Rathbones reveals plans for advice network

In October last year, Rathbones purchased Cornwall-based advice network Vision Independent Financial Planning, which has recently been expanding its presence in London, Scotland, and the North.

But according to Mr Webb, the takeover of Vision was an “absolute one-off”, and he said Rathbones has “no plans for further acquisitions in the IFA space”.

He said the company snapped up the “unique” opportunity because it had been working closely with the network since its inception, and knew it needed financial stability.

Mr Webb made it clear Rathbones was not trying to create the next Intrinsic by building a network with “thousands of advisers”, adding each adviser must be looking after at least £15m of assets in order to join Vision.

“It is a very controlled growth environment.”

But he said Rathbones was in the process of expanding its internal financial planning business, which he emphasised is aimed at the existing client base, and therefore does not compete with third-party advisers.

He also said the company is looking to grow the network to 150 advisers from its current troop of 86 over the “next few years”.

Mr Webb did not rule out, however, the possibility of acquisitions of “sub-scale” wealth managers, which are heavily biased towards discretionary management and running tailored portfolios for individuals.

Rathbones is not a fan of vertical integration. Mike Webb

He also said the company had no plans to vertically integrate Vision, adding Rathbones was “not a fan” of that kind of model because it could create conflicts of interest, which he “didn’t feel comfortable with”.

“That is not to say it’s a bad model, it’s just not one we pursue,” he said.

“If you are going to create a vertically integrated model then you have to have very deep pockets in order to invest across the value chain.”

However, Mr Webb disagreed with criticism that vertically integrated models are created more for the benefit, or profit, of the parent group at the expense of the consumer.

“Vertical integration doesn’t mean the company is going to put pressure on advisers to sell the products and services of their own company,” he said, adding that would just lead to a repeat of historical issues with appointed representatives and life companies.

“The Retail Distribution Review has finally clarified the role of the adviser and if you put pressure on somebody to do something that is not in the client’s interest, then it’s unlikely that business will succeed in the long-term.”

The buyout of Vision forms part of Rathbones’ third-party distribution strategy, which started in January 2015 after the company took a “cold hard look” at its plans for developing the business, Mr Webb said.

The Rathbones’ boss said, while the company had been “reasonably successful” in the IFA market, in 2015 the group started bringing together its resources to overhaul its sales infrastructure.

He also pointed out the firm has committed about £5m to £7m to spend across a range of strategies to support growth for the whole business.

Mr Webb said the five-year plan is “evolving”, adding Rathbones now has 10 partnerships with different advice companies to provide training and education.

“The old days of product pushing are over, and the sales process is now consultative.

He added: “To be relevant to a financial adviser you need to offer a range of products and services which maps on to the way they segment their client base.”

katherine.denham@ft.com