In this podcast, Simon Chamberlain, Chief Executive of Succession Group talks to Abraham Okusanya about how his earlier training in the industry prepared him for the current challenge of running a business that now looks after £8 billion of clients’ money.
Simon talks about how his approach in the consolidation space is different from the competition, vertically integrated models in general and the misconception over FCA definition of independent advice.
Mistakes and Learning Curve
I asked simon what he would consider the biggest challenge of his career, one that might even be considered a failure. Simon was keen to stress that he sees a mistake as part of the learning curve, rather than a failure. He talked about what went wrong at Thinc Group, where the model was to buy IFA businesses, hand over cash to principals of these businesses and hope that these businesses will then be consolidated into the Thinc, which clearly didn’t really happen. Simon stressed that Succession’s model is very different – the consolidation work happens first and this is then followed by the acquisition of the IFA practices.
Platforms & Definition of ‘Independence’
Succession currently has £2 billion on its own platform and I asked Simon how a vertically integrated model like Succession could possibly meet the FCA’s definition of independence. Simon points out that a platform is simply an administrative systems and questions the idea that using multiple platforms makes a firm independent. He likens platforms to back office systems… ‘I put 100% of my clients on Avelo/Iress…. does that mean I’m not independent?‘ He also has an interesting view on client ownership – ‘when an IFA puts client’s money on a platform, the client becomes a client of the platform and not the adviser.‘
Valuing and Acquiring IFA Business
Simon also talks about what Succession looks for in a prospective firm it acquires, how the business is valued and how the deal is structured in terms of payments to the IFA (cash and equity). We talked about some misconception around why Succession sold more stake in the business to the private equity firm Inflexion and Simon’s gripe with compliance firms.
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