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They giveth and they taketh away

It was a bad week for Kilminster Financial Management as the IFA firm was stung with a £42,000 fine from the FSA for not treating customers fairly by failing to pay claims promptly.

But the firm, with 30 advisers, has defended its stance attributing partial blame to third parties not providing information quickly enough.

Chairman Malcolm Kilminster says since the FSA probe, which highlighted certain areas as needing improvement, he has doubled the amount of money in T&C and compliance that his firm spent in the previous year and reckons his systems are now far more robust.

But it was a great week on two counts for SimplyBiz.

Firstly, it is the compliance support company that has been employed by Kilminster to conduct its compliance review and help get its ship in shape.

Secondly, last week saw the Huddersfield-based firm launch a share scheme for member firms in order to divvy up 70 per cent of the share capital it will raise through the launch of two new companies.

Capital Reward and Capital Reward Plus have been launched with a two-pronged objective, hoping to benefit the IFAs using support services offered by SimplyBiz and its sister firm, Compliance First.

Profits generated through business written with supporting providers will now, rather than being retained solely by the product providers and SimplyBiz, be shared out to the advisers responsible for giving the advice in the first place.

It seems to be becoming more widely recognised that in being the ones who own and nurture the client relationship, intermediaries – IFA or otherwise – are the ones in the driving seat.

Perhaps this is why we are seeing a flurry of shared ownership schemes launching over the last couple of years, of various sorts.

On the one hand, there is the hope and expectation that these schemes – Nucleus, Ascentric, Transact, Paradigm, Positive Solutions … we could go on – are all serving to reward the IFAs for their hard work in giving the advice.

On the other hand we could be a bit more blunt and realise that the risk of losing the client, and therefore their assets and subsequent growth of those assets, lies squarely in the hands of the adviser. Therefore a win-win situation is far more likely to occur if they are looked after.


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