View the article online at http://citywire.co.uk/wealth-manager/article/a654819
Trust and quality? The perils of using outsourcing introducers
by Annabelle Williams on Feb 07, 2013 at 12:23
Wealth managers hoping to boost assets under management through partnerships with independent financial advisers (IFAs) are increasingly targeted by third party introducers, but how many are taking them up?
Walker Crips is one firm that has only recently begun establishing relationships with IFAs. Last year, the firm launched a range of model portfolios for intermediaries and opened up its bespoke service to advisers with an overhauled fee structure.
This marked its first foray into the IFA market, but despite receiving approaches from third party firms offering introductions, chief investment officer Mark Rushton (pictured) said he would only use internal resources to build relationships with IFAs.
‘My very strong belief is that I would much prefer to have someone like Paul [Jordan, head of business development], who is imbued with all the values of the firm, being the face of the firm to all our IFA contacts directly, rather than rely on a second-hand knowledge of the firm and a second-hand allegiance,’ he said.
Question of allegiance
The concept of allegiance is ‘hugely important’ to Rushton, who says it is questionable how much trust could be put into a third party introducer.
‘If they are exclusive, why not employ them? If they are not, they are at the very least working for someone else.’
He added there are ‘issues’ about how introducers are expected to be remunerated, with fees ranging up to 20% of the client’s advice charge.
However, Rushton pointed out IFA introducers could work well for a very mature business that had a long-established record of partnering IFAs. In Walker Crips’ case, since the business has never explicitly gone out to the IFA market, Rushton prefers to have control over the ‘face’ of the business.
‘It’s absolutely vital that the face and the front of the business is someone that we totally have faith in,’ he said.
News sponsored by: