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RDR Transition: Be choosier with platforms and networks

The Beaufort brand stands for a group of companies with an interesting business model: An adviser firm with a parallel network, except it prefers to describe itself as a cooperative between adviser firms.

Beaufort Group is the overarching company and within that lies Beaufort Financial Planning, Beaufort Investment Managers, a discretionary management arm and Beaufort Corporate Consulting.

Sitting outside Beaufort Group is Beaufort Asset Management, the original IFA firm which preceded the group’s formation.

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Putting the work in network

Simon Goldthorpe, executive chairman of the Beaufort Group and managing director of sister advisory firm Beaufort Asset Management, said larger networks have mistakenly been striving for quantity over quality.

“One of the things that has been a weakness in the past is networks have gone for just trying to rack up members and not taking due care who their members are, and that’s why they have had structural problems. Unless we have a guarantee that members are going to offer a robust RDR proposition we would only be as good as our weakest link.

“We are a peer group rather than a network.”

He added that large networks can have difficulty controlling how their appointed representatives behave. With only 10 member firms, Beaufort is much smaller than other networks and can reduce the risk of an AR stepping out of line by allowing only strictly-vetted firms to join and by giving everyone a say in how the network - or “peer group” - is run.

“The AR firms are very close to the decision-making process. In some places ARs feel the networks are just submitting them to a regulatory regime which is not best for the clients.

“It isn’t good enough to say ‘I know what the client wants’. You have to demonstrate it and that creates what some ARs think is an overly-policed regime.

“I think sometimes ARs see it as a hindrance in the strict way they have to do things. When the ARs are much closer to how you formulate how you deliver advice... there isn’t this ‘us and them’ that you get with other AR relationships.”

Beaufort group has 34 registered individuals across 10 member firms, but is looking to expand this in the next six months by taking on an additional four to six firms.

However, Mr Goldthorpe said they have been very picky about which firms to allow in and have turned away several enquiries.

Free to compete

Members of Beaufort Group are not subject to any non-compete clause whatsoever, and can take their clients with them whenever they decide to leave.

“We are very clear the firms themselves own the clients. We believe that they should be part of the network because they want to be. When we created the group we set aside a significant amount of equity into an LLP that AR firms get membership to.

“Collectively they want to make sure we are successful and are highly compliant.”