-administered scheme subsidiary Morgan Lloyd; financial […]

1

FOS fields 40 cases over collapsed Sipp provider

The Financial Ombudsman Service has confirmed it is dealing with just under 40 open cases against collapsed Sipp provider Lifetime Sipp. The Lifetime Sipp Company, which entered administration this month, was found to have links to unregulated investment schemes, and has now appointed Kingston Smith and Partners as its administrator. Lifetime Sipp has not disclosed why it […]

The Merchants Trust

Simon Gergel, portfolio manager, The Merchants Trust, Allianz Global Investors, discusses the aim and objective of the fund, what challenges there are in running a concentrated portfolio, where to find the most value in equity markets and how the portfolio is currently positioned.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment