On the eve of depolarisation, many IFA networks are looking pensively towards a hitherto quiet player rising quickly from the other side of the fence. With the announcement this week that Thinc has secured “massive institutional backing” for aggressive expansion plans, the warning has gone out from the multi-distribution platform that prime adviser firms will be acquired and poached from competitors in its bid to firmly imbed its distribution model on the financial services landscape.
The man behind the move is chief operating officer Simon Chamberlain, who started out in financial services at Merchant Investors in 1998 and rose to director level at Zurich Advice Network before joining Thinc last year.
Growing quickly already, Chamberlain is creating what he believes is an entirely new distribution model based on matching client segments with the appropriate level of service.
He says the success of the network will depend on acquiring the right types of firms and utilising their skills and client bases optimally. He says: “Our acquisition program is about acquiring good businesses and breaking up their client bases to better suit their client's needs.”
The argument is about fitting the right profitability with the advice model suitable to the clients needs. “We are looking to acquire businesses that are at least on par in terms of profit but what is more important is a large client base rather than a lot of RIs.”
When an adviser moves into Thinc's business model, its client base is broken up after a needs analysis is performed to derive what level of service each type of client requires. An adviser then chooses to be part of the IFA service or the tied service and retains and takes on clients from the rest of the business.
Chamberlain argues that in traditional IFA models, 80 per cent of a firm's clients are not adequately serviced and, alternately, only 20 per cent of tied adviser clients require more service than they receive.
He likens the new business model to a law firm. He says: “If you go to a law firm you will not use the same lawyer for criminal cases as you would family matters. Financial clients similarly have specialist needs in each area. For some, they will need financial planning and others simply have transactional needs.”
Chamberlain's business plan is to recruit two multi-tied advisers for every IFA, believing this to be the best combination for client needs and for profitability. He argues that profitability is much higher for multi-tied businesses and a smaller amount of IFAs are needed to service high-income clients.
The company is looking at aggressive acquisition activity over the next two years, recently obtaining considerable institutional investment to grow to 405 multi-tied advisers and 192 financial planners by 2006. Thinc presently has 75 multi-tied agents, 30 IFAs, 27 commercial advisers and 15 specialists in mortgages, general insurance and secured lending.
It is an ambitious plan on a distribution strategy Chamberlain says is completely unique to the industry. His rationale for setting up Thinc was a deep belief that the models of today will not survive depolarisation.
“Everyone knows the old distribution model has had its day. The commission-sharing models of the networks do not work in the new environment that advisers see themselves in.”
Bold words from someone who at one stage was the man that would lure IFAs away from their independence and into the Zurich Advise Network. After 10 years in the industry, Chamberlain took the job of national development director at ZAN in 1999 and was promoted in 2001 to national recruitment director.
While training ZAN regional managers in how to convince IFAs to take the tied proposition, Chamberlain began studying the FSA's depolarisation papers CP121 and CP166.
He says: “It became increasingly clear to me that no single distribution proposition presently on offer would fit the new marketplace. The polarisation has always been a big problem in the UK. However, in countries like the US, this has never been a problem and advisers have been able to offer different levels of service from within the same firm. It is a far more profitable and customer service-oriented model.”
From these ideas came Thinc, which Chamberlain joined in 2003 and asserts is the first truly multi-distribution business in the UK. “Being first is a brave move but someone has to be first and we believe now we have become the catalyst for change in the industry.”
Chamberlain is scathing about the claims of other large distributors. “All other networks keep banging on about their new multi-tie offerings but the reality is they are scarred by their past. Previously, they were banging on about independence being the be all and end all. How can they be believed when they change their tune so easily.”
He is a firm believer in saying what you mean and meaning what you say, deriving great inspiration from the likes of John F Kennedy and Margaret Thatcher, and does not mind taking an unpopular line if he is confident in his beliefs.
At the University of Central England, he says he was the only Conservative in an institution of some 20,000 students. “This made for some very controversial speeches but helped me to have faith in my convictions,” he says.
Chamberlain says he has thrived on politics from an early age. At 21, he was the youngest member of the Conservative Party's central council. He believes his political convictions have also helped him formulate his business beliefs as well.
In 1998, after leaving J Rothschild Assurance, in which he was one of the founding partners, Chamberlain took 18 months off to investigate the connection between politics, personality and success, writing a thesis on why people need to be recognised and why some people can achieve more with the same qualifications and background as others.
He recommends taking time as a gap year once in a while, saying that unless you can understand yourself, it is hard to understand the world you work and live in, a message he feels is sadly neglected in other organisations.
He says: “Politically, I believe in self-determination based on putting people first and protecting the people who rely on you. Transferring that to the business world is simple when you look at consumers as relying on advisers and advisers as relying on Thinc. This is a simple lesson we have learnt but other networks need to learn it sharpish or it is never going to happen for them.”
Born: London 1965.
Lives: Midhurst, Sussex with wife and three children
Educated: Warden Park Comprehensive; University of Central England, BA hons politics and economics Career: 1989-90: financial adviser, Merchant Investors; 1991: sales manager, Royal Life; 1992-1997: founding partner, J Rothschild Assurance; 1998-1999: gardening leave; 1999: national development director, Zurich Advice Network; 2001: national recruitment director, ZAN; 2003 to date: chief operating officer, Thinc Career ambition: To create the most professional financial services distribution business in the UK Life ambition: To be happy
Likes: Horse racing, politics, opera,
Dislikes: Dishonesty and Crystal Palace FC
Heroes: JFK, Margaret Thatcher.
Drives: S500 Mercedes for work and an SL Mercedes on the weekend