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Threesixty urges rivals to come clean on provider payments

Support services provider Threesixty has urged adviser networks and rival support services firms to come clean over the marketing payments they receive from providers as the FCA prepares to impose a “cost only” rule.

In March, Money Marketing revealed the regulator was planning to ban adviser firms from making a profit from provider payments for services such as training, conferences and seminars due to concerns the deals could be used to secure distribution.

The FCA is also investigating ways of ensuring support services firms are brought under the new rules.

The regulator is understood to be preparing enforcement action against at least one adviser firm over inducements.

Threesixty managing director Phil Young says his firm expects to receive £400,000 in payments for training and events from 17 different providers. He says Threesixty makes no profit from the arrangements.

Young says: “We make no profit from the events, all we do is calculate the total cost of promoting, organising and running the event on the day and split this cost between presenters. 

“We provide a breakdown of activities to show where the spend goes. If others are comfortable with the payments they receive, I can’t see any reason why they wouldn’t disclose information at a similar high level.”

Sense commercial director Steven Young says the firm would only consider disclosing the figure if large networks agreed to do so too.

He says: “I am not saying that we wouldn’t publish these figures but I would want to see others going public as well.

“If firms like Sesame Bankhall and SimplyBiz were prepared to do it then clearly we would want to be a part of that, but we would want to make sure payments were disclosed in a form which was comparable.”

Sesame, Lighthouse and SimplyBiz were all unavailable for comment.

An FCA spokesman declined to comment.


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There are 15 comments at the moment, we would love to hear your opinion too.

  1. We don’t make anything off it. Sob sob.

    Give me a break. Stop with the bull mate and get real.

    Who cares what you get paid.

    Only idiots with no brains use you.

  2. I think this a very important point, well made.

    You should know how dependent these companies are before getting into bed with them, especially networks like Sense who have no economies of scale.

    Providers pull the funding your business is at risk.

    The FCA insist we run due diligence on these firms, the numbers should be available so advisers can make good decisions.

  3. Will the FCA will want advisers to pay providers to attend their training events?

  4. Well done Phil. Transparent, non-profit provider-sponsored events that result in advancement for the provision of financial advice in general should be encouraged. The filling of the shallow pockets of organisations who have for years demanded providers’ money with menaces in return for a vague promise of business disguised otherwise, should not.

  5. This is an old story.

    A good number of providers have been seeking assurances from firms (and in particular their Compliance Officer) that payments for events cover costs and that there is no element of profit. This started at least a couple of years ago.

    Just because you’re paranoid doesn’t mean they’re not out to get you…

  6. Richard O'Callaghan 12th September 2013 at 10:05 am

    This has been going on for years as providers try to ‘encourage’ support in certain business areas by the sponsorship of conferences etc for many of the large IFA’s. Makes a nonsense of independent advice when many advisers have an internal shortlist of such ‘preferred providers’ – many of whom would not stack up in a full provider selection process…. the existence of which they would strongly deny. However it is much more transparent than commission …isn’t it??

  7. @Richard Bishop – There are two points in your post and I will address both:

    Sense makes no profit from training events and the total amount that we received from providers to help defray part (not all) of the cost was less than £15,000.

    I would challenge your spurious comment on economies of scale. The large networks, almost without fail, are making significant losses due their inflated cost bases. Sense can deliver great service to our members because we have a personal relationship with our members. We manage the cost base tightly and focus on ensuring that we remain profitable and financially secure.

    In our year ended 31/5/13, our turnover rose by 49% to £13.6m and profits increased by c37% to £423,000.

    I do agree that advisers should always carry out careful due diligence on networks – we provided a checklist for firms last year -


  8. @SteveYoung

    Heard it all before from networks, I don’t want a tight focus on costs, I want you to spend a ton of money on compliance people.

    I’m now paying for Honistor and others thanks to their focus on running a tight focus on costs.

    You can confirm Sense only gets £15,000 from providers in total?

  9. Good to see Steve Young out of the starting gate so quickly. It must be a relief to no longer have to defend the large network model.

    @Graham Bentley

    I have never had the brass neck to ask a provider to pay towards staff training costs. It would be interesting to see whether large platforms may be prepared to pay advisers not for new business but to leave the existing book undisturbed!

  10. @Richard Bishop – Don’t judge everyone by the standards of Honister. We never scrimp on compliance resources: the real waste of money in large networks comes from bespoke technology and overpaid senior managers.

    We have always been clear that we don’t rely upon providers to fund our network. I am on record as stating that the total amount of money received by us is less than 1% of our turnover and that we would still be very profitable without it.

    I suggest that you focus your ire on those who refuse to disclose anything. They have much to hide.

  11. Come on Simply Biz, Sesame, Tenet and Paradigm. When are we are going to hear from you?

  12. All very well declaring receipts from providers for training but can you confirm these are the only payments you receive. For example, do you receive any form of over-ride from providers on the restricted protection panel?

  13. Best Practice Group – £nil.

  14. @ Martin Field – I can confirm we don’t get anything from panels, no commission splits, no overides, bps split or anything like that

  15. It is impressive to see Networks openly supporting the proposal of the FCA and the intention to bring the same rules into Support Services Firms will prevent the larger distributors from shifting their accounting from their regulated business to the non-regulated one – well done FCA.

    If the regulator is preparing enforcement action over inducements then you can be sure that firms that are making no profit from their arrangements can rest easy.

    The firms that make significant profits per year for spurious services justifying it on the basis of “scale” are the ones who should be worried and are no doubt revising their business projections for 2014 and beyond as we speak.

    Let’s see whether any enforcement and fine takes into consideration past profits from these services and is not just a slap on the wrist from the FCA for not playing nicely and a ban from ever doing it again!

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