Jade Connolly has found that responding quickly to big changes has been one of the key tenets to her role at Ascot Lloyd.
After joining the business in November 2016, Ms Connolly she was brought in to review and develop Ascot Lloyd’s advice processes and advice panels. She was tasked with implementing the same level of consistency across 11 offices, overseeing the review of each investment product and the centralisation of the research process.
But by mid 2017, the business had started to go through a massive change. Ascot Lloyd, a whole of market financial advice firm was bought by Oaktree Capital Management and merged with restricted advice firm Bellpenny.
The latter half of the year was spent re-reviewing the panel work earlier in 2017 and bringing that in line with the Bellpenny side of the business. The focus was on working with external research providers, and liaising with the compliance team within Bellpenny to upskill 40 plus advisers to work on new products they had not necessarily been advising on before. From January 2018 the combined entity launched as an independent firm with just short of 100 advisers.
One proposition, one delivery – one mission
Ms Connolly, who became strategy and acquisitions manager in January, said: “The advisers are working from one service proposition, one advice panel and one method of delivery. We have brought in additional staff, such as a training and development manager, and that was really the first sign that the business had stabilised because we are now investing again in the learning and training of advisers.”
The integration of Ascot Lloyd and Bellpenny may be complete, but the work continues as the business forges ahead with new plans. Following the Patient Capital Review at the end of 2017, which had a bearing on the future of enterprise investment schemes (EIS), Ascot Lloyd is planning to change the providers it uses.
Historically, investors who put their money in EISs got a tax break because the investments were perceived to be high risk. For example, when the government pushed for greater energy efficiency they did not want to use taxpayers’ cash to fund billions of solar investments, so solar schemes were developed. But such products that existed in a niche market became more mainstream, and investors got tax breaks for products where risk had been minimised. The government tried to introduce new restrictions, and when these did not have the desired result, the results of the Patient Capital Review led to principle-based tests.
“The problem with rules is it is easy to find a way around them, so HMRC [HM Revenue & Customs] is reviewing EIS applications based on this principles-based test,” Ms Connolly added.
“We see it as a good thing because the government could have said ‘we are going to get rid of EIS relief’, which would have been a disaster. We do not intend to deal with any provider who is trying to work around the principles-based test. In the main, we are going to go back to high-risk technology-based companies, where there is true risk to investment and it is speculative.”
Ms Connolly also stressed that advisers would only speak about EIS investments to more sophisticated investors and those with surplus cash, where losing the money would not “cause them to lose sleep at night”.
General Data Protection Regulation (GDPR) is another big driver of activities at the firm, as it makes changes to prepare for 25 May. It is also running an internal programme to help its advisers adapt to Mifid II. She said: “The age-old issues advisers are dealing with are charges and value for money. It is an emotional issue because clients perceive the value of an adviser differently to the perceived value of a solicitor or accountant.”
Developments in onshore and offshore bonds
Ascot Lloyd is also dealing with the ways onshore and offshore bonds markets are developing. In the last six months, more providers have started offering open architecture bonds that give clients more choice and the same solutions within their Isa, bond, pensions and unwrapped accounts. Previously, where firms offered onshore bonds, they mainly offered funds they ran themselves, which put off advisers from picking onshore bonds as a tax wrapper as it was more restrictive.
Ms Connolly believes this move is in response to the dividend allowance reduction because a lot of investment companies have realised they are going to have to start advising clients to move money out of unwrapped portfolios into some sort of tax-shelter environment.
Conversely, offshore bonds are going the other way. These bonds are typically used by ultra high net-worth clients, but Ms Connolly said more people are pulling out of the market largely because of the increased regulation associated with running an offshore bond. As a result of the reduced competition, this is likely to make the bonds more expensive. She added: “We never consider cost when we look at our research panels as a starting point because we know that once we have got the product with the right criteria, we will be able to discount and negotiate on price [because of our size].”
Therefore, it has certainly been a busy 18 months for Ms Connolly, but there is still much more work to be done.
Ima Jackson-Obot is a features writer at Financial Adviser
Jade Connolly's career highlights
January 2018 - Present: Strategy and acquisitions manager, Ascot Lloyd
November 2016 - December 2017: Head of advice, Ascot Lloyd
2014 - 2016: Head of paraplanning, Thomas Miller Investment
2012 - 2014: Paraplanner, Ashcourt Rowan
2010 - 2012: Researcher, Ring Associates
