QuilterAug 11 2021

Quilter boss Feeney says focus remains on productivity

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Quilter boss Feeney says focus remains on productivity

In its half year results published today (August 11), the chief executive said the business will be focusing on adviser productivity as a means of strategically aligning Quilter with its advisers.

Speaking to FTAdviser this morning, Feeney said: “We've now put the most modern digitally advanced wealth platform into the market and we've also launched a great investment solution so it's about having the courage of our own convictions. 

“The more that we invest in our own advisers who don't want to use our products or services or platforms, the less money we have to invest in those advisers and advisory firms who do. It’s about strategic alignment, it's about Quilter aligning with its core financial advisers, and the financial advisers aligning with Quilter.”

In the results, Quilter said as part of its transformation agenda, it will continue investment to simplify end-to-end processes and strengthen controls and will be investing in efficiency and digital initiatives to improve productivity.

As part of this drive, the number of Quilter restricted advisers fell from 1,842 at the end of 2020 to 1,701 at the end of June 2021.

Earlier this year Gemma Harle, Quilter Financial Planning's managing director, told FTAdviser the number of advisers leaving the company would be dialled down during 2021 as productivity improved.

Feeney said: “We've got a very strong proposition, quality assured choice and we need to commit to it together. It's about making sure that we're all on the same journey, and if we are it's better for everybody. 

“It's better for advisers because we can invest more in their firms and invest more to support them, and also in time, whether it's practice buyouts, retirement etc. But if advisers don't want to use our investment services or our platforms but they want us to take all their advice liability onto our balance sheet - that's quite frankly not a good relationship for either of us.

“It's more now about just having the courage of our convictions, I believe we built the best proposition in the whole of the adviser market, and it's about us committing to those advisers on the journey with us and, and them committing to us.”

In the results, Quilter also said productivity for advisers has gone up from £1.5m per adviser to £2.2m in the last six months. 

Feeny added: “Our productivity is significantly improved for those advisers who have now committed to us and we have committed to. Not only productivity has gone up but overall flow is up by 30 per cent because it's possible to increase productivity by just removing unproductive advisers, but your overall flows go down, if you just do that. 

“What we see here is a big increase in productivity, and a big increase in overall flow. That's the power of the partnership of Quilter and of our own advisers.”

He caveated: “Of course, if someone wants to be an independent adviser, we will support them in the open market but if they want to be part of Quilter Financial Planning, then I believe we have generally got the best advice proposition in the market. 

“It’s one that I commit to personally and my family does, all my assets are with advisers to Quilter Financial Planning, and with our investment services on our platform.  I wouldn't ask anybody to do what I don't do myself.”

Advisers leaving

Earlier this year in March, Quilter said it expected to see some advisers leave as it focused its network around a more productive base of advisers.

At the time, Feeney said the chief executive of Quilter Financial Planning, Stephen Gazard, would be repositioning the business to drive stronger net flows.

As part of the productivity review, which includes some natural attrition, Quilter advisers were down 107 year on year in its network of around 4,000 advisers.

In today’s update, Quilter said while it reworks the advice business, it expects the rate of attrition in adviser numbers to reduce in the second half before returning to a growth path from 2022 onwards.

Feeney said: “We thought that this year probably will have some fewer advisers because we always intended to get the platform in successfully which we did and we knew there will be a small number of advisers who may choose not to join us on this next leg of our journey.

“The vast majority, 95 per cent of our advisers have absolutely chosen to join us on this now exciting part of our journey together. And there's a few that haven't. 

“But it is better that is the case for those advisers to be on their own journey elsewhere because we know it's a competitive market out there, and we all have to be aligned in pursuit of our common purpose.”

In terms of plans ahead for Quilter, Feeney said the firm’s priority over the last 12 months has not been acquisition, it has been integrating properly the acquisitions it has made. 

“It's been about helping our advisers to really exploit the potential of the new platform that we've put in and it’s been about that as opposed to just acquiring more firms. 

“In time, I'm sure we'll do some more [acquisitions] but right now the priority is organic growth and delivering great outcomes for advisers and their clients. That's our total focus and we're seeing that in our results in the first half of the year we're seeing how that is really paying dividends.”

Platform migration

In February 2021, Quilter completed its platform migration, after quite a few delays.

During 2020, Quilter migrated some £50bn of UK platform assets to its new technology. 

Speaking about the migration, Feeney said the firm is now four or five months in and has seen increased flow and usage of the new platform, such as new services. 

“We've got 10 per cent of all advisers now using the junior ISA which means that all our family assets are being linked,” he said. “40 per cent of our clients are using our family linking service and there has been massive growth in our new discretionary management hub on the platform that we couldn't do on the old platform, that's driving a lot of a lot of value for clients and advisers. 

“We're really pleased and we're seeing a big pickup, not just in flows from our own advisers Quilter Financial Planning, we've seen a 30 per cent increase in net flow from our own advisers, and a 60 per cent increase in net flows from the IFA market using our platform.

“We lost a little bit of market share over the last couple of years in the IFA market as we were getting our new platform in but it's coming back very strongly which we're very pleased to see.”

Feeney concluded that the firm has two goals moving forward which are growth and efficiency. 

He said: “We've built a great company that is in the shape that we wanted. A lot of our strategic M&A and all that is behind us."

sonia.rach@ft.com

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