It is “absolutely bonkers” for SME advice businesses to try and offer additional products or services, Unique Financial Planning managing director Philip Martin has insisted.
He described the phenomenon as a solution which is “scrambling around for a problem”.
“To do manufacturing properly, you have to be a scale business,” he said, during a panel discussion at the Lang Cat’s Home Truths event today (9 February).
He said that, for a large business, it could make perfect economic sense.
But for Unique – a medium-sized business – Martin said there are much better ways cash could be spent to create a good return.
For example, hiring and training a new adviser, or investing in improved back-office systems.
Unique Financial Planning has around 30 advisers and the bulk of its client assets sit on two platforms. It is one of Openwork Partnerships largest firms.
Also on the panel, Anna Pollins – Fairstone’s managing director of partnerships – said offering additional services can help advisers with their capacity.
In August last year, Fairstone partnered with FNZ to launch its own platform.
The business has around 400 advisers service 90,000 clients. It also has around £13bn client assets on different retail platforms.
She said the new platform – called Mineral – will be a simple, low-cost, remote service available to clients with less complex needs.
The idea is to free up capacity for the firm’s advisers, to allow them to serve more clients with complicated needs.
Thank goodness for Consumer Duty rules from the FCA