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Perspective turned down 419 prospective firms pre-RDR

Peter Craddock said the company had been “very discerning” about which advisory firms it allowed under the Perspective banner since launching in April 2008.

Likening the firm to an exclusive club, Mr Craddock said: “We look at various existing aspects of a firm, such as financial metrics and its compliance record. [We also look] into its future to see what drives income and whether the firm is protected with individual client agreements. We have had conversations with 450 organisations, but we have only accepted 31, as these have met our strict criteria.”

Mr Craddock said the company is not primarily interested in acquiring firms with lucrative trail commissions and added that a future dissolution of legacy payments would not harm the business.

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He said: “What the FCA is proposing in terms of trail commission doesn’t mean that our firms have to change their practices. Good firms have been transitioning their income models for some time. The client agreement we use relies on a default charging structure across the board.

“We see RDR as a massive opportunity to decouple the relationship between provider and adviser, so the adviser is paid by the client in an upfront way and agrees what they’re worth on an ongoing basis.”

Mr Craddock was responding to comments made by Neil Stevens, joint managing director of advisory support services provider SimplyBiz, who said national consolidators could no longer “sit back and let the buckets fill” by acquiring firms heavily loaded with trail commission.

Peter Matthews, director of Cornwall-based Jacksons Wealth Management, said: “I don’t subscribe to the theory that smaller advice firms will decline post-RDR, as personal service is highly valued, particularly here in Cornwall. You have to protect your brand and local is good. Clients would be annoyed if we joined a national IFA, because so much more is dictated from on-high.”

Background
Earlier this month, Perspective announced plans to issue an initial public offering on the London Stock Exchange’s Alternative Investment Market. Chief executive Damian Keeling said he hoped the IPO would raise gross proceeds of £28m.