RDR Transition: IFAs must have ‘price integrity’

London-based Bradbury Hamilton has been on the acquisition trail of late, recently acquiring two client banks: that of Hampshire-based Wealth Management and a section of Surrey-based Thomas Hall Partnership. It is also now looking to recruit additional advisers to help service those books.

In one of a number of optimistic growth stories post-Retail Distribution Review, Sheriar Bradbury, managing director of Bradbury Hamilton, says he is still looking to acquire more firms that have anything up to a £1m turnover. He but is keen to stress, however, that in buying only the client banks, the firm is not picking up the liabilities.

“It’s a matter of funding more than anything as I fund all this myself, but the advantage for the people that are selling their business is that I don’t have a big committee and people that I need to go to, to ask for permission.

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“What I am looking for is potential to grow it, to grow the revenue stream and looking to improve the service to the clients.”

The 20-year old firm currently has 10 advisers, of which three are chartered and two “are very close”.

To help deal with the additional clients, a new adviser will be starting at Bradbury Hamilton in September and Mr Bradbury is planning on recruiting an additional one or two more.

“We need more advisers to service the client banks. We are going to continue acquiring client banks and to steadily grow our presence. We want to expand in Manchester and possibly places like the Midlands and, of course, to grow London a bit more.

“The idea is to steadily grow the business, to grow the recurring revenue and long-term to grow the profitability and to steadily increase the number of advisers but just slow and steady. It’s not a question of world domination though.”

Protecting fees

Bradbury Hamilton has adopted a customer agreed remuneration model where clients sign fee agreements prior to the firm doing any work for them. The model long pre-dates RDR, with the basic model having been in place for close to eight years and the requirement for agreements to be pre-signed having been around for five to six years.

Clients have several options to pay for their advice - a fixed price basis, an hourly fee or a percentage base charge “with an underpin”.

“Some clients find it difficult to adjust [to signing client agreements prior to work] and some people don’t want to sign fee agreements, however there are very, very few, who don’t deal with us because of the fee agreement.”

Mr Bradbury is critical of firms who do not operate with a pre-signing requirement, highlighting that some firms will produce a report for clients prior to signing off on fees, leaving the client to take the report without proceeding with the recommendations. This is a particular concern given the growth in ‘DIY' investor platforms that is now expected.

“Now they have got the report all they have to do is implementation and I think as an adviser, and from a business perspective, it’s a bad idea to go ahead and produce work without fee agreements in place.”