Evelyn Partners: We’ve turned away firms giving poor quality advice

But the firm’s strategic partnerships head told FTAdviser he has not been happy with the quality of advice some prospective firms have been giving and the lack of interest they have for client outcomes.

Somebody that doesn't seem to be particularly interested in the client outcome - that's always a bit of a warning sign.Richard Dawes, Evelyn Partners

While he said he has come across lots of good financial planning businesses, his firm is wary of those with not-so-clean track records.

“We've sometimes had a look at a business and not felt particularly happy with the quality of the advice that's been given,” Dawes explained.

“Or we see somebody that doesn't seem to be particularly interested in the client outcome - that's always a bit of a warning sign.”

Some firms have had to pay out millions in compensation for bad advice given by firms before they acquired them. 

Quilter has had to pay out £18mn so far for claims against Lighthouse, a firm it bought in June 2019 which advised on the British Steel Pension Scheme.

Meanwhile, Aviva faces a £3.5mn professional negligence claim relating to Friends Provident, a life business the provider purchased back in 2015.

Dawes said the quality of advice given is an area his firm spends a fair bit of time on.

“It's just about making sure that we're thorough in the processes that we go through in terms of due diligence,” he explained.

“Generally we are good at making sure the advice that we give is good. We're good at making sure that everything we do is as good as you'll get in the marketplace.

“So it's an extension of the same standards that we would look at internally to the businesses that we are looking to get involved in with a purchase.”

Evelyn likes prospective IFAs which are very focused on what a client's journey feels like, and what’s going to happen to the client.

We might look at some very small clients where the financial planning individual is providing a face-to-face service, and where it might be difficult from an economics perspective for us to do that.Richard Dawes, Evelyn Partners

In July, Evelyn bought the client books of Glasgow-based adviser, Callan Anderson, who had grown his business over 18 years.

The way the scheme works is the adviser joins one of Evelyn’s offices to oversee the re-homing of their clients. The firm also tries to mirror what the adviser was providing, so does not look to move assets to a different platform, according to Dawes.

Evelyn also recently bought Capital Risk Management and MP2 Financial in Scotland. These deals added 10 joiners to the business under the succession scheme.

Dawes said as well as coming across some “not quite so good firms”, Evelyn also has to make sure it only onboards good quality clients.

By that, he said he meant clients need to fall neatly within the buckets of services the firm offers. 

Asked what a ‘bad quality client’ is, Dawes said: “We might, for example, be looking at some very small clients where the financial planning individual is providing a face-to-face service, and where sometimes it might be difficult from an economics perspective for us to do that.

“We might give them a telephone service or an online proposition and they may be uncomfortable with that because the client has been used to having a face-to-face service.”

Evelyn is starting to see more small financial planning businesses approach retirement and come on the market. 

The firm has a pipeline of deals, according to Dawes, but it is more concerned with finding the right businesses than setting arbitrary targets. 

Asked how he thought the scheme had performed so far, he said it had been “broadly in line with what we hoped”.

ruby.hinchliffe@ft.com