However, despite the desire to grow the company, Tim Cosway, partner of Holden and Partners, has had trouble finding suitable candidates to join the advisory team. As a result, the existing partners have formulated a plan to ‘grow their own’ advisers from fledgling paraplanners.
Grow your own
Holden and Partners currently has three paraplanners that it has taken on this year and are looking to effectively grow their own advisers.
“We’ve struggled with recruitment over the last 10 years. We’ve interviewed an awful lot of people and for one reason or another... we have really struggled to recruit people at a top level so we’ve said let’s go the other way and grow our own.
“We’ve got three paraplanners with a view for them to learn us as a business and come through as advisers in the next two or three years.”
Platform consolidation
While common opinion holds that advisers will tend to use more platforms in the post-Retail Distribution Review world, Holden and Partners seems to have taken a step in the opposite direction by moving the bulk of their assets away from Cofunds and Raymond James onto a Pershing platform.
Mr Cosway argues this has resulted in better outcomes for clients and company alike.
“Historically we used Raymond James to manage our money, and we also used to have money on Cofunds. What happened is almost 12 months ago we made a decision to adopt Pershing as our custodian, and that was also the custodian used by Raymond James so it gave us the ability to bring our Raymond James money and our Cofunds’ money together.
“This has made our business much more effective because we have consolidated two platforms into one.”
Independent doesn’t mean you have to use lots of different platforms. It’s the ability to offer proper whole of market adviceBecause Pershing was essentially the power behind the Raymond James platform already, Mr Cosway says the firm was able to negotiate better rates by going to Pershing directly.
“Pershing is [Raymond James’] custodian, so we effectively approached Pershing directly so there was no change there, and we had better terms than Cofunds so our clients are faced with a cheaper proposition and more choice.
“It’s a little bit of a no-brainer for those clients.”
But just because the company is moving the bulk of its assets does not mean it will lose its independent status. Where clients would be better off, Mr Cosway has no problem using other platforms.
“We haven’t done it hook, line and sinker because there are some people who are still right for Cofunds, but very much our portfolio management system is going to be focused around Pershing.
“We don’t just offer Pershing but it is our main platform. We still have a chunk of money on Cofunds and we use Fidelity, and Skandia, there’s all sorts of more historical stuff.
“Independent doesn’t mean you have to use lots of different platforms. It’s the ability to offer proper whole of market advice. We are independent and we offer whole of market advice.”
Coming clean
Advisers are taking different approaches to the looming clean share class conversion. Some are converting clients on a peacemeal basis as and when clients come forward, while other advisers are sitting back and waiting for platforms to take care of everything by 2016.
Mr Cosway and his colleagues are taking a more active approach, working to convert clients by the end of the first quarter of 2014.
“It’s a little bit difficult this, but part of our assets have been on ‘dirty’ share classes. Through the Pershing platform we have got a planned conversion programme. We are writing to our clients over the next three weeks so we need a response from them. We are still advisory, and being advisory we have taken some compliance advice and they said we have got to write to our clients and tell them what we are doing.
“Paraplanners are producing the letters as we speak. [The letters] will go to our clients, they will agree, and then we have got a programme for next year to approach each individual investment house and convert them.
“The conversions have begun because anything we have moved across and done individually we have converted.”
Although he has found clean share classes to be cheaper in the vast majority of cases, he says he is keeping an eye out for those which might be more expensive and will not convert where that is the case.
“We’re not going to convert ones where they are more expenses. We are going to convert where it’s better to do so.
“The reality is it’s going to be all clean share classes before long anyway so this makes sense. I’ve not come across many where it’s not cheaper to convert to the new share class.
“We had to get client agreement. They need to say ‘yes, please will you give me the cheaper share class’. I mean it’s a bit daft.”
