Yesterday I published an article about my fears of putting my money into the hands of a wealth manager. They can be summed up as
- Financial – the “money” bit of value for money , was skewed against me
- Succession – I didn’t understand whether I was buying a process or a person
- Confusion – I had no way of assessing the value aspect of the VFM equation and couldn’t work out if I was buying advice or asset management.
As luck would have it, City wire published a story -http://tinyurl.com/za63ujh – on the purchase of 4 small wealth manager by a combine harvester of a wealth manager – called Succession.
here’s the headline
Succession buys four IFAs to boost assets by £350m
here’s how the story starts
Succession has bought four advice firms to boost its assets under advice to £350 million
The eagle eyed will have noticed a change in prepositions; “by” doesn’t equal “to”. Nor does the quoted “through due diligence” equate to “thorough due diligence”, we’d expect on such a deal. The story was clearly run in a hurry.
What really struck me about the story/press release was the emphasis on funds under management. This was about IFAs managing other people’s money but those other people didn’t get much of a look in.
That is till we get to the comments of Succession’s CEO
‘As consumer demand for quality advice increases, so too do regulatory and commercial pressures, and advice firms face almost insurmountable challenges to provide affordable and accessible financial planning services to clients,’
I had no idea what Succession bought to the party (that the IFA firms didn’t) and having spent time on the client facing and adviser facing websites, I still don’t.
Does this deal mean cheaper fees for clients?
Are clients able to buy financial planning services independently of wealth management?
Was the customer buying into Succession or as firm and succession as a benefit?
It would appear that some IFAs looking at this deal were dubious.
The poor clients of these 4 IFA firms (for crying out loud)
Can Succession publish their client fee tariff ? (Nick Young)
Are those charges verifiable? They verge on the obscene and make the likes of Towry/SJP look cheap. (Investment guru)
Well might these chaps query what was going on; I was pleased to see that the CEO of Succession (Simon Chamberlain) decided to answer these questions and comments himself.
Of course they are not ! You don’t think bloggers/trolls of this kind use facts ! Succession like most other companies in the uk , charge 3% for a new fully engaged client to come on as a client then an annual 1% fee for the full wealth management and rebalancing service for their individual plans linked to a personalised Cashflow forecast and a individual life plan . All these fees are in a sliding scale based on the amounts being invested . No secret charges no excessive exit charges , completely transparent and simple to understand
Well I side with the bloggers/trolls on this one Simon. If your fees are transparent, why don’t you publish them; if you have exit charges – show why they’re not excessive and if your stated fees are simple to understand, why don’t I understand them?
While I can’t see the Succession charges for financial planning/wealth management, I can see the costs for arranging a mortgage with succession
The above fees are payable on completion of a mortgage. We will also be paid commission from the lender. For example , if you borrow £600,000 our success fee will be £3,250.
This is not transparent and easy to understand, unless I am wrong, the undisclosed commission (which will vary from lender to lender) is paid on top of the formulaic success fee.
I side with the bloggers/trolls, because I don’t think they are hiding under the bridge (as one of Chamberlain’s fans has it). I think they are openly questioning whether these deals have anything to do with customer value.
Judging by Simon Chamberlain’s defensive response, I suspect that this is a valid line of questioning.
The conclusions I came to when researching my own situation is that IFAs can confuse with their language, their fees and their intent. Generally I found that a good way to find what was meant was to turn round what was said to the exact opposite. The assertions in the press release from Succession and the comments made by its CEO and others are not verifiable from Succession’s websites.
Can Succession succeed?
Succession is what is known as a consolidator. Citywire has sent me an insightful article on the model with specific attention paid to Succession and a previous business run by its CEO – Thinc Destini. You can read it here http://tinyurl.com/jpzd2ce
I suspect in the short-term, Succession will succeed. But to do so in the long term it is going to have to be a lot clearer about its intent and its means of fulfilling its promises.
Can IFAs convince me that I will have a succession of good advisers over time? Only if I can properly understand the process that drives the advice, the cost of advice and the cost of asset management.
When firms like Succession can do that, then we may have success!