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Profile: ‘You never see an adviser proud to call themselves restricted’

IFS Wealth & Pensions director on why being independent really matters and dodging the DB transfer bullet

Having personal experience of something gives you the authority to speak about it in a way someone who has not gone through it first-hand never can. It is what separates the pontifications of armchair critics from coalface opinions that have real clout.

During his career, IFS Wealth & Pensions director Ricky Chan has gone from being a tied adviser to a restricted adviser, before finally settling on independent advice. So, when he explains why he is proud to be able to call himself independent, it carries weight.

“Independence is very important for a young and growing business like ours. You sit on the same side as the client and without having a preconceived idea of products and solutions, you can really understand what they are looking to achieve. If you don’t have that, your hands are tied,” he says.

Chan acknowledges there are plenty of successful and established restricted whole-of-market advisers who are effectively independent in all but name. But for him, the name does make a difference.

“If you look at most areas in the profession, you never see a restricted adviser who is proud to be restricted. It’s either covered up or not mentioned at all, while most IFAs are proud to be independent,” he says. “If you’re more established, it is true that clients may not care if you are restricted as they’ve had those relationships for 30 or 40 years. But it’s different for young and growing firms. Being independent is key.”

Five questions

What is the best bit of advice you’ve received in your career?
Success leaves clues. You don’t have to reinvent the wheel, just model yourself on those who are successful and you will be too.

What keeps you awake at night?
Podcasts, making Fantasy Football transfers, gaming video streams and wishing I had gone to bed earlier.

What has had the most significant impact on financial advice in the last year?
The rise in defined benefit transfers and the poor and unsuitable advice being given.

If I was in charge of the FCA for a day, I would…
Scrap the FCA Handbook and start again, implement a longstop and ban phoenixing.

Any advice for new advisers?
Find a great mentor and absorb their knowledge and wisdom like a sponge.

Paul Lewis: ‘I would never recommend a restricted adviser’

IFS Wealth & Pensions was established in 2013 by Chan and his twin brother, Alan. Both had started their financial services careers as tied advisers at the Co-operative Insurance Society before moving on – Chan as a self-employed adviser at a firm that was part of the Intrinsic network, and Alan at an IFA firm in London.

Setting up their own business was born out of the frustration that came with seeing how many of the bigger IFA firms prioritised shareholders at the advisers’ expense.

“It was hard to find a firm that treated advisers well, rather than just as a number. We thought, why work so hard to earn other people money when we can build something ourselves?” says Chan.

With no prior experience of running a business, the brothers launched their firm as an appointed representative of the IFS Group.

“We worked closely with their compliance director, Peter Duffy, and he has had a significant influence in our professional development since,” says Chan.

They became directly authorised in 2015 when the IFS Group was sold to a consolidator. “We had ruled out going directly authorised initially, as we thought it was too big a jump. Our peers said it was a lot of work and it looked a scary place to be,” says Chan. “But we didn’t want to risk joining a business that could be sold again or not liking the way the consolidator did business.”

Chan says if he could go back and launch the business again, provided it had the right turnover, he would go straight to being directly authorised.

“It’s definitely the place to be, providing you’ve got good advice processes and you are looking to build something long term that you have control over,” he says.

After becoming directly authorised, Chan was interested in getting into the defined benefit transfer market, as he and Alan had passed the AF3 qualification. However, Duffy advised them not to dabble in it because of the risks involved and the lifetime implications to professional indemnity insurance.

“Now we see many firms struggling to renew their PI or who will have high premiums or excesses for the life of the business, so we feel as if we dodged a bullet there.”

Chan has previously spoken to Money Marketing about building relationships with accountants to generate client referrals. Having recognised the value of professional connections early on at IFS Wealth & Pensions, he says it made sense to launch a separate corporate services firm in 2015 to help smaller businesses deal with the initial implementation of auto-enrolment. That firm, IFS Corporate Services, was able build relationships with accountants and payroll providers that would feed through to the main IFA business.

With the initial auto-enrolment staging process now complete, the corporate services side remains a very small part of overall business.

“We’re coming to the end in terms of auto-enrolment opportunities – they are few and far between. Companies do switch providers but, when it comes to growing the business, this opportunity is not for us,” says Chan.


2013-present: Director, IFS Wealth & Pensions

2011-2013: Financial adviser, Ridgeview Financial Services

2010-2011: Financial adviser, Co-operative Insurance Society

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The brothers prefer to focus on growing their main business organically while keeping an eye on like-minded businesses to acquire.

“It’s not something we’ve got experience in, but speaking to other business owners, the acquisition is the easy part. Merging two businesses is the challenge, as you have to ensure the business is aligned with the processes you use and that you’re happy with any liability. If there is anything that isn’t great in its past, you have to think, do you really want to buy it?”

Not surprisingly, given the ethical slant of Chan’s first employer, the Co-operative Insurance Society, looking after clients properly also involves advising them in this area.

“Younger clients are interested in where their money is invested. I saw a new client last week who had seen her parents’ IFA and realised she couldn’t have a conversation about ethical investments with him.

“When she came to me, I told her what it means, the impact her money could have and the risks involved,” he says.

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Chan has always had a close relationship with his brother, and that is reflected in their business partnership.

“Growing up, Alan and I had the same sort of friends,” he says. “We may have different opinions, but we’re both logical thinkers and we understand where each other is coming from.

“It’s hard to find someone to go into business with who you can trust in terms of pulling their weight and looking after clients properly as you would yourself. Since we went directly authorised, there’s a lot to do, so I’m happy I have Alan as a business partner.”



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There are 9 comments at the moment, we would love to hear your opinion too.

  1. Right on Ricky! If you really want to be a top flight adviser independence isn’t only best it’s the only way to go. And remember small is beautiful. The larger the firm the further away from true independence.

  2. Neil Liversidge 16th April 2019 at 5:07 pm

    Well done Ricky and Alan. Totally agree re’ independence. We also decided to stay right out of DB transfers for precisely the same reasons. In my days as a compliance officer 1991-1995 I kept my then-employer out of DBs also, albeit that I nearly got fired for doing so!

  3. And a thumbs up from me !

  4. How can you be independent and unable to advise on DB transfers? That of course is the way the market has gone but if someone has retained DB benefits you are failing in your duty to consider them in their planning. Yes you can refer elsewhere but that means handing the client over to another IFA -lock stock and barrel. Thanks FCA and FOS for that one.

  5. ALL advice firms are restricted on one front or another. It’s just a matter of degree.

    You, Harry, were restricted in that you abhor all and any structured products and (from what you’ve written in the past) never recommended one to anyone. I don’t know whether you were into VCT’s, EIS’s and such like but, if your advice proposition excluded such products as well, that fact would have represented another restriction.

    • Sorry Julian that is just wrong. To be independent Harry had to consider those products and then dismiss them as unsuitable for his clients. He may well have reached that decision following a thorough analysis of the products you have listed and that is, indeed, independent advice

      True independence is a state of mind(an open one)with no preconceived ideas ahead of know your customer and an understanding of what they need to do to achieve their goals and objectives in a suitable manner

      And now I need to go and have a lie down because I have found myself defending Harry!! 🙂

      • Unsuitable, on a blanket basis, for every single client whose objectives he ever considers? I’m not sure that meets most people’s idea of open minded.

  6. Independence is a state of mind. There is an enormous range within the title of ‘restricted’. Indeed, it’s possible to offer a far wider range of investments and services as a restricted adviser than it is under the FCA definition of ‘independent’. Like it or not, RDR made the term meaningless.

    By and large client’s don’t care. If they did then the likes of SJP would be out of business pretty damn quick. What clients really want is service, attention and reasonable solutions.

    • Well said. The only thing I’d add is that clients want advice they can understand, at least to as great a degree as is reasonably possible. If we’re going to mention SJP, none of the (admittedly few) clients over whose affairs I’ve cast my eye have any idea of what they’ve got or why, e.g. an onshore investment bond (or three) vs. an ISA or a GIA and an ISA, the former being rolled over into the latter over a few consecutive tax years.

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