‘Impossible’ to budget for regulatory fees: IFA

Malcolm Coury, managing director of Money Wise IFA, is pretty nonchalant about the firm’s transition to comply with the new regulatory environment, saying the firm has been fee-based for years and all advisers were at least level four qualified.

The firm has not taken provider determined commission on investments for many years, as it was already working on a customer agreed remuneration basis.

“Adviser charging is effectively the same thing under a new name so it has been business as usual.”

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The move to qualifications was also smooth as all 15 advisers were level four qualified.

“We also have a number of chartered and certified advisers and even some ‘fellows’ of the Personal Finance Society. Our aim is to encourage all our advisers to achieve chartered and or certified status before 31 December 2014 because we believe the minimum qualification required to remain independent will rise to level 6 within the next couple of years.”

However, the RDR did force the firm to embark on marketing its brand as it had to revisit documentation and literature to ensure it complied with the revised regulator wording.

“We decided to refresh our brand, including changing our logo and website and we produced a new brochure about the company and our service, including taking the decision to publish our pricing in the brochure to be as transparent as possible.

“We’re now currently working on a new brochure aimed at professional advisers working in the personal injury and clinical negligence market, i.e. solicitors including those acting as deputies appointed by the Court of Protection.”

Money Wise did not lose any advisers in the run-up to the RDR and has recruited two this year.

“We have no plans to be huge; we constantly strive to be the best we possibly can. It’s a journey. Our next horizon is to grow to 20 advisers ideally spread evenly across our 4 offices within the next 18 to 24 months.”

It’s a risky business

Mr Coury believes Money Wise’s per capita productivity is “above the sector average”, as despite the relatively low number of advisers, the firm’s annual income is around £3m.

He added that the firm runs a “tight T&C scheme” to constantly monitor the quality of the advice and record keeping, “which one has to do these days”.

The firm uses Bond Dickenson as its compliance advisers, file checkers and compliance auditors.

“They are probably more stringent than the FCA would be and there is very little tolerance. If something appears to be missing, it is like a fail. We have a paperless office so when things are missing, it might just be that someone has not attached something.

“By having a very, very strict file checking regime and an annual audit by Bond Dickenson, we are getting a very high level compliance service.

“They check around 10 to 15 per cent of the files and if we get any reds, i.e. any fails, then every single file is checked and the adviser has to have pre-approval. It’s very rare to get a red. But this is risky business.”