As head of strategic distribution at Sarasin & Partners, Andrew Thompson’s job primarily involves ensuring that intermediaries are served with the right products. According to his CV, he focuses on creating and delivering investment solutions for Sarasin’s strategic client base, which, in his words, means “trying to be the vanguard of change in terms of product”.
But while this may appear to be a relatively simple task, constant regulatory changes have ensured that his 27 years in the profession, including seven years at Sarasin, have been full of challenges and alterations. Of all the shifts in legislation, he says the RDR has proved the biggest threat to his duty of foreseeing future trends. That said, more than a year after the RDR’s implementation, he appears confident with the task ahead.
Mr Thompson has his own strategies for communicating with advisers. He was keen to emphasise that he is not a big fan of mass market roadshows – the “travelling circus”, as he puts it. The ‘pay to play’ concept is not something that Sarasin was keen to emulate, although that does not mean Mr Thompson and his colleagues do not meet with advisers and invite them to more low-key workshops.
Instead, he claimed that his focus is on working closely with a small number of advisers with whom he shares “great synergy”, and discussing the ins and outs of the profession with “eminent figures”. These interactions have led him to one or two conclusions about how things are likely to pan out, and he insisted that Sarasin is at the forefront of providing the solutions of tomorrow.
Outsourcing propositions are notably growing in prominence as a result of the new rules, he said. While he believed this was a good thing, he was concerned that the selection process was not sufficiently thorough. Advisers, he added, should look for discretionary fund managers that fit their corporate and client model – or risk upsetting the regulator and the Financial Ombudsman Service.
He said: “For many years, advisers have been second-guessing fund managers and trying to be part-time fund managers, but they have now realised that it can’t be done, because fund management is a full-time job. So, many will now outsource to discretionary fund managers.
“The question is, do they have the proper processes in place? Are advisers being selective enough when selecting a discretionary fund manager? DFM outsourcing is good, but be careful how you go about it. Do it with a well-thought-out process and long-term strategy in mind. Make sure you understand the risk and the process of DFM.”
Another observation made by Mr Thompson – also in line with pre-RDR expectations – was that restricted advice models are now the reality for most intermediaries.
While some have warned of the difficulties behind retaining clients with the new label after years of telling consumers that independent is best, Mr Thompson sees no difference between IFAs and restricted whole-of-market – and he believes clients will understand this.
According to his understanding, the majority of pre-RDR IFAs did not fit the regulator’s new independent definition, and the term ‘restricted’ is definitely not the best way to describe this inevitable but equally respectable advice process. Regardless of the speculation, he claimed that a client would be happy if an intermediary explained that the best investment solution is found by carefully researching several providers in accordance with the FCA’s criteria.