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More sales of adviser arms to come: AFM

The chief executive of the Association of Financial Mutuals said building societies needed to find different ways to offer tailored advisory models to customers, regardless of their net-worth.

Mr Shaw added: “A consequence of the retail distribution review will be a reduction of mass market advisers and a shift by the big high street banks and building societies from providing advice to most customers, so this type of partnership between a building society and advisory firm could be a fallback option.

“We would like to see some of the larger organisations find a way of offering advice but they need assistance from the regulator in devising clear rules on simplified advice.

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“In many ways what we are seeing now with the exit of many large players is that we have come full circle from 25 years ago when the majority of providers had their own advisory staff.”

Mr Shaw said partnerships between mutuals and advisory firms would remain a key option for retaining advisory propositions.

He said: “Despite the exits from the market, I see a growing appetite for advice tailored to an individual’s needs but we need to clear some significant regulatory hurdles for providers who want to supply advice in the post-RDR environment.”

His comments came after new advisory firm Bellpenny bought Monmouthshire Independent Financial Advisers, the advisory arm of Monmouthshire Building Society.

The deal, for an undisclosed sum, brought more than £400m in assets under management into the Bellpenny stable.

As part of the purchase, customers will continue to receive a full advisory service at all branch offices with a Bellpenny adviser.

Andrew Lewis, managing director of the building society, said the increasingly regulated environment meant the ongoing needs of its customers would be best served under the influence of a regulated advisory firm such as Bellpenny.

Adviser view

Kevin Ronaldson, chief executive of Bellpenny, said: “We are now looking to explore further partnership opportunities with other building societies around the UK.”

KEY STAT: £400m – assets under management involved in the sale of Monmouthshire Independent Financial Advisers to Bellpenny.