Starting out with 20 clients and £2m assets under management, Mr Belcher grew the business over a couple of years to the 110-client, £7m to £8m AUM practice it is today. Originally a general practice, the firm now specialises in personal pensions, corporate pensions and investments, for people with at least £30,000 to invest and aged anywhere between 45 to 70.
However, with the cost of regulation going up and the volumes of required paperwork increasing all the time, Mr Belcher finally decided it was time to look for other options.
“The cottage industry is slowly coming to an end. Pooling the resources of people with expertise across the industry with the same work ethic was a stronger unit. I realised this about two years ago.”
He has now merged with another company - very specifically not a network - called Prosperity, founded in 2010 by former Edward Jones’ employees and currently on the hunt for potential acquisitions.
“Even before the RDR people were retiring, older people didn’t want to take their exams and people were looking to get out of the industry.
“How do you get to have a client business where you are expected to service them but you sit behind a desk pushing paper? The problem was how do you maintain profit.
“If you invested £100,000 with a client initially you would have a contractual agreement and we would be obliged to contact you once a year and do a review on your portfolio. Let’s say you have 100 clients with £50,000 and you were taking 0.5 per cent off of them a year, you would not be able to make any profit.”
It has taken eight months of “getting to know each other” and Mr Belcher has had to make his single member of staff redundant in the process, but the merger has finally completed.
Mr Belcher hopes Prosperity’s resources and technology systems will free up his time.
“They have a process whereby all the adviser needs to do is go out and see the client, do the fact find, do the initial meeting and put it on a computer that’s picked up by admin staff who use the information to come up with research and make the recommendation.
“They produced the report and when we go back to see the client with the report we have a reason to charge them a fee. It’s a joint discussion between me and the researcher. If I agree with it It can progress.”
‘You have to kiss a lot of frogs’
Justin Randall, head of operations at Prosperity IFAs (also based in Hampshire), says Glen is the fourteenth of 15 advisers to join the relatively young company, most of which came onboard in the last 12 months.
“We would like to get to around 50 advisers in the UK. We are in talks to another 10 at the moment. Fairly advanced talks. We are hoping to get an additional £200m by the end of the year.”
So what qualities does an acquisitive firm look for in its one-man-bands and smaller practices?
Aside from the softer qualities such as an ethical and cultural fit with Prosperity, and a focus on advice rather than sales, the firm should be able to work well within an increasingly strict regulatory environment.
“Make sure their proposition is fairly sound. We still come across IFAs that do research from scratch or what isn’t real whole of market research. It’s very difficult to ascertain where all their assets under management are or where their trail is coming from so it’s hard for us to make a judgement to work with.”
Clean, orderly records and a clear complaints history will also help buoy the perceived value of your firm in the eyes of a potential buyer, Mr Randall said.
“With the market as it is, with all the regulation and red tape it’s really hard for someone on their own to do that and see clients. There are some that we do turn away quite quickly.”
“You have to kiss a lot of frogs before you find the right one.”
Catching the training train
I caught Mr Belcher in the middle of an office move, from Swanmore to Fareham. He’s doing a lot of shredding and moving a lot of boxes these days, but when that’s all settled he looks forward to taking on the role of training and competency manager, which involves checking other IFAs and making them more profitable.
“It’s part of our proposition to go around and support other IFAs already onboard.”
Mr Belcher has been able to keep his branding and clients, which makes the transition more comfortable. However, Prosperity is also open to buying out an adviser’s client book if the adviser decides to leave the industry.
However he stands by his claim that the sole practitioner model is outdated and downright risky for clients.
“What do one man bands do for succession planning? Say they get very ill, what happens to those clients?
“I experienced that last year with a colleague who died from cancer. I took over the family business but they didn’t leave it in a good state so I had to walk away.
“It goes to prove that one man bands are very vulnerable. All of a sudden the clients are left wondering what happens to their money.”
