Succession Advisory Services is launching an in-house platform for its advisers to create a vertically integrated structure.
Industry experts say other large-scale advice firms may make similar moves as a result of the FSA’s RDR charging rules and in an attempt to increase their share of the value chain.
Succession white-labels the Independent Funds Direct Limited platform, which holds all client monies and shares the platform charge with Succession but Succession chief executive Simon Chamberlain says this arrangement will breach adviser-charging rules after the RDR.
He says under the new structure, the firm will have full client money permissions which will enable it to act as the platform. It will continue to power the platform with IFDL technology and Succession will pay IFDL a fee for its services.
He says client suitability for the platform will be assessed on a case-by-case basis but he expects around 70 per cent of clients to be placed on it.
Chamberlain says: “We will have the responsibility and hold the money and simply outsource the technology. We feel this is the best way for distribution firms to operate after the RDR as opposed to white-labelling, where we will not be able to split the fee.”
The platform restructure is subject to FSA approval.
The Lang Cat principal Mark Polson says: “This is a very interesting move and I think we will see more of this from firms that have the scale.”
IFDL managing director Hugo Thorman says: “It is an option for other firms as an alternative to splitting the platform charge with IFDL, which will not be allowed after the RDR.”
Succession has 45 firms with £6.5bn assets under advice. Of those 45, five have so far been bought outright. In December, the firm announced the launch of its national proposition, Succession Wealth Management.