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Sanlam’s Speirs looks to follow in footsteps of SJP and Towry
by Jun Merrett on Mar 28, 2013 at 12:59
St James’s Place (SJP) and Towry may be the bêtes noires of many new model advisers, but to Nigel Speirs, chief executive of Sanlam Private Wealth, they are trailblazers.
Speirs (pictured) has ambitious growth targets for Sanlam and he views the model adopted by SJP and Towry, which combines restricted advice with in-house products, as his best means of achieving it.
Sanlam’s distribution arm has 100 advisers, including 55 who were part of English Mutual that Sanlam acquired in 2012, and £2 billion in assets under management. It is aiming to triple these figures and get 300 advisers and £6 billion in assets by 2017.
Vertically integrated structure
Speirs believes advice alone will not provide this level of growth and profitability, and is instead planning to ape the success of vertically integrated firms like Towry and SJP to get there.
‘Advice per se isn’t profitable enough, you have to have control over the total supply,’ he said. ‘We can advise, manage and administer people’s money. It was fairly clear our friends at St James’s Place and Towry were winning and getting away from the noise around it and just building great businesses. We knew we could build something that was similar.’
Where SJP has a range of mandated funds and Towry has its independent investment management service, Sanlam has a range of risk-rated model portfolios made up of Sanlam funds and a discretionary fund management service.
While Speirs is clearly a fan of the vertically integrated model, the Financial Services Authority (FSA) is less keen. In December 2012 the regulator launched a review into how vertically integrated firms calculate advice costs, amid concerns that businesses that provided both products and advice may subsidise the cost of advice with profits made in other areas.
Speirs said Sanlam was very conscious of the cross-subsidy issue but believed it was compliant.
‘We fully agree with the FSA that you should not artificially set your advice costs low, and the client must understand exactly what each part of the advice process costs,’ he said.
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