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Simon Chamberlain: Why Succession is changing its structure

Customers deserve a thorough individual assessment

As we come down to the last six months before the RDR, there are still many decisions to be made by many wealth managers. The decision over independence and restricted is the main one but there are other decisions for firms like Succession over the nature of our relationship with the client and the use of platforms in the future.

If you consider what is best for the client before each decision is made, then the answers become clear. Our key objective is to deliver financial planning to the clients of our member firms and help our members deliver that service in the most cost-effective and professional way possible.

That is why we see platforms and fund management as pure commodities. Succession will move its relationship from being a white-labelled distributor of platforms to becoming a white-labelled operator and changing the relationship held historically. The benefit of this is we will use our volume in the market-place to drive down the cost of fund management on behalf of our clients through the use of our platform and we will drive down the cost of technology by using our size and scale in the market to benefit our member firms and clients. I am happy for technology providers and fund firms to battle out the price war on these services and Succession will continue to observe that war and choose the best solution for our clients.

There has been much said about what the FSA will and will not allow but it should be what we as advisers do. In Succession’s case, every client is individually assessed and we would hope that would lead to a majority of clients needing a very similar solution but the world is made up of very different people and there will always be reasons to deviate from a central model. No client in a Succession firm will ever be shoehorned into any particular solution. This is equally true with the debate on independence versus restricted.

We believe there is a misunderstanding over the requirements of being independent and restricted, in that we believe every client should be assessed as if they were in a whole-of-market proposition. All that “restricted” refers to is a limitation of product ranges that will be made available to clients at the end of that analysis. This will mean if you are restricted you will be turning clients away that do not fit your central proposition. I cannot see how that benefits our members’ client base, which is why our investment proposition will remain independent and whole of market.

It is important for each firm to have a core proposition to offer clients. It is impractical to believe advisers’ client bases will be spread across many platforms, as, in a majority of cases, history shows circumstances are fairly similar.

But this can only be ensured by a proper individual assessment for every client. This should not be done as a result of the RDR but because it demonstrates a respect for the client you are dealing with.

Simon Chamberlain is founder of Succession Advisory Services

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