Attivo Financial Planning, which is completely RDR-ready, is part of Attivo Group. The chartered IFA firm comprises of three paraplanners and four IFAs, but Attivo Group also has a discretionary fund management unit as well as a self-invested personal pension and small self-administered scheme business.
According to Stephen Harper, managing director of Attivo Financial Planning, the other businesses within the group allow the firm to offer clients an effective restricted proposition to compliment its independent advice service, which will enable it to thrive in the new world.
“They are separate companies but they are within the group, so we felt that actually it makes it a lot easier for us to present that under a restricted heading.”
Best of both
Mr Harper believes that most other advisory firms have chosen to offer either an independent or restricted proposition, but given the blurring of the lines between the two definitions under the new rules his firm decided it was important to offer both.
“Our client agreements give clients the option due to the type of client we deal with; for wealthier people, you need to be independent.
“A lot of referrals come from accountants and solicitors and a lot of our business comes through enquiries from the internet because we are, for example, the only chartered IFA in Cheltenham. If you are not independent they are not going to make that inquiry because the consumer does not understand the difference between the two.”
When Attivo first meets clients, the adviser will explain how both propositions work and “they could end up going either way”.
“The irony is they will pretty much get the same advice as we are fee-based on both and there really isn’t that much of a difference between the two.”
Mr Harper tells one story of a new client that recently came to visit him whose previous adviser had gone to St James’s Place two years ago and who did not realise the firm was not independent.
“He didn’t realise that actually his so-called IFA is no longer an IFA. He didn’t understand and that is not because anybody had tried to mislead anybody, it’s just that it hadn’t been made completely clear that actually he wasn’t getting independent advice.
“So we are both and the reason we are both is of course we want to be independent... but with our own Sipp and Ssas products and our own DFM, you could argue that we are a vertically integrated business and it works for us to be restricted in certain cases.”
It is not a regulatory requirement but we insisted that a paraplanner should be at least as qualified as an IFA for the last decade.The transition
Attivo has been fee-based for almost 12 years so, by Mr Harper’s own admission, the choice on remuneration models was easy for them.
“So for all our investments and pensions, we are completely transparent with fee charging and initial fees and agreed fee with the client. For us on the fee side of things there was no change.”
Attivo is a chartered adviser firm but not all the advisers are chartered. For a firm to call itself chartered, 50 per cent of the board have to be chartered, Mr Harper explains.
“Regarding qualifications, all of us apart from two had to do something in the last 12 months. But also it’s about keeping yourself relevant and keeping yourself up to date.
“If anybody thinks in any walk of life, but certainly in financial services where you have a responsibility for other people’s money, that you can actually start a career or a profession and never have to review your knowledge or develop your skills then you are completely deluded.”
Attivo has a culture where everyone has to develop their learning and all the paraplanners have to be at least diploma qualified.
“It is not a regulatory requirement but we insisted that a paraplanner should be at least as qualified as an IFA for the last decade. The minimum standard for a paraplanner is diploma qualified because if a paraplanner is doing true paraplanning they need to be at least as competent as an IFA or else they are just an administrator.
“Why should we call them a paraplanner and pay them a paraplanner salary if they are not? I think as an industry we have to have standards,.
“To progress they have to pass exams or else you cannot progress and there is a pay scale that is directly linked to it. And we have a culture where once they pass relevant exams, we refund them and support them with time off.
“You have got to embrace it, you have got to develop it and we have to drive the skills up at all levels not just advisers.”
Informing clients
Prior to the RDR, Attivo wrote to all of its clients - almost 3,000 - informing them of the incoming regulation and the changes that would bring.
“The letter listed the changes that the RDR will bring. The letter included our new client agreement with both offerings and the cost schedule so every client has had that in black and white and they are given the opportunity to talk to us and meet with us.
“With regards to fees, nothing has really changed as we have been transparent for the almost 12 years. However, for most of the industry, these are big changes.
“We didn’t get any negative responses [from clients], although there was a lot of talk that people would challenge the fees that they are paying to advisers as now it is transparent.”
