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.
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.”
Giving member firms part ownership in the group ties their own fortunes directly into the success of the partnership, not only encouraging them to do their best but also motivating them to remain in the group with the carrot rather than the stick.
With his benefits hat on, Mr Goldthorpe agrees with the recently-announced ban on consultancy charging, in which fees could be taken out of employees’ products directly.
“It’s good. It’s very clear whilst there was some debate, I think we were always going to see firms try to get around the spirit of what was being done and a clear ban is good for all of us. It’s difficult to really justify adviser charging in auto-enrolment.
“The government are trying to get the maximum bang for their buck for what people get from their pensions. It’s absolutely fine, and the days of high charges should be over.
“Auto-enrolment is a great opportunity for all firms and I’m surprised that some IFA firms are seeing it as a nonsense. Even if they don’t have a proposition they should be aligning themselves to firms that have that proposition.”
Receding platforms
Although Beaufort still uses a wide range of platforms, Mr Goldthorpe says the number of platforms the company uses has definitely gone down.
“We as a group of advisers need to be looking at those platform costs and trying to get the right thing for the clients. When you are very price-focused it is putting pressure on the platforms. They are clearly getting closer and closer aligned.
“Some platforms have better functionality than others and that’s going to be a key issue over the next few months.
“Those that aren’t adapting will struggle unless they have a direct offering. We still touch all the platforms but on review it is obvious that advisers are starting to switch
Networks have gone for trying to rack up members and not taking due care who their members are