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Succession gains FSA approval for vertically integrated status
by Jun Merrett on Jan 02, 2013 at 13:43
IFA consolidator Succession Advisory Services has joined the likes of St James’s Place (SJP) having been approved as a vertically integrated firm by the Financial Services Authority (FSA).
Vertically integrated firms act as both a provider and distributor.
Unlike SJP Succession does not have its own funds, but chief executive Simon Chamberlain said it had recently taken ownership its platform, which was powered by Investment Funds Direct Limited (IFDL), the parent company of wrap Ascentric.
Also unlike tied network SJP, Succession is independent.
Chamberlain said the firm bought the platform from IFDL and transferred the ownership of the client relationship and assets from IFDL to Succession, a move which was rubber stamped this month.
'Previously Succession was the white labelled distributor of the IFDL platform and IFDL, who owned the platform paid us in basis points for funds put on the platform. Now we own the client relationship and the platform and so we pay IFDL to provide the technology services for the platform,' he said.
Chamberlain (pictured) said platform ownership and ensuing vertically integrated status would increase the firm’s capital value.
'Anyone who uses a platform [that they do not own] is continually giving away their capital value from the funds under management,' he said. 'The reason fund management businesses are worth £50 billion and advisory groups are worth under £50 million is because they [advisory businesses] don't own anything. So a major advantage is that we get that capital value.'
'Never again will the capital value of owning the client relationship be passed on to fund management groups or platform providers, but instead be owned by the advisory business in true partnership with clients.'
Chamberlain added that Succession was expected to report a £2 million profit for 2012.
As a result of the platform ownership Succession has seen its capital adequacy requirements increase from £10,000 to £469,000.
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by Jun Merrett on Jul 22, 2014 at 14:38