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The goal machine

When I entered the industry in 1991, we regularly used to have clients with five or more investment or Pep accounts with different providers. Diversification between different managers has always been important – no one manager can ever claim to have been strong across all different investment disciplines – so having multiple accounts with different providers was really the only way to achieve the required level of manager diversification.

Joel Adams
Joel Adams

We were early adopters of platforms and used the original Selestia products when they launched in 2002. Back then, the two main attractions of platforms was consolidation and online access to valuations. This addressed two of the main frustrations we had at the time – giving us the ability to hold different invest-ments managed by different providers in just one account and, second, relieving our back office team from making multiple phone calls to product providers for valuations.

Platforms clearly still offer those same advantages today but they have now evolved into a business tool for us rather than just a suite of products. Our advice in 2002 mainly involved the selection of the best products for our clients’ requirements. Fast-forward to 2010 and our advice is all about the client and helping them achieve their financial and lifestyle goals, so financial and investment products have become incidental to the advice we offer. Product providers now have to make sure their propositions stay ahead of the pace of change in the industry and the requirements of advisers.

Skandia Investment Solutions’ products are now embedded into our processes and client proposition. Once the client’s financial planning needs have been assessed and agreed, SIS then supports our investment process seamlessly. Our financial planning process makes sure we understand the amount of financial risk the client needs to take in order to achieve their financial goals. The SIS risk-profiling tool helps us to assess the client’s tolerance to risk, so that we can understand how realistic the client’s financial goals might be.

SIS then supports the assetallocation decisions and our fund selection process. It also makes our review process simple and straightforward.SIS provides a data feed directly into our back-office system, so consolidated valuations are provided immediately and with guaranteed accuracy. If we want to make changes to our clients’ portfolios, the SIS online switching facilities mean we can execute fund sales and switches efficiently.

Like most IFA businesses, we still receive fund-based trail commission but our fee-based proposition means we need to be able to account for every penny we receive, no matter how small the payment is. This would have been impossible in the early days of platforms but the development of e-commission technology and Skandia’s direct link into our back-office software means we can account for and offset every penny we receive in our client accounts.

As we move towards the retail distribution review in 2012, it is refreshing to see that major platform providers like Skandia are preparing to make sure their proposition continues to support our requirements. The unbundled charges and transparent fee structures being introduced in 2010 mean we will remove the conflict of interest implied by commission and can continue to lift our clients’ financial prospects even more professionally and efficiently.

Joel Adams is chief executive officer of Lift-Financial

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