Opportunities for female finance directors were scarce in the early 1990s so I bought a small regulated investment business. For the first year, I was under the supervision of the previous owner. I still remember him scornfully pointing out, when I advised a client to place his £50,000 into five unit trusts, that for much more work (longer advice letter, multiple applications, periodic valuations) I would earn less commission than he would have done (by popping the lot into a with-profits bond).
He was right about the additional work, if nothing else. So when fund supermarkets appeared, I used them.
But what they offered was so much less than my wish list:
- Full transaction listing including income, tax and charges analysed by source – adviser, fund manager or consolidation service manager.
- Fund changes from inception.
- Rates of initial and trail commission as agreed with each individual client.
- Consolidation service to be independent of providers – bancassurers or fund managers.
- Easy, penalty-free transfers out.
- One account for most types of intangible assets – investment trusts, individual shareholdings, pensions, investment bonds and so on.
When I came across Transact via a low-key promotion on the old Association of Investment Trust Companies website, I could hardly believe what it offered – my wish list and so much more, including capital gains tracking, very full annual reports (tax returns for Transact clients became a doddle) and easy re-registration of client investments on which we had not given advice.
I will not deny that the re-registration into Transact of existing clients’ investments was a bit of a slog but it was more productive than the endless valuation preparation to accompany letters to clients anxiously enquiring about their funds during the 2001-03 bear market.
If the first 50 client re-registrations had been done two years earlier, I could have mitigated these clients’ losses in the bear market because online switching – for individual clients as well as group switching out of a particular fund – is so quick and easy on the Transact platform.
I now have Transact clients with multiple tax-wrappers within Transact, including the usual Isas and Peps, personal pensions and offshore bonds.
There was not much choice in true wrap providers in 2002 so I have felt obliged to investigate the Johnny-come-latelys. While conceding their superiority in some minor respects, they mostly do not reflect my core value as an adviser – independence from the industry heavyweights.
Frances Huggett is a director at The IFA Company