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FINANCIAL ADVISER: As a technology-based IFA the firm's technology department has developed hardware and software for its business model. How has 2Plan gone about this and why do you believe a national model is the way forward?

CHRIS SMALLWOOD: First, we believe the national model is right for the UK. Different processes, different technologies and different systems can cause confusion in the whole process. A regulated model does not offer the same support that we do. We as a national, we are a branded company, where we offer one advice process and ask all our advisers to follow our process as a method of working.

FA: Since its launch in April, 2Plan has had 25 IFAs join with an aim to hit a target of 100 by the end of its first full year in business. It seems that targets are still to be met - why is this and will there be an aggressive drive to recruit?

CS: We have had 25 advisers come through our induction course and 21 have been appointed. The quality of adviser we have chosen is excellent, and I am very pleased with the first four to five months of organisation. From experience, I am looking for a certain type of individual which is harder to come by. But it is not just about numbers. If we are going to invest hundreds of thousands of pounds in developing technology, then there is not great use for just recruiting 50 advisers into the firm. You need to run that technology over a larger number of advisers, to gain real efficiencies and profitability we can gain from technologies. Our strategy is to recruit by recruitment directors, to have 10 in the UK. We have a five-year business plan, where we want to recruit 1000 advisers, it does not matter if that ends up as 900 or 1100, it is our aim to grow a large distribution force in the UK over the next five years and our target by 30 June 2008, is to get 100 IFAs.

FA: With this drive to recruit, why may IFAs be sceptical to join a firm such as yours?

CS: In more recent years - taking into consideration advisers and networks - I have seen a movement from advisers leaving networks to join the directly regulated sector. I suspect this will change with the introduction of the retail distribution review over the coming years, and I believe there will be more pressure put on the regulated sector. The FSA is saying they are not going to recruit higher numbers of supervisors to supervise the regulated sector. But if these advisers are operating under the radar, who is checking their business? I believe the FSA has not got the resources to be able to get around everyone. If that starts to bite, advisers will look for a new home, which offers them real value and a differentiated office, like us.

FA: 2Plan has an ethic of focusing on specialising, rather than taking exams, does this have an element of the RDR model?

CS: The RDR is good for us, and if some of those proposals are implemented, then I think you will see advisers in the UK look for a more national offer, compared to a kind of regulated offer. In highlighting professionalism, I am not saying people should not take exams. If they are a general practitioner, then their current status is sufficient.

But a lot of IFAs would like to find more high net-worth clients, where they need more knowledge. If that is something they want to do, they should pursue the necessary qualifications to get there. It is a Catch-22 for advisers sometimes; they often come across these complex areas.

I think it is hard to argue that we do not want the industry to be seen as more professional and I think that the consumer recognises qualifications as a route to being seen as more professional.

We do not see any reason for a primary sector. If you were a small adviser firm and clients had high net-worth complex needs, you should have chartered status. But if you had advisers who had a mixture of needs, and do not deal with complex needs everyday, then we tackle this by having a central specialist technical team to deal with those complex needs.

We find a balance in being better qualified, and I think that if an adviser deals in complex areas, then we should start to take those qualifications to increase professionalism and knowledge. It is not about crashing through exams, it is a case of how often the adviser deals with those areas on a regular basis.

Without being critical of RDR, on the point of independence, it seems that what it proposes to change it from what we know it today. I firmly believe that independence is recognised as whole of market meaning or offering. I believe in the general financial advisers and people aspiring to be professional financial planners. But I do not see the need for a primary advice sector and I do not see why the advice seems to be a mishmash here, between suitable advice, or on the other hand, not suitable advice.

FA: Standard Life has a 15 per cent stake in the overall company. Are they just financial backers and what is its role within the company?

CS: They are a minority investor, they have non-executive director on the board, where we meet once a month to look at the financial and management accounts of the company and progress the company is making.

They were interested in getting involved and it seemed to be a good fit. We had a lot of the expertise and knowledge to set the organisation up, so we changed the market with a proper offering, rather than something that came from the depths of our back bedroom. We then spent eight to nine months putting infrastructure in place building technology systems, recruiting, before going to anyone about putting a stake in and joining the organisation. Standard Life brings experience and knowledge to the board. But really they leave us alone, with such a minority stake. This may or may not change in the future. There is nothing in place or guarantees about for anything to happen that will change that.

FA: As a former national sales director of Positive Solutions, why did you choose to step away and start your own company? How challenging has been the transition and were there any difficulties along the way?

CS: From a transition point of view, that was not an issue in the sense that when I joined Positive Solutions there were probably only 40 advisers at the time, and I was hugely instrumental in the growth and success of that company. However, there were some differences highlighted in the end, in what to offer the advisers in the UK, which was somewhat different to the rest of the board.

Now, the main differentiator for ourselves is that we assist in two main areas of the general research process of the advisers. As an organisation, 2Plan greatly assists in research process, making recommendations of clients. With cases of a more complex nature, or indeed a largely investment, we then offer the central technical specialist role. The IFAs refer the case to head office and put solutions together for the client. Our target market is the investment and pension advisers, we believe we can have a great offer for directly regulated advisers, and people feel they would like assistance in the research process in more complex areas.

FA: Looking towards the future, what are the plans for progression and development for 2Plan?

CS: We mapped our technology offering in three different phases - a launch phase, a phase two and three. We have already launched, so now phase two is the contract enquiry systems and building research processes. Next is phase three, which will take those systems to the next level, enhancing technology that we use, recruiting the designed number of 10 recruitment directors and increasing the number of IFAs to 100.

Maike Currie is deputy features editor of Financial Adviser

C.V.

1995-1999:Group sales manager of Allied Dunbar

1999-2006:National sales director of Positive Solutions

2006-present:Chief executive of 2Plan Group