He is a huge fan of the retail distribution review. Commending the positive steps the FCA has taken to clean up the industry, he said: “I think the RDR has been wonderful for our business. It’s about understanding that if you can’t develop the relationship with the client, you’ve got nothing to offer.
“Before, you had a relationship with the provider. You got product support, admin, funds, and they paid you as well. It’s no surprise that the advisers were focused in terms of what they got from the product provider, and the client was almost peripheral.”
He said: “People did not understand the benefits of building up long-term relationships. It’s interesting to see how the industry has moved into that space created by the regulator.”
Mr Sargisson – a former managing director of James Hay Partnership, who has been in his current role since the summer – is on a mission to attract more financial advisers to his business. He currently has 130 ‘partners’, and part of the lure is that the first 200 will have an equity stake in the company.
The plan is to build the business so that it can list on Aim in three to five years’ time, and, in regulatory terms, build itself into a succesful national adviser business, extolling the virtues of a restricted advice business model.
But it will be an uphill struggle. Launched in 2012, the company is currently loss-making, and it recently needed a loan from SimplyBiz, which helped push the parent company itself into a loss for the financial year of 2014.
Mr Sargisson said: “It is seed capital to keep the business up and running. SimplyBiz has committed to underpinning and supporting Sandringham while it grows its partner business to a sufficient number and sufficient revenue that we are able to break even. It is my job to get the business into shape as a listing on Aim.”
Part of that plan is to recruit more advisers, and create a regular income stream for the company. Mr Sargisson said that the company’s business model was simple: “We are looking for financial advisers who can deliver a level of turnover, and we take a margin on that turnover, and then we deliver services on that margin.” Those services include PI costs, training and development, and a strategy to “understand their business”.
While stating that the company was a national rather than a network, Mr Sargisson admitted: “We look like a network, and in some respects we are.”
But the most important element, he said, was compliance. He said: “We have put compliance at the heart of our business. We have built our proposition around an understanding of compliance and risk. My experience in previous roles is that the industry does not understand risk, and that is why we have a lot of problems in our industry.
“If something blows up it covers the industry in lots of messy stuff. People will blame the regulator, but they don’t look at their own internal processes to see if they’ve got exposure to these.”
Part of Mr Sargisson’s strategy is the company’s plan to be rigorous in its selection of partners to join the company. It expects to keep three in every eight people who apply.
Mr Sargisson said: “I will not have anything happening in the business that causes any reputational damage. I would rather turn people away than let something bad in.
“One of the failings of the networks was not managing the process rigorously enough. They have allowed stuff in without really knowing what is going on, and they have allowed that in, in volume.”
Adamant that the business should be based on a restricted business model, he said: “The challenge is getting IFAs to get off their hobby horse about being independent. I spent 11 years working with an IFA, and I never sat with a client and said the person you are dealing with is an independent adviser.”
He is also critical of advisers who have missed an opportunity with auto-enrolment, saying: “I have been disappointed in how the industry has reacted to auto-enrolment and the numbers of people who do not want to get involved in AE.
“A number of advisers say it is small beer and they only deal with high net-worth. Auto-enrolment is a payroll issue; it is executing the relevant information, and it runs itself.”
Sandringham has recently launched an AE consultancy service to offer accessible advice to SMEs who need to get their systems up and running, as part of the general longer-term plan to get the business more self-sufficient.
Mr Sargisson said: “It is a challenge, and I have always liked a challenge. A lot of my financial services career is dealing with challenges.
“I joined the business because of its connection with SimplyBiz and its chairman Ken Davy. I have always admired him from afar. He has had a clear vision about how SimplyBiz can support advisers, and that vision has paid off.”
Let us hope Mr Sargisson’s does as well.
Melanie Tringham is features editor of Financial Adviser
Chief executive, Sandringham Financial Partners
Managing director, IFG Financial Services (concurrent with other jobs, below)
Managing director, James Hay Partnership
Managing director, The IPS Partnership
Sales and marketing director, Smith & Williamson Group
Director, Lucas Fettes & Partners
Sales consultant, National Provident Institution