Avoiding RDR red herrings: Peter Craddock, Perspective
Group operations director discusses why his firm might give up its independent status and how it might succeed in the corporate arena.
Acquisition and qualifications seem to be the two goalposts for adviser firm Perspective, at least according to the company’s group operations director Peter Craddock.
Currently, Perspective has 24 offices and 80 advisers, a turnover of about £23m and £2.5bn assets under advice. According to Mr Craddock, the company brings in between £9,000 an £10,000 in new fee-based work per adviser, per month although the majority of revenue is from repeat business
“We are four years old and we have acquired aggressively in that period so we have really had the opportunity to acquire quality. We looked at around 380 businesses and acquired 30.”
If you want to join this club, Perspective is on the look out for firms that offer full, face-to-face advice principally to private clients. According to Mr Craddock, it is a “buyers market”.
While some advice firms are scrambling to prepare for the Retail Distribution Review and other advisers are throwing their hands up and simply leaving the market, Mr Craddock coolly asserts that RDR is “sort of history” as far as his firm is concerned.
He explains that 77 out of Perspectives 80 advisers are already fully qualified. While he believes these few will catch up in due course, Mr Craddock says any adviser not properly qualified might have to take a non-advice or non-client-facing role in the company until they attain the necessary qualification.
He adds that Perspective’s emphasis on qualification includes a push for chartered office status. Indeed, while he admits that the firm may give up its independent status if it feels it cannot meet the new guidelines, he stresses that this in part reflects the firm’s view that this is no longer the key benchmark for quality advice.
“The emphasis is getting to chartered office status so that the office itself becomes a chartered firm.
“The ambition for perspective is that all of its offices in time will become chartered and a third of them are there already.”
The independence question
Elaborating on the firms laissez-faire approach to its IFA moniker, Mr Craddock believes the whole independent vs restricted debate, which has become central to discussion of RDR, is a bit of a “red herring”.
“There is such a mismatch in the definition of independent. The client views independent as the adviser not being in the pocket of providers; the regulator’s definition is that you have to be an expert in every retail investment product up and down the land.
“It isn’t the fault of the adviser firm that the regulator has moved the goal posts in this way.”
Instead, the real emphasis should be on qualification, transparency and level of service, Mr Craddock asserts.
“The real question is are your people qualified, have you got a proposition in place with a client agreement that is demonstrably transparent to the client and articulates very clearly what the client is paying for. Then in the service agreement you demonstrate you are delivering the service for which you are charging.