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Simon Chamberlain: ‘Advisers feed off crumbs from providers’ table’

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.

Click here to read all the latest news from the IFP annual conference

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Comments

There are 19 comments at the moment, we would love to hear your opinion too.

  1. long on rhetoric but short on analysis

  2. Fee-based Adviser 3rd October 2013 at 11:14 am

    I didn’t realise that snake oil was still being sold.

    I’d rather be poor and maintain my integrity, than transfer to the dark side.

  3. In essence he is making a point that I have made many times before – only his is as usual OTT. You certainly don’t need to sell out to his sort of firm, but I do agree that it isn’t ideal to be advising others on their wealth and assets when you yourself don’t have a pot to pee in.

  4. There you go creationists ….see Dinosaurs were real 😉 .

  5. Fee-based Adviser 3rd October 2013 at 12:06 pm

    @ Charltonman

    No, you are absolutely wrong. As a Pastafarian (a member of the Church of the Flying Spaghetti monster), we know that dinosaurs were not real, but their fossils were created as is by the holy FSM, when he touched them with his divine noodly appendage.

    ……. And what comes of Chamberlain’s mouth is equally suspect.

  6. So the suggestion of an advice gap is a myth eh? So all the millions of ordinary savers who have built the industry, often via men from the Pru (bike clips firmly tethering trousers), Pearl, LV, London & Manchester, Refuge, COOP etc, will now turn their noses up at the poor IFA turning up in a humble Golf, Focus etc.
    If you are HNW you do not need advice as you are unlikely to starve!

  7. @ Robert Davies

    What a very silly post – if I may say so. HNW (horrible title) are very much in need of advice. They made the money – now they want it looking after. They don’t have the time to do it themselves, so they employ us. It’s a virtuous circle, we help them and they have the means and inclination to pay us.

    Those to whom you refer were conspicuously ripped off by the blokes on bikes. Sure the ordinary savers built the industry – you are quite right. They paid outrageous charges for paltry if any gains and were conned throughout. Companies got fat at their expense. The agents didn’t do too badly either for riding a bike all day. Yes, they put a few pence by to get buried, but from the maturing plans that I used to see they were awful value as savings vehicles.

  8. I’ve now read a couple of articles on statements made by Mr Chamberlain at the IFP conference. Admittedly I don’t know the man, and statements as part of a larger speech can be taken out of context, but none of what I have read makes great PR for Succession.

  9. @ James Hurdman

    Sucker! In the main the acquisitive firms steal companies – they don’t buy them. I have had experience of selling a company – but not in Financial Services.

    Our industry doesn’t work by the normal conventions of M&A. You have no idea of the small print. And it isn’t what I would call a sale. You can bet that you are tied in to the acquirer. It isn’t just a matter of selling the business and walking way – which is what one would normally expect.

    Good grief, look at the man’s background. He’s great at selling the sizzle, but the steak is never what’s expected.

  10. “feeding from the crumbs” not so much evolution but substitution!

  11. I wonder why Succession still only submit abbreviated accounts as well? There appears to be a press release on their website suggesting that they have submitted audited accounts for the period to 31st December 2012 showing a profit of £1.3m. Well not in the ones I’ve just printed off which, as they are abbreviated don’t show a P&L, but interestingly show a negative year on year movement of the P&L account of just short of £1m. There is also a rather interesting “Other reserves” of £2m making up the shareholder funds. Why has the press release not been reported yet?

  12. Simon Chamberlain 8th October 2013 at 9:05 am

    Bert, for a man that tries to portray himself as an expert, your understanding of the UK.gaap accounting regulations is at best low, at worst just misleading. I pray to God you’re not an accountant with clients depending on you .

    Succession’s accounts are no mystery , you simply take the standard p+l which was – 900k and add to it the reserve accounts of +£1.9m giving a net profit of £1m for 2012 from the platform business . Further, there was a £300k dividend that benefited shareholders giving a total profit of £1.3m.

    If we had decided to use international standards accounting methods, all of the above would have gone through the p+l . Hey, but I guess our accountants, Price Waterhouse, are not as good as you! But then again, we don’t know who you really are do we ? Pseudonyms are for people who are cowards, aren’t they? S

  13. Hoo Hoo Bert!

    It seems you hit a nerve.

    To plagiarise the bard: “The gentleman doth protest too much, methinks”.

  14. @ Simon Chamberlain – I would rather stick to asking factual questions on the accounts. Whilst PWC may be your accountants they certainly are not your auditors as you will know as small businesses who have abbreviated accounts don’t need to have an audit carried out. You should also know that because your own accounts state that in them.

    Obviously I cannot see whether a dividend has been paid from these accounts but I would ask given your P&L reserves have increased from -£6.7m (2011) to -£7.7m in the current year how you have managed to pay a dividend with no reserves. In fact your accounts actually say that the unpaid accrued dividends in the year were converted to equity as were some directors loans as well. A cash generative, profit laden business surely wouldn’t be doing that?

    These are the figures shown in your accounts posted with Companies House so whether it is GAAP or IFRS you can see how the maths don’t actually stack.

    As you are so self-righteous to everyone else I would ask why Money Marketing printed all of your press release except the profit figure?

    Robert

  15. @ Harry – I have no specific gripe with Succession but, if you are going to criticise other businesses and persuade people to sell their businesses to you, then you should be open with your financials and also understand them. Quite simply he is talking nonsense.

  16. The advantage of being open and submitting full accounts is there is nothing to hide. Good or bad…

    I don’t feed off a providers table or someone else’s hard work and advice. I share the table with my clients, which is probably why I earn about the same as them rather than more.

  17. @Bert & Phil

    Absolutely. But I repeat what I said in previous posts above. All sizzle and little steak. The model is Allied Crowbar 21st Century. The guys at the top of the pyramid earn off the efforts of others with nothing much in return.

    I don’t see them actually buying anything. They advance money and then expect the vendor to work it off. That’s not an acquisition in my book.

    Anyway we’d better go steady. We’re likely to give the poor bloke a stroke. A snake oil salesman never likes to get caught out.

    Bert, give my love to Mary.

  18. I certainly will Harry.

    Since I hung up the chimney sweep I have had to compete with an over-achieving spouse. May explain my seemingly over pedantic ways.

  19. Succession aside guys (and simon has his own business to run ) my original point was ..advisory businesses should be sustainable on advice . Not moving bits of the value chain.

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