Succession Group chief executive Simon Chamberlain says advisers need to increase their share of the value chain to stop the cycle of advisers “feeding from the crumbs” of insurers and fund managers.
Speaking at the Institute of Financial Planning annual conference in Newport this week, Chamberlain told advisers they need to become more profitable as clients are reluctant to give their money to someone they do not think is wealthy enough.
He says: “Clients, particularly high net worth individuals, don’t want to give their money to someone they think is poor. We have just finished buying a set of five firms and they have got a cheque for £12m. In the next three months they will be visiting their clients with £12m in the bank. If you want to deal with millionaires you might want to be one.”
Succession has 60 member firms, and has completed the acquisition of the first five members for £12m. Earlier this week the company added £500m in assets with the addition of six new members. It says it is in negotiations with a further six companies and expects to conclude the deals before the end of the year.
Chamberlain went on to tell delegates they should increase their share of the value chain by taking control of clients’ investments, and argued Succession’s vertical integration model is “the only way forward”.
He said: “I have never seen so many poor, successful financial advisers in my life. The reason those people get the big cheques is because they took control of the only asset they have got control of, which is the funds. Insurance companies and fund managers make us feed from the crumbs off their table. You can own it all, you just need to know how.”
Succession announced in June 2012 it was launching an in-house platform for its advisers to create a vertically integrated structure. The platform has £1.5bn of assets under managment.