Outsourcing back office functions and investment management is the best way to grow in an increasingly competitive market, according to national advice firm Sandringham Financial Partners.
Speaking to FTAdviser, the firm’s managing director Steve Braidford, said that rather than spend millions on in-house systems, it has remained “fleet of foot” by bringing in ready made solutions, listing Distribution Technology, Mortgage Brain, Assureweb, Tomas and Select A Pension as initial partners.
In addition to sourcing systems and other back office software, Mr Braidford said the firm also works on a model which outsources fund selection and investment management, which he said in an increasingly “commoditised” market is simply “not worth the effort.”
He explained: “As products become more commoditised, IFAs are finding that searching the market and having to explain your decisions every time is just not worth the effort.
“Outsourcing investments is the way forward, advisers shouldn’t be fund pickers and they’ll be saving clients money for not having to waste time on administration and research.”
While anecdotal evidence and the example of several major networks has pointed to a movement among larger firms to restricted advice and outsourcing of investments, data compiled by FTAdviser based on thousands of advisers’ registration data tells a different story.
Research compiled by FTAdviser between January and April 2014 found that just 16 per cent of 10,558 advisers said they did ‘outsource’ investments, while a further 17 per cent said they did so for ‘some’ clients. This leaves more than two-thirds that claim not to outsource at all.
The same data found 76 per cent of advisers still identify themselves as independent, down only slightly from 79 per cent in 2013.
Sandringham started up in January last year - Mr Braidford claims to be the first restricted network ready for the Retail Distribution Review - backed by Ken Davy and SimplyBiz. Today (8 October) it announced it has brought in its 100th adviser partner.
Advisers that go restricted with Sandringham get equity in the business, and former SimplyBiz founding director Mr Braidford says that currently a third of partners are mortgage and protection advisers, while the rest deal with investments.
“It’s a broad church, but I’d say 90 per cent are from an IFA background, initially there was confusion about what being restricted meant, but we’ve now got quite a backlog of advisers wanting to de-risk and put their time and efforts to better use.
The firm’s 99th partner Richard Lindley commented: “I needed a firm whose offering was technology-driven but which had client needs at the heart of the advice.
“With Sandringham, I can concentrate on discussing my clients’ needs and ensuring that their options are not only competitively priced, but are tailored to mirror individual risk profiles.”
